Bank financial planner or independent financial planner, which one?

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  #1  
Old 03-24-2021, 06:46 PM
Debfrommaine Debfrommaine is offline
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Default Bank financial planner or independent financial planner, which one?

Any thoughts on using your bank investment firm or would you use an independent firm i.e. Fidelity, etc. for your financial advisor?

Thanks for your feedback.
  #2  
Old 03-24-2021, 07:39 PM
Stu from NYC Stu from NYC is offline
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Prefer to deal with someone who does not earn a commission buying and selling just selling you advise with no ax to grind.
  #3  
Old 03-24-2021, 08:28 PM
retiredguy123 retiredguy123 is offline
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I would definitely not use a bank as a financial advisor. If you really need someone to advise you on investments, I would would hire a "fee only" financial planner, who is a fiducuary, and states it in writing. Fidelity Investments and Vanguard Investments are two excellent companies to deal with. And, whatever you do, DO NOT let someone talk you into transferring your money into an annuity. If you contact a commission based advisor, that is the first thing they will recommend to you, because it will make them a huge commission.
  #4  
Old 03-24-2021, 08:35 PM
Art cov Art cov is offline
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In my opinion. Stay clear of banks!
  #5  
Old 03-24-2021, 10:49 PM
Boomer Boomer is offline
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I would not use a bank.

The reason?

I don’t know if this is how it is in TV, but I know that there are banks in the city I’m from where tellers are instructed to pay special attention to customers who maintain large balances in their checking accounts. (They are told to be especially aware of older customers who can sometimes tend to keep larger balances.)

Then — as part of their “customer service” — the teller is supposed to suggest an introduction to the bank’s investment advisor. (I am pretty sure there are incentives for tellers who make these connections.)

How do I know this?

I know two people who have been tellers, one is a friend who retired from a tech career with a big company but wanted to work part time. She got a job at a branch of the biggest bank in the city.

She said the tellers were constantly pressured to sell, sell, sell — might be just a credit card, but even better, getting money into the hands of the bank’s investment department.

She would not do it. But she did not need the job so she was immune to pressure. She was also very good at being a teller so the boss left her alone.

The other story made my skin crawl. This one was from a woman who had worked as a teller in a downtown bank. She had been there for a long time, and knew many of her customers who had been coming to her window for years. I remember she said her customers were among the richest and the poorest in the city. She loved her job because she liked interacting with people and the day went by fast.

Then the bank was sold and Cruella DeVil was the new manager. The pressure was on to grab those big accounts for the bank.

One older lady had an especially large balance and the teller was told to reel it in.

The teller had known the woman as a customer for a long time. She said to the boss, “I can’t do that. I am afraid she is slipping into dementia.”

To which the boss replied, “So much the better.”

The teller quit.

The banks I am talking about are not in TV. But the stories I am telling you are the reason why I would never put investments in the hands of a bank. Whatever they are selling has to be super high commission to cause that kind of pressure on tellers.

I bank only with community banks, but I do not invest with them either. I have an aversion to big banks because of the stories I just told you. (I guess online banking has cut down on the in-person opportunities for “customer service.”)

Fidelity or Vanguard can help, as can others like them. You can arrange to talk with someone and see if you click. If you are rolling money from a 401(k) or a 403(b) into an IRA, they can help you do that so you don’t cause a tax consequence. They should also help you evaluate your risk tolerance. With companies like this, you also have the option to manage your own accounts.

(Oh my, you asked for the time, and I built you a clock. I must feel like typing tonight.)

Anyway, take your time and find your comfort zone.

Boomer

Last edited by Boomer; 03-24-2021 at 11:06 PM.
  #6  
Old 03-25-2021, 05:55 AM
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They all need to make money......fee based or buy/sell.
The fiduciary paper DOES NOT guarantee best interest.
Depending on your balance & your knowledge & your willingness to learn.......FA probably has no value.
All the information you need on investing & modeling is available without a FA.

But if you must......Understand Fees.
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  #7  
Old 03-25-2021, 06:03 AM
Debfrommaine Debfrommaine is offline
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I really appreciate the feedback. It's a lot to figure out when I have no expertise in this area. I am trying to learn but need guidance to go in the right direction.
  #8  
Old 03-25-2021, 06:12 AM
MickeyStevens MickeyStevens is offline
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Quote:
Originally Posted by retiredguy123 View Post
And, whatever you do, DO NOT let someone talk you into transferring your money into an annuity. If you contact a commission based advisor, that is the first thing they will recommend to you, because it will make them a huge commission.
Interesting, we put money into 3 annuities quite a few years ago, we now enjoy a steady stream of income each month from them.
  #9  
Old 03-25-2021, 07:05 AM
valuemkt valuemkt is offline
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Quote:
Originally Posted by Debfrommaine View Post
I really appreciate the feedback. It's a lot to figure out when I have no expertise in this area. I am trying to learn but need guidance to go in the right direction.
Please be very careful and don;t rush into anything.

No on banks. That's pretty much universal.

Finding a fee only financial planner is good advice, but might be more difficult than it sounds.

I am not a fan of annuities. Opinions differ. I just read a book by a retirement expert that explained annuities and how they are constructed - it did not change my opinion one bit -

Going to Fidelity or Vanguard is good advice. Their products do not carry what is known as a front end load, which in many cases is over 5%. I have some money in Fidelity - they do not manage my account, but the local support I receive from them has been phenomenal.

Without reaching too far, it appears you may be single, or recently single. In addition to a financial plan, or part of it, you need to shield your money from any upcoming "relationships" you might get into. That would be an estate planner. There are plenty of them here as well. Do a search for Amy Pittman to get an idea of what services they provide.

Advice to do it yourself is ill advised. If by now you have not developed expertise or confidence in this arena, you definitely need help to construct a plan to grow and protect your assets.

God Luck
  #10  
Old 03-25-2021, 07:07 AM
petsetc petsetc is online now
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My obligatory canned reponse...

In addition to all this good advice, take time to read Paul Merriman’s 3 free ebooks.
1. First-Time Investor
2. 101 Investment Decisions
3. Get Smart or Get Screwed (this is a MUST read)

Found at paulmerriman.com
  #11  
Old 03-25-2021, 07:44 AM
retiredguy123 retiredguy123 is offline
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Quote:
Originally Posted by MickeyStevens View Post
Interesting, we put money into 3 annuities quite a few years ago, we now enjoy a steady stream of income each month from them.
Many people don't know that a variable annuity is a life insurance policy. It is a contract, not a typical investment. In rare cases, an annuity can be an acceptable product. But, typically, a person who sells a variable annuity will receive an upfront commission of about 10 percent of the amount invested. So, if a client buys an annuity for $100K, the salesperson will get a windfall bonus of $10,000. That is why many annuities are sold to people who should not be buying them. The insurance companies are happy to pay these large commissions because they know that they will recover the money with the annual built-in management fees for the annuity contract itself, and also the management fees for the underlying investments that are made on behalf of the client as part of the annuity contract. Also, the annuity contract will have a "surrender charge" if the client wants to terminate the contract early, usually within 7 to 10 years after signing it. This is a penalty for early termination that many people end up paying. So, annuities are often pushed by salespeople just to get a commission, and not to assist the client with appropriate investments.

Annuity contracts are very lengthy and complicated, and the salesperson will not even let you read the contract until you have already paid for it. Last year, a friend asked me for advice on a specific annuity, so I called the insurance company and asked for a copy of the contract. The person I spoke to refused to provide it, got extremely angry, and hung up on me. I would not advise anyone to sign a contract that you cannot review before signing.
  #12  
Old 03-25-2021, 08:34 AM
Boomer Boomer is offline
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Quote:
Originally Posted by valuemkt View Post
Please be very careful and don;t rush into anything.

No on banks. That's pretty much universal.

Finding a fee only financial planner is good advice, but might be more difficult than it sounds.

I am not a fan of annuities. Opinions differ. I just read a book by a retirement expert that explained annuities and how they are constructed - it did not change my opinion one bit -

Going to Fidelity or Vanguard is good advice. Their products do not carry what is known as a front end load, which in many cases is over 5%. I have some money in Fidelity - they do not manage my account, but the local support I receive from them has been phenomenal.

Without reaching too far, it appears you may be single, or recently single. In addition to a financial plan, or part of it, you need to shield your money from any upcoming "relationships" you might get into. That would be an estate planner. There are plenty of them here as well. Do a search for Amy Pittman to get an idea of what services they provide.

Advice to do it yourself is ill advised. If by now you have not developed expertise or confidence in this arena, you definitely need help to construct a plan to grow and protect your assets.

God Luck

Debfrommaine,

The advice from valuemkt that I am quoting here is excellent.

Everything he has said is in your best interests.

You might want to call Fidelity and see if you can get an appointment to talk with someone in person. That would be a start.

If the money is sitting in the bank right now, don't feel like you have to make a decision right away. Leave it there, even though it is not making any interest, until you know how you want to handle investment possibilities. I strongly believe in maintaining a moat of cash around stock investments. We are never going to see the return on CDs that our parents got -- or even the 5% that some of us got several years ago. But sitting on some cash is never a mistake.

Please give consideration to every point valuemkt made in his post. (I don’t know Amy Pittman, but I especially like that valuemkt said to protect your assets -- and your privacy.)

Boomer

Last edited by Boomer; 03-25-2021 at 10:10 AM.
  #13  
Old 03-25-2021, 08:48 AM
Boomer Boomer is offline
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I don't know why my last post showed up twice. The server seems to have gone haywire this morning.
  #14  
Old 03-25-2021, 09:22 AM
Stu from NYC Stu from NYC is offline
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Annuities are great, especially for the salesman selling them.

Old saying is annuities are never purchased they are sold.
  #15  
Old 03-25-2021, 09:36 AM
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Quote:
Originally Posted by MickeyStevens View Post
Interesting, we put money into 3 annuities quite a few years ago, we now enjoy a steady stream of income each month from them.
The same thing can be said by putting your money in a checking account, or in your mattress............but at least with these options, no fees.


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Last edited by dewilson58; 03-25-2021 at 09:43 AM.
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