financial planning, retirement

[jerseygirl13]

Question for others who are experienced with financial planning: Is it reasonable to pay one time fee of $500 to Ameriprise rep. to help me set up strategies for retirement investing? She will do that plus roll over a few things into a Roth IRA. Says I'll never have to pay the fee again, unless . . . I change course drastically. Is it standard procedure to pay this kind of fee?

Have been enjoying Lake Sumter Web Cam, all the threads and valuable info. Still working full-time and plan to be able to come to TV in a year or two (still work f/t). Wondering if buying a house now, and renting it out would be smart. Just don't know where the market will be in two years.

Please keep all this good info coming. I check TOTV daily, sometimes twice/day.

[iaudit]

Tough question to answer without knowing the size of the assets to be managed ( I'm not asking to know as it is none of my business). I looked at Ameriprise's website and they don't have any investment products of their own, rather they have you invest in other financial institution's products. As they indicate on their website, they may be reimbursed by these financial institution's for having someone like you purchase their products, primarily mutual funds.

I did notice that they have no relationship with the Vanguard Group, which I use and have been known in the business to have some of the lowest management fees on their mutual funds.

I would advise you to read some articles on investing by searching the internet or looking at financial type magazines in the library (Money, Kiplinger's, SmartMoney, etc.). They usually offer some pretty sound advice on what to do with your money based on your age, lifestyle, assets, liabilities, risk tolerance, etc. They also usually have some advice on certain mutual funds. A lot of them used to have yearly comparisons of different funds, showing their returns, fees, etc. over certain periods of time.

Unless you have significant assets to be managed, I would not pay $500 to have someone pick a mutual fund for me. It is very easy to set up your own accounts, research past performance (which is not necessarily indicative of future performance) and pick your own mutual fund. Every type of investment has some degree of risk, it is just a matter of how much risk you are willing to take. Good Luck.

[rdkent]

jerseygirl - you might want to take a look at today's Wall Street Journal. There is a large article in the Personal Journal section about Ameriprise. The are being charged by some states" AGs with fraud for failing to provide what they are promising.

[DickY]

If you want to bring yourself up to speed on investing a good source is morningstar.com. You can register for free and they have free investing classroom that will give you the basics on investing. They also have for fee workshops for those who are more serious. All in all it is a good source of information.l

[mike1946]

I use John Romano from Securities America ...has a place next to the drivers licence office south of the villages ..used my money to invest in mutuals cd's energy bonds etc. etc. ..pretty good return averaging around 6% with a low risk factor ...and never cost me a penny !!

p.s. Also bought Church bonds - recommended by a friend !! ..getting between 7.5 - 9 % simple ..pretty good returns ..my friend has had nothing go bad in 10 years ...mine are proving to be pretty good.

[SteveFromNY]

I've used Ameriprise for around 13 years now.
They are probably not the best bargain in the financial planning circles, and if I wanted to manage the assets myself I could pay less money by paying more attention.
My logic has always been that having these folks watch my money was probably better than watching it myself. My assets have grown, and I will be retiring soon (if my house ever sells) per the plan developed by my Ameriprise rep 13 years ago (at the time they were called IDS, then American Express Financial Advisors and now Ameriprise).
One benefit of using them is the American Express Platinum card, which, if your assets are large enough, you will get for free. One benefit I use alot: when you fly Continental (and others) you can use the President's Club at different airports instead of waiting in the regular terminal.
Another thing they involved me in is a S.E.P.P. (I think it means Substantially Equal Payment Paln) which is a way to draw on my 401K assets before I am 59 1/2 (I am 54 now) without paying a penalty. This enabled me to afford buying my home in TV in 2005, and will allow me to retire next year.
I would definitely recommend them, they have really helped me.
And I have paid them to do this exhaustive analysis in '94 and again recently to validate my plans. It's been money well spent.

[jjdees]

I use Ameriprise but I chose the rep, not the company. Early in the relationship, I paid $500 for a comprehensive financial plan, not for the management fees. So far, I'm very pleased with the performance.

[Villages Kahuna]

It seems to me that if you are a brand new customer, that Ameriprise's $500 fee is reasonable. I'd be a lot more sensitive to the ongoing fees a financial advisor would charge to manage your money.

Making a long story short, I went from totally managing my own portfolio to having my Merrill Lynch advisor do it for me. He does it for about 70 basis points a year on the assets that he manages for me. That's more than index funds, but a lot less than most mutual funds.

Another suggestion is to establish some performance benchmarks with the financial advisor up front. That way he will know that you intend to compare his performance to the benchmarks you set ahead of time. That also permits you to know whether to "fire" the advisor if he performs badly to your performance benchmarks. After all, he's working for you--would you permit any employee in a business you own continue to work without a periodic performance review? I would also tell whoever you choose that you expect to have a performance review of his work with your money at least once a year, maybe every six months.

In my case, I initially set an average (weighted to the allocation of my own portfolio) of a couple of common indexes (the Russell 1000, the Lipper total bond market index, etc.) as a benchmark. Now I've proceeded to using the average of about a half-dozen top performing, balanced mutual funds as our benchmark. My logic is that, in effect my advisor is doing the same thing with my money as a mutual fund manager does with the investments of a whole bunch of people. My Merrill Lynch guy, I call him my guru, has beaten my benchmarks every year since we began doing it that way--in some years (like this year) by a lot.

[jerseygirl13]

Thanks everybody. I so knew I would get some great feedback. I am learning as I go. I do have a 401A (work for medical org.) and 403b. I know I need to get more aggressive with those two. I don't have a large amt. of money here but it's all I've got and I figure I need to get educated, and then, "on the stick", as they say. Also have a small sum I'd like to roll over into a Roth IRA; just trying to determine who to give it to at this point.

Again, thanks for all the good advise. SteveFromNY, thanks for sharing your experience with Ameriprise. I also have a few contacts to make, one is Vanguard, the other T.Rowe Price. Dicky: Just learning about Morningstar. Thanks for reinforcing that piece.

VillageKahuna: Thanks, your posts are always so informative. I was hoping you would pass some wisdom my way.

Regards, A TV Wannabe, Willabe someday.

[efrahin]

You should never have to pay a fee to a financial advisor for a roll-over, they get a commission and it is paid by the company the roll-0ver goes to.
On the same subject, I have been searching among the clubs in TV and I have not seen a Financial Club or Money Club where these items could be discussed. Did I missed it or shall we start one??? I think this issue is important for little old poor people like us.

[jerseygirl13]

efrahin: A Club for financial learning would be great. Can;t believe there isn't one in TV yet. Isn't it something, as a friend told me, that we spend months researching the new car we want, what kind of dog we want, we even research and get educated before we buy a vacuum cleaner, but we (some of us) procrastinate and fence sit about who takes care of OUR SAVINGS and don't like to take the time to do our homework. I'm talking mostly about me here, but can anybody relate? Better late than never, I figure. Thanks for the great idea for a new club, if there isn't already one. I will certainly join once I get to TV. Of note, I'm 54 and can't wait to get there and kick up my heals (saw the thread about age groups at TV).

[SteveFromNY]

Jerseygirl - we went to a seminar 14 years ago geared toward saving for our child's education. The previous nights we spent planning our summer vacation. The financial advisor made the point at the meeting that "people spend more time planning their annual vacation than planning for their financial future". It really struck home with us, and we signed up shortly thereafter. Again, it was with Ameriprise, and they eventually charged us for this in-depth analysis of our financial status, means and goals, and developed a plan that we have been following for all these years. Their fee was not the typical management fee, but one for their analysis program. They do have varying "loads" on the funds they carry which are the typical management fees.
Frankly, I feel pretty strongly that whoever showed up at that seminar that night would have helped me - it is not a skill unique to Ameriprise. As long as they are reputable and experienced. I never regretted pulling the trigger on this, and I doubt you will either, who ever you use.

[gfmucci]

Ameriprise Financial will charge any way you want them to: Fee only plans, managment fee, product commission, etc. They were very up-front with me. I have never seen so many disclosure forms. My Ameriprise advisor (3 months now) invites me to challenge him and dialogue. That's the way he and I like it. He and I e-mail often. He is very responsive to questions.

$500 I think is their minimum plan fee and seems like a good value to me. I welcome the advice of someone who I know knows a lot more about this stuff than I do. I have been doing things in the past "intuitively" but discovered I 've been doing things entirely backward from what the professionals advise...and I am gradually learning the reasons for what they do, and it is beginning to make more sense to me.

[Avista]

We have not had good results from Ameriprise or IDS as it was known then. We were with them for a number of years. Evenually, we moved everything to Fidelity. Got tired of Ameriprise A funds and B funds etc. Fidelity and many other good financial services are no load. Now we will not purchase anything with a load. We are very satisfied with Fidelity and Vanguard--which we use.

[gfmucci]

You can purchase load or no load funds with most of these firms, Ameriprise included.

[travelstiles]

There are several ways to work with financial institutions, as well as fee/commission arrangements, depending on how involved you want to get (no such thing as one size fits all!).
I am a Certified Financial Planner (not looking for work!) who's worked for a major financial services firm and just retired. I've transferred my NY membership in the Financial Planning Association to the Florida region and will be very active with them when we move to TV on 12/28. I've also provided financial planning seminars on the entire east coast, so love financial education and sharing what I have learned. I'd love to help start a financial club when we get to TV.
I will go through my files and post some informational links for everyone to access (none affiliated with any company, all educational). As I am on my way out for the rest of today, I'll post a full page by tomorrow afternoon, but for now begin with this one, which is the best (you'll know this if you've read Jonathan Clements columns in the Wall St. Journal:

http://www.cfp.net/


stay tuned for more... :bigthumbsup:

[TV MAN]

Had a meeting with Ameriprise about a month ago. They wanted $900. I was under the impression from the reps that this was a YEARLY Fee :yikes:.

Said no thanks for now. I have other ave's to check out.

[golfnut]

Travelstiles, what do you think of Fidelity???

[travelstiles]

:bigthumbsup:
Among the best online resources for research, retirement planning, etc.* If you like to manage your own investments, it's great.
For those who have substantial investable assets of >$1MM they also have a network of personal financial advisors.
Retirement and Estate planning tools online are very good as well -
http://personal.fidelity.com/planning/guidance_overview.shtml.cvsr?bar=c

[golfnut]

thanks, I've been using them for years and have been satisfied, good to hear they are OK.

[travelstiles]

Let's get that investment club started in '08 and share info with each other on what we have found works well. Nothing is better than a referral from a satisfied client!

[Avista]

We've been very pleased with Fidelity. Would be interest in that Investment club. (Not a club to buy stocks, but rather a club to help me learn.) Count me in!

[TV MAN]

Although I am not yet in TV full time I have the same interest as Avista. So keep me in mind as well.

[drdodge]

you should not hsve to pay for somebody to invest your money. All of the top finsncial plenners do not chsrge. I have used 2 one up north one one here in Florida no charge

drd

[stjade]

:welcome: WE HAVE ALSO USED A FINANCIAL ADVISOR UP NORTH FOR YEARS-THERE IS ALWAYS SOME SORT OF FEE TAKEN SOMEWHERE---will be closing on our house in piedmont in feb-and moving full time to TV in sept-we would be very interested in a financial club--steve and jane >:(

[travelstiles]

Steve and Jane are correct. There are no free lunches unless you are completely self-directed and buy no-load funds, etc.
There are numerous ways to hire a qualified professional advisor. Qualified, which usually means licensed, a member of a professional association, etc. You also need to check their records to be sure there have been no disciplinary actions taken against them (see links below).
As far as fees or commissions, some advisors are paid a one-time flat fee for a comprehensive plan, some assess an annual fee, some work on a percentage of assets under management, some work on straight commission from the investments they place your assets in.
As I have posted earlier, there are several websites to research, but the best in my opinion is: http://www.cfp.net/ Click on the learn about financial planning tab for more information. Other good sources are Jonathan Clements, a contributor to the Wall St. Journal at: http://www.jonathanclements.com/ladviser.html and a new website: http://www.dolans.com/. They also have a syndicated radio show that I listen to religiously.

[Avista]

I love to listen to The Dolan's. I download their podcasts and listen at my leisure.

[zcaveman]

There are many free financial checks in TV with a free lunch. If you are not in TV then I would suggest that you look around at the financial institutions that give a free review. I got a free one from American Express. After you decide, see what the penalty period is to remove your money. At AMX it was 9 years before I could get 100% of my money out with out a penalty.

If I could do it again, I would have stayed where I was.

[travelstiles]

zcaveman,
Not sure what you mean by "There are many free financial checks in TV with a free lunch."
Many institutions are willing to provide "free" introductory seminars (often with refreshments, if that's what you meant by a free lunch) or "free" initial consultations, but as you mentioned there has to be some type of pay for professional services.
I like to make an analogy to surgery - would you hire a surgeon to operate on you who works for "free?" I doubt it. But many people are penny wise and pound foolish when it comes to their investments. We've all worked long and hard for our money, so we need to do our "due diligence" when working with advisors.
As with everything else in life you get what you pay for. If you are willing to put in the time to do all of your own research, follow the market closely, read the WSJ and invest on your own, you can save a significant amount of money, but the average client doesn't have the time, resources or interest in doing this.

[SeaCruiser]

Several years ago I started making it a point to learning basic retirement investment on my own. After all, it is my money, I earned it so I should take responsibility as to where it is invested. I did so by listening to shows like Bob Brinker (Money Talk), CNBC and more recently Adam Bold (The Mutual Fund Show) I use a blend of many of these resources. I liked the common sense premise of using no load mutual funds analyzing their performance and managing my portfolio myself. There are many things to keep in mind like assett allocation appropriate to your age. These days I have a laddered CDs included in the fixed income catagory (I Like federally insured to be included)

I also enjoy listening to Suze Ormans CNBC shows. She for the most part, is more general in her approach but she covers many pertinent financial issues. One of her recent shows she spoke about the perils of "free dinners" at retirement communities and the problems with annuities and other products these seminars sell. She says avoid them at all cost!

If a club would be organized I would be interested in participating if:

1. It was limited to people managing their own portfolios through brokerage accounts (This could be Fidelity, Vanguard, Scottrade etc)

2. Absolutely no discusion on how much people have. That is a private matter. Only percent in various investment choices.

3. Perhaps discussions on appropriate age allocations (we all remember the foolish people who lost everything because they had it all in Enron stock)

3. I think looking at various funds and bringing in due dilligence research could be helpful

4. Discussions on when to get out of funds and why

5. Share articles that could be helpful from reputable financial magazines

5. I would want absolutely NO salespeople appearing hawking their products. There are enough free dinners for people who want to participate in those!

6. The most important thing is I want to control my funds.. not somebody else!

Well anyway.. If anyone one else is interested and has the same goals... count me in!


Sea...

[travelstiles]

Sea -
Great suggestions. I also watch Suze Orman, and think she's terrific.
As managing our finances includes more than just our investable assets, I would also like to see topics such as estate planning, tax issues, etc. discussed as well.
And I am in total agreement about no salespeople or anyone looking for clients being members.
I would hesitate about excluding people who work with financial advisors, because they may also wish to learn more in order to ask intelligent questions of their advisors. Some may even decide to manage their own assets after a while, but it's not for everyone.
I've also got an idea for a name for the club - let me know what you all think:

The Financial Fitness Club :bigthumbsup:

Looking forward to getting started on this in '08 -

[Avista]

Everyone has great ideas that I agree with--especially the 6 points. I like the name also. Should it be The Villages Financial Fitness Club or would Financial Fitness Club or FFC be better?

We have a brokerage account through Fidelity, so this would be a great way for us to learn more. I agree, "No salespeople appearing hawking their products."

[LG]

Question for others who are experienced with financial planning: Is it reasonable to pay one time fee of $500 to Ameriprise rep. to help me set up strategies for retirement investing? She will do that plus roll over a few things into a Roth IRA. Says I'll never have to pay the fee again, unless . . . I change course drastically. Is it standard procedure to pay this kind of fee?

Have been enjoying Lake Sumter Web Cam, all the threads and valuable info. Still working full-time and plan to be able to come to TV in a year or two (still work f/t). Wondering if buying a house now, and renting it out would be smart. Just don't know where the market will be in two years.

Please keep all this good info coming. I check TOTV daily, sometimes twice/day.


We have foound a wonderful Finacial Planner.......... Skip West with Lady Tax Advisory Group

He and his partner Dan help us move some money around, put it into a principle safe fixed annuity that earned 14% last year. They do not charge for thier services.. NO PRESSURE.. and they follow up each year to see if anything has changed... Give him a call 352-360-0222 :bigthumbsup: :bigthumbsup: :bigthumbsup: :bigthumbsup:

[jerseygirl008]

Hello to all: Travelstiles, this is Jerseygirl13, however, had to change (to JG008)because I couldn't get on after the new upload. Anyway, I am thrilled to hear you want to lead up a club. LOVE THE NAME. Latest posts are so informative. I'm not in TV yet, not sure when I'll get there but count my financial-fitness-self IN. Thanks.

p.s. Happy Thanksgiving to y'all.

[peachpit]

I love the financial planning platform. Just make sure you have a financial planner. My experience is that most people don't want to manage their own money. Better to have an unemotional third party looking out for your best interest. Ask friends and family for a referral.

We all do a pretty good job of accumulating assets. Retirement income is a whole different ball game. I have read numerous studies on the topic. A couple mistakes are not having enough invested in stocks and taking out too much money to early. If you want your money to last, your withdrawals should be limited to 4% first year and then indexed for inflation.

Investment club???? I'd rather play golf!

[travelstiles]

:bigthumbsup:
Great stuff, Boomer,
I'm still up north too cold and don't golf, so that's not an issue (yet). When we move to TV next month that may change, but I've spent over 25 years in financial planning and retired or not, it's just as much fun to me as golf is to others ;D

[gfmucci]

Sea -
I would hesitate about excluding people who work with financial advisors, because they may also wish to learn more in order to ask intelligent questions of their advisors.
I started with a financial advisor just a few months ago. That doesn't mean I entrust all my earthly possessions to him. I still need to be knowledgable and stay engaged - probably more than ever because I need to learn why he is doing things differently than I have done over the years - that's why I hired him. But not every financial advisor, lawyer, doctor, or accountant does the right thing all the time. I hope the club encourages those with financial advisors to join. It will be a big help with "testing" the validity of what your advisor is doing to you, err, for you. ;D

[travelstiles]

well said -

Samuel Johnson :
Knowledge is of two kinds: we know a subject ourselves, or we know where we can find information upon it.

[gfmucci]

Here is one of my favorites that seems applicable:

"...there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know."

Donald Rumsfeld

[peachpit]

Financial Planning is a process and the Financial Planner simply quarterbacks that process. He or she, with the support of their back office, and experience offer suggestions to you on implementing a plan. You are the one who ultimately makes the decision. The planner guides the process. You will know exactly where you are financially at any given point in time. Your personal goals determine how aggressive or conservative you need to be with your allocations. Financial reviews are part of the process to see if you are 'on track'.

The scope of financial planning is so wide that you need professional help. It deals with insurance, trusts, accounting, tax, estate and business planning. An attorney, accountant, and insurance agent all will be a part of this process.

Want to retire to the Villages in 2 years? You need to see where you are currently and where you need to be in 2 years. Get it? Financial Planning. Should you pay cash for the house or finance it? Should it be in your name, your spouses name, both names, or should it be in a trust? Get it? Financial Planning

Although I've read the magazines and heard the media shows I do not do carpentry, yard work, plumbing, electrical, or wash windows. I hire professionals! I love people and it hurts me to see them get bad advise. I only want the best for you villagers.

[zcaveman]

zcaveman,
Not sure what you mean by "There are many free financial checks in TV with a free lunch."
Many institutions are willing to provide "free" introductory seminars (often with refreshments, if that's what you meant by a free lunch) or "free" initial consultations, but as you mentioned there has to be some type of pay for professional services.


I went for the free breakfast and the speech and signed up for the free initial consulation. All I needed was my net worth (if I remember) and a couple of other things. They basically agreed that I was going in the right direction and the only problem that they found is that I would be owing a big chunk to the IRS since I was not taking out enough witholding. They did try to sell me an annunity but I said "let me think about it" and never went back.

This was on September 11, 2001. The market has never been the same since.

I do most of my own legwork and then tell my financial planner what I would like to move. I manage my own 401(k) accounts with my old companies.