For The Financial Planners Out There

Bozo | Sep 3, 2017 | 1,375 posts since 2011

For your joke of the week, my wife and I just hit 70, and figured financial planning might be warranted. We called the in-house "wealth management" division of our local bank, and the guy just chuckled. "So", he said, "you have a conservative portfolio in Vanguard Funds, a balanced fund in the wife's 401K, and the rest in laddered IRA CDs."

He offered his services at no cost, but candidly admitted he could not improve on our asset allocation.

Once you get too conservative, financial planners lose interest.

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Bozo | Sep 4, 2017 | 1,375 posts since 2011

We actually met with one financial planner who started salivating when she found out we had a $250K LOC (with $244,800 available to tap). She actually suggested we tap the LOC "before it goes 'poof' in the next financial melt-down". And what would we then do with the funds from the LOC, I meekly asked. "just let me handle it," My brain reeled. My favorite was when she said "low-fee Vanguard index funds are a tactic, not a strategy." I was tempted to say that owning the market, rather than trying to beat it through active-management, was the strategy. Low fees were just a side-benefit. I came to the conclusion that she was really interested in separating me from my money. Kinda reminded me of the carnival barkers in days of yore.

Bottom line: we're going to meet with our bank's financial planner next Tuesday. I suspect he'll say then what he said on the phone last week. Big difference: he's not selling anything. He's a fiduciary. She was peddling, and was not a fiduciary.

Anon456 | Sep 4, 2017 | 249 posts since 2011

If you ask a hammer, you will look like a nail. It's one thing to do planning to get ready for retirement age, and another when retired. So the question is GROWTH verses PRESERVATION. YES, almost all advisors will tell you that CD's are really not keeping up with inflation and are NOT a good investment. They are correct, especially over the last 10 years. But mine (CDs) are not meant as an investment. They are a safe heaven only meant to "park wealth" so it will be here when needed.

Many advisors will attempt to minimize (diversify) risk while concentrating on growth as the objective. OK for a small portion of what I own, but mostly mine is manage the risk as the number one goal. Changes the mix all together.

Once you get to your financial goals, the main task at hand, in my opinion, is to make sure you do not lose it.

Bozo | Sep 4, 2017 | 1,375 posts since 2011

Anon456, totally agree. The initial "financial planner" was somewhat taken aback by our goals: (1) capital preservation; (2) income in excess of inflation (if possible); and (3) way down the list, growth. I guess I did look like a nail. Excellent metaphor.

Kaight | Sep 4, 2017 | 1,192 posts since 2011

You + wife might or might not have looked like nails . . . . . but I'll bet your female "financial planner" still wanted to hit you both over the head for using up her time and failing to fall for her self-serving money making "strategies". You + wife did WAY better with her than I would have done. I would have LMBFAO right in her face! Would bet I was already retired before she was out of grade school. I still am. And nobody else has EVER told me how to run money.

Bozo | Sep 4, 2017 | 1,375 posts since 2011

Kaight, no harm, no foul. Her hammer kept missing the nail(s) and kept making dents in the wood nearby. The funniest part of our second meeting was when I had to explain to her the "no EWP for partial withdrawals from IRA CDs for folks over 59 1/2" at PenFed. I suspect that's when she threw in the towel.

In fairness, she did comp my valet parking.

Bozo | Sep 5, 2017 | 1,375 posts since 2011

Moving right along, my wife and I met with the bank's financial planner this morning. He basically said "you're investing well for your heirs. Start flying first-class, because if you don't, your heirs most assuredly will." I kid you not, that's what he said.

One thing he did not suggest was tapping our line of credit, which is with his bank. As a bankster, he was somewhat impressed by my IRA CD ladder. I thought to myself, that's thanks to Ken Tumin.

Kaight | Sep 5, 2017 | 1,192 posts since 2011

Bozo: My opinion is you and your wife are VERY young to be listening to such financial counsel as that. I have two relatives living in CA who were in your situation back when they were your age. They spent quite freely. Today they both are in their nineties. Things have changed to a remarkable extent for them vis a vis money, and their circumstances have become much tighter.

I've been retired well over thirty years. In the early days perhaps the most challenging aspect was impossibility of gauging in advance what the distant future would hold. For all of us but for folks as young and you and your wife in particular, like it or not, 2037 remains too far out to evaluate accurately. Be prudent. It's still early. Don't make too many assumptions regarding the future. It's not just about keeping your powder dry. It's also about having powder available in the first place in the distant, unknowable, future.

Bozo | Sep 5, 2017 | 1,375 posts since 2011

Kaight, the "frugal" gene will always be part of my DNA. I just thought the financial planner's comment was, well, interesting. It's really not all that far from what I said to my Mom when she reached 90+ years.

I suspect I'll be a tightwad until I die. My wife, on the other hand, has a more balanced view. Accordingly, she has control of the checkbook. I have control of the easy chair and the remote on the TV.

Kaight | Sep 5, 2017 | 1,192 posts since 2011

Well, sure. I would agree such advice is fine for any nonagenarian, unless it be a person in astonishingly and uncharacteristically great health. But you and your wife remain very young, IMO, for such advice to be equally valid for you. And the fact your mom lived into her 90's also should influence your thinking.

I am reminded of the "Die Broke" guy. He got a book out of his thesis. What he forgot to mention is "Do not die late".

Bozo | Sep 6, 2017 | 1,375 posts since 2011

Kaight, attempting to match one's assets to one's life expectancy is daunting, I would agree. My wife and I have agreed to abide by the RMD formula, which assumes you'll live to the ripe old age of 115.

Bozo | Sep 6, 2017 | 1,375 posts since 2011

For your joke of the day/week/month, my wife and I met with our bank's financial planner today. He noted that I have a lot of IRA CDs in many places, and it might be handy to consolidate and simplify. I noted that I was "pushing limits" as it were. He was a nice guy, perhaps a bit slow on the uptake. When I had to explain FDIC/NCUA insurance limits to him, for IRA CDs, my eyes glazed over.

In fairness, he doesn't sell IRA CDs (although his bank certainly does). I was somewhat taken aback when he started mumbling about SIPC limits.

As I joked to my wife, "financial planners" like a shoebox. As in, a person who walks in the door with all their financial documents in a shoebox, totally disorganized. The golden client. Read my lips: "assets under management"

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