I have some questions about using financial advisors and some of the etiquette involved.
I'm a young-ish, married professional. I started investing with a financial advisor about a decade ago when I wanted to start saving for retirement. I found an advisor online and started with less than $5k invested with him. He took over an hour to talk me through investment options and strategies. He made me feel at ease with investing for the first time. From what I've heard, that's unusual for someone to take so much time to help someone when so little is invested. Now, we talk every other year (if that). My money has grown competitively with the market (my retirement portion which is a bit more aggressive has significantly outperformed the market). And if I ever have questions he is quick to address them. I don't have a ton invested with him so his fees from what I have invested are small and not necessarily worth his time. I like the guy and he was helpful when I was in my early 20s and had no idea what I was doing. I don't feel like I owe him anything but I also don't necessarily feel right moving my money away from him. I currently have about 30k invested with him over a few accounts and as of recently am contributing money into those accounts again (took a short break while in grad school).
My wife has money invested with a different financial advisor. A family friend of her father's who manages her father's estate and took her on as a client because of their family relationship. He typically only takes clients with greater than some large amount invested but works with my wife because of the family relationship. She has close to nothing invested with the guy but lately has been talking about possibly moving more of our scattered accounts to him so he can manage our money (this is important to her dad). He's also local to us which I can see being a plus. She only has about 2k invested with him.
My wife and I also both have individual brokerage accounts with various investments from workplace retirement accounts to random stocks and mutual funds. The workplace stuff can't be moved so holding onto these makes sense; plus the fees are close to $0.
Now recently my grandparents also approached me and let me know that because of financial success, old age, and tax benefits, they are going to start giving out inheritance money early to kids and grandkids and told me they want me to start working with their financial advisor. They plan to start annual distributions based on market performance for the year. Their financial advisor typically only has clients with seven-figures invested but has agreed to take on all the family members. This will make it easy for them to easily move money from my grandparent's accounts to ours. At least while they are still alive, I feel like I need to keep my money with their guy because it just makes sense logistically. Most of the rest of that family has moved all of their money to the financial advising group (my parents included) and have encouraged me to do the same for long-term investments.
The problem is now I just feel like I have money spread all over the place and I'm not sure if that's the best way to be doing things or if I should just combine all of my accounts so that one single group/person can give financial and investment advice.
So my questions are:
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Are financial advisors necessary? The advice seems helpful but the fees also are high. Is there an amount of money at which they become "worth it." Should you invest all of your money with them or only some of it? Are there advisors you should watch out for or obvious red flags?
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What is the though on having multiple financial advisors? Is that frowned upon? Can it cause problems? How many is too many?
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How do you pick a financial advisor? The one you've been with for a decade? The ones that your family recommends? All three I'm interested in are CFPs so at least in credentials they seem the same. Does it matter that some only manage extremely wealthy clients? Is that a pro or a con if my net worth is a fraction of what they typically advise?
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If it's time to break up with a financial advisor, how do you terminate that relationship if you need to do so?
Submitted October 12, 2024 at 01:58AM by Hereformyhobbies https://ift.tt/UgjkJnr
