How to pick a finance advisor?

[bkuhr]

Got a question for a finance/tax advisor about early pension. What should I look for when choosing one? Most in book look to be affiliated with stock companies (Merrill Lynch, Ameriprise,...). Not interested in being advised on what stocks to buy. Good advisor will likely get my personal tax return business.

 

Anyone here like to try my question, my email in profile.

[Midrsv]

Brian,

 

I retired last fall and have been hounded by what seems like every financial advisor in town wanting my business. Of course they all want 1 to 2 percent for their efforts. My company had our 401K with Fidelity. I chose to leave everything with them. I sat down with their rep (fee free) a couple of times and worked out a self managed plan using their online tools. They have a nice retirement income planner online that I think is very good. Based on your risk tolerance it helps you invest in various investments to meet your goal. I know the market is up right now and I've done very well over the past 6 months. I just can't see giving an advisor the first 1 or 2 percent doing something I can do myself. Since 9/1/12 I am up a 9%. I doubt an advisor would do much better.

 

Good Luck.

Dennis

[bongobobny]

Hmmmm, "good" and "financial adviser" in the same sentence...

[Barrycuda]

Hmmmm, "good" and "financial adviser" in the same sentence...

 

Don't forget FREE....

[MiCarl]

I was once offered a position as a Financial Advisor with one of the big firms (don't remember which one any more). The way I would get paid is with 1% of my client accounts.

 

I looked at the performance of their options and the best ones were tax efficient index type funds, no surprise there. I asked why anyone in his right mind would give me 1% of his assets every year when he could buy the same investment from a discount broker. Their answer wasn't very satisfactory so I moved on to other things.

 

IMO, if you want help, you should go to someone who bills by the hour and not someone that skims a percentage or gets commissions for selling you stuff. A good one should spend more time asking questions and listening than talking. I'd be very cautious of any form of annuity.

 

Unfortunately there aren't any options for a decent return today without taking on some risk. Stocks have been good, and will continue to be good until they aren't. When they go bad they could go very bad very fast.

 

A financial adviser and a tax preparer aren't the same thing. Take each problem to the appropriate specialist. If you're trying to figure out how to structure some form of payout you should probably be talking to a tax accountant.

[ragtop69gs]

One thing to consider is if you start drawing a pension before age 59 1/2 there is a 10% federal penalty tax. I started drawing my pension at 54.2 years age and 32 years on the job. I have to pay the 10% penalty tax till age 59.5 I hate giving the feds that extra $$

[Daveand Barbie]

Jay,

 

You could have avoided the 10% penalty by using the 72t distribution option. It requires you to take equal payments for either 5 years or until you reach 59.5 whichever comes later. It may still be an option you could elect if you haven't reached 59.5.

[bongobobny]

Also, never pick a friend to be your financial adviser...

[Wrench]

Just sent you an e-mail.

[bkuhr]

Just sent you an e-mail.

Thanks you Richard, just what I was looking for.