- November 18, 2023
- Posted by: legaleseblogger
- Category: Related News
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Understanding Fiduciary Practices in Wealth Management and Retirement Planning
I have made it a priority to attend a series of wealth management and retirement seminars, all of which emphasized the importance of fiduciary practices over commission-based approaches. These seminars have been valuable in providing me with insight into how to best manage my finances leading up to retirement. As someone with a modest income, I have worked hard to ensure that my annual earnings amount to around $95,000, and my wife, who is currently in her 60s, has also contributed significantly to our combined income.
In terms of our savings, we have been diligent in building a nest egg that currently stands at approximately $150,000. This portfolio includes various small ETFs, stocks, and a 401k of a similar value. Additionally, we have both been fortunate enough to have pensions that are estimated to provide an average monthly income of $2,500 to $3,500 for me and $1,500 to $2,400 for my wife, depending on when we choose to retire.
Despite the guidance and information provided at these seminars, I have noticed that the companies hosting these events have not actively pursued us as potential clients. This has led me to wonder whether our lack of substantial wealth plays a role in their reluctance to engage with us, or if they simply see limited profit potential in our accounts. I am eager to gain clarity on their mindset and understand their reasoning behind not actively seeking to work with us.
Furthermore, while these companies have refrained from pursuing us as clients, they have given us valuable advice on managing our finances and making sound investments. This guidance has included suggestions for diversifying our cash holdings and exploring other investment opportunities, such as real estate. Additionally, I can say that we are currently debt-free, with the value of our house increasing significantly since we purchased it three years ago.
In light of these circumstances, I am intrigued by the possibility of using AI Legalese Decoder to help me gain further insight into the legal and financial implications of our situation. By utilizing this advanced technology, I can analyze complex legal and financial documents related to our retirement planning and wealth management. This will enable me to make informed decisions and potentially uncover new opportunities for improving our financial standing. With the assistance of AI Legalese Decoder, I can navigate the nuances of fiduciary practices and commission-based approaches, ultimately empowering me to advocate for our best interests in the realm of wealth management and retirement planning.
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Your suspicion is likely correct. They donÔÇÖt think they will make enough money from managing your portfolio to make it worth their time. It costs them nothing to provide the general guidance your described – because all of that information is available for free on the internet.
YouÔÇÖre throwing money away on the seminars. What are you hoping to learn at this point? You obviously know about 401kÔÇÖs, IRAÔÇÖs, HYSA, social security, home equity and budgeting. Real estate investing is a terrible idea for someone at your age and financial situation due to the risk profile, which you likely already figured out. Put your seminar fees in an ETF and find a new hobby.
Not enough wealth. I wouldnÔÇÖt even go to an FA until $1M+ NW.
A significant amount of firms require the FA to manage accounts 250k+ for them to be paid for the new business. If the accounts are under 250k only the business makes money which is why the FAÔÇÖs likely seem to not want to take you on. There are absolutely businesses out there willing to work with you but they will be companies like JPM, Fidelity, Schwab, etc. they absolutely have the planning resources and CFPs available for you to properly plan for your current level of wealth.
Hello, sorry you are having a hard time.
You might find luck with a flat fee type of arrangement.
Resources- Look into the garrett planning network, xy planning network , napfa .
If you want to entertain diy there are some online solutions such as newretirement, maxifi planner
Have a good day!
Not clear on what services you’re looking for. If you want an advisor to manage your investments, they generally want $100-250k available for them to manage. They’d consider anything less than that to be more trouble than it’s worth. And frankly, you sound smart enough to manage your own investments.
A fee-based advisor would review your particulars with you and offer guidance. This is generally the way to go:
[https://www.napfa.org](https://www.napfa.org)
It sounds as though you have everything more-or-less under control, though. Good luck.
Most advisors I know have a minimum of at least $250k, but more commonly $500k.
I mean stay away from seminars first and foremost.
Then shop around your area for a CFP or RIA and see what their asset minimum is.
Or look at one of the big brokerages (vanguard, fidelity) and look at their advisory services
1. What are you hoping to get out of these advisors that you do not already have/know? You seem to be pretty dialed in on finances, such that there’s really not much value add that they can provide.
2. The fact that they *aren’t* willing to take you on as a client is actually a point in their favor. They could easily sign you and earn a 1% AUM fee for doing basically nothing, but they’re not.
3. There are financial advisors that charge on an hourly basis – Garrett Planning Network is a good place to begin a search – but, again, given what you’ve described, they really won’t be adding much you don’t already know. I hired a Garrett planner for a check-in a couple years ago, and it was well worth the $2k I spent, but she flat out told me at the end that I really didn’t need much ongoing advice, and didn’t recommend further check-ins until I faced a major lifestyle change (such as early retirement, receiving an inheritance, etc.).
There are advisors that you can hire under an annual retainer. They might be fee only, charge a fee for assets they manage, or even be fee based with some commission based offerings (life insurance, long term care, disability policies and the like).
Search http://www.letsmakeaplan.org to search CFPÔÇÖs in your area. Visit with 3. Then decide if planning is right for you.
I work as an FA. I can offer insight into my limits and easy ways to get around them. For managed assets, an advisor takes on a fiduciary responsibility which has strict expectations per SEC and FINRA.
The annual review is the easy part, but the requirement to be available for ongoing planning throughout the year can become burdensome. If you have 250k, and youÔÇÖre paying 1%, the total fee is only $2,500 for an entire year.
Consider that an FA doesnÔÇÖt actually get the full 1% because of business overhead and IA/BD splits, and a 250k client might actually bring in ~1500/year in actual income.
Then we consider the ÔÇ£risksÔÇØ of being a fiduciary, which include opening yourself to complaints and ÔÇ£errors and omissionsÔÇØ, which could happen entirely on accident. Because low balance clients produce less revenue, itÔÇÖs simply not good business to give them the same attention as a HNW client.
The workaround typically is, buy class A mutual funds once per year from an advisor. Because they get paid 3-5% all at once, it helps their cash flow, and they will meet with you once per year to review your financial situation. In the long run, itÔÇÖs substantially cheaper to pay 3-5% once, and .25% annually, compared with 1% indefinitely.