Pharmacist Net Worth 2020. Poll!

[mentos]

Some people want to pay a financial advisor to help them with their investments, tax optimization, etc. If they weren't doing it before and this guy helped them finally get to the right place, then how can you fault them for hiring him/her?

Why do you pay to get your oil changed when you could very easily do it on your own?
Why do you go out to eat when you could cook yourself for 1/4 - 1/3 of the price?

This is not a valid analogy. An oil change and eating out are fixed costs. They will cost the same no matter what. If he paid a fix cost for his advisor, fine. But he is paying a 1% fee no matter how big his portfolio is. He will pay anywhere between $1-100,000 for the same amount of work.

I feel like no one here took the SATs with all the analogies we see that don't make sense.

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[wazoodog]

This is not a valid analogy. An oil change and eating out are fixed costs. They will cost the same no matter what. If he paid a fix cost for his advisor, fine. But he is paying a 1% fee no matter how big his portfolio is. He will pay anywhere between $1-100,000 for the same amount of work.

I feel like no one here took the SATs with all the analogies we see that don't make sense.

How do you know it's not tiered? I think you injected a few assumptions that I never stated.

As for what car he drives, I say let's leave the guy's car out of this. Knowing how this thread is going, it would just lead a couple more tangents away (regardless what make the car is)...or would result in more questions that have little relevance to the OP's original question.

 

[mentos]

How do you know it's not tiered? I think you injected a few assumptions that I never stated.

As for what car he drives, I say let's leave the guy's car out of this. Knowing how this thread is going, it would just lead a couple more tangents away (regardless what make the car is)...or would result in more questions that have little relevance to the OP's original question.

Tiered is bad too. There should be no more than a nominal fee. That non-answer made it obvious that he drives a luxury vehicle. You are paying for his luxuries.

 

[wazoodog]

That non-answer made it obvious that he drives a luxury vehicle. You are paying for his luxuries.

Again, more incorrect assumptions.

 

[wazoodog]

There's a lot I've left out such as how I came into some of that initial cash, what kind of situation I was in, and what I realistically thought I would be doing with the cash if left to my own devices at the time. Also left out are important life events that had emotional effects, both tragic and joyous. From where someone else sits, it's easy to say I would have been better off another way - but it isn't one size fits all. It's naive to think we all have the same life circumstances and share the same exact financial goals and risk tolerance.

At the end of the day, what matters is I'm happy with the performance of the assets he's managed. Also, I'm more than happy with the performance of my assets overall along with my NW increase since using his services. Beyond the rate of return of the portion he helps manage, there has been a lot of indirect value in what I've learned and gained along the way. The rate of return on the assets I manage on my own (DIY) has also seen significant improvement as a side effect. I've seen overall NW (including total of DIY plus assets under his management) double in just about 5 years, even after subtracting his fees. Most importantly, it was done within a strategy I'm fully comfortable with. Could you or someone else have done the same or better? Undoubtedly possible. Would I have? Almost definitely not - and that's really the only answer that matters.

 

[Chrish]

All you need to do is put spare money into Vtsax or equivalent index and forget it. Why exactly would I pay someone else to do the same?

 

[wazoodog]

All you need to do is put spare money into Vtsax or equivalent index and forget it. Why exactly would I pay someone else to do the same?

Because maybe I don't want to put it all in an index fund and forget it. An index fund is a tool like any other investment vehicle. It's a part of my strategy, not the entire strategy. I'm glad that works for you though.

 

[Chrish]

Because maybe I don't want to put it all in 1 index fund and forget it. I'm glad that works for you though.

Tell me what index your FA has invested in if you don’t mind..

 

[Argentium]

Tiered is bad too. There should be no more than a nominal fee. That non-answer made it obvious that he drives a luxury vehicle. You are paying for his luxuries.

How you can make an assumption like that without even knowing what the tiers are, his investing performance, etc. is baffling to me

 

[wazoodog]

Tell me what index your FA has invested in if you don’t mind..

If you dont mind, I'll refrain from doing so. The thread was about net worth, which I offered up. I happened to mention that I used a financial planner and it seems to have gone under the microscope. Some things are appropriate to fall under the microscope of this pharmacy forum, but my financial strategy is one I'd like to keep separate.

 

[Chrish]

If you dont mind, I'll refrain from doing so. The thread was about net worth, which I offered up. I happened to mention that I used a financial planner and it seems to have gone under the microscope. Some things are appropriate to fall under the microscope of this pharmacy forum, but my financial strategy is one I'd like to keep separate.

I am just curious things your FA has done are complex enough that it would require professional attention or if it’s something as simple as investing into particular funds.

That’s perfectly fine you don’t wanna share. But then again, this is an anonymous forum where everybody is a “nobody”. I just don’t understand the rationale behind not discussing your financial strategy.

 

[wazoodog]

It strikes me as odd that people are so willing and insistent on advising what a random poster should be doing with their finances, especially when advice hasn't been solicited.

What if someone were to actually start following your advice and change what they're currently doing, and then it doesnt turn out well for a myriad of reasons? I'm sure everyone here means well, but it's one of the more important things in their life. I personally would avoid it altogether unless I'm willing to be held accountable.

 

[wazoodog]

But then again, this is an anonymous forum where everybody is a “nobody”. I just don’t understand the rationale behind not discussing your financial strategy.

What would be the purpose of discussing my financial strategy in pharmacy forum? Especially when there have been a few people setting a tone that makes such discussion seem less an exchange of ideas, and more an opportunity to impose their opinions. No thanks.

If someone is actually curious with sincere intentions, feel free to PM. If you've been unwilling to at least show an attempt at respectful dialogue, then I will assume your intentions are insincere - but you're probably not that curious anyway.

 

[StallionRx]

Have you not figured out yet you're not allowed to have an opinion beyond the group think tank here?...especially regarding finance

 

[wazoodog]

Have you not figured out yet you're not allowed to have an opinion beyond the group think tank here?...especially regarding finance

It's been made obvious.

 

[mentos]

What would be the purpose of discussing my financial strategy in pharmacy forum? Especially when there have been a few people setting a tone that makes such discussion seem less an exchange of ideas, and more an opportunity to impose their opinions. No thanks.

If someone is actually curious with sincere intentions, feel free to PM. If you've been unwilling to at least show an attempt at respectful dialogue, then I will assume your intentions are insincere - but you're probably not that curious anyway.

PM sent!

 

[footfairy]

Have you not figured out yet you're not allowed to have an opinion beyond the group think tank here?...especially regarding finance

Yeah! BMB preached real estate instead of index and that's the real reason Owlgrad banned him!!!

 

[owlegrad]

Yeah! BMB preached real estate instead of index and that's the real reason Owlgrad banned him!!!

He should have fallen in line.

 

[WVUPharm2007]

Have you not figured out yet you're not allowed to have an opinion beyond the group think tank here?...especially regarding finance

Calling our little tribe of investment watchers a "group think tank" is pretty funny. We argue over all sorts of things and disagree all the time. Gold, Bitcoin, real estate, indexing, stock picking...there's a lot we argue over. It's why that thread is humongous.

In fact, if something is clearly concerning to the point where all of frequent posters in the investment thread are actually in lockstep agreement on something, perhaps one should reevaluate what they are doing. We're not going to hold back out of some perceived sense of honoring other peoples' financial decisions as sacred or whatever.

 

[Splenda88]

I disagree. I hit $2.5 mil and I'm done. Toss it into VYM and lay in the cut in perpetuity. I have no interest in living the rich man lifestyle. I just want to not be a wage slave anymore.

$2.5 mil in VYM is ~100k dividend payout per year. That's not far from a rich man lifestyle if one has no other outstanding debts (e.g. housing, car etc...)

 

[mentos]

Calling our little tribe of investment watchers a "group think tank" is pretty funny. We argue over all sorts of things and disagree all the time. Gold, Bitcoin, real estate, indexing, stock picking...there's a lot we argue over. It's why that thread is humongous.

In fact, if something is clearly concerning to the point where all of frequent posters in the investment thread are actually in lockstep agreement on something, perhaps one should reevaluate what they are doing. We're not going to hold back out of some perceived sense of honoring other peoples' financial decisions as sacred or whatever.

I know right? Someone hasn't been to the investment thread aka arguing thread.

 

[wazoodog]

I know right? Someone hasn't been to the investment thread aka arguing thread.

Precisely why I avoid that thread. If I wanted to argue investment strategy, I'd do it there.

 

[Momus]

I think the concern would be more legitimate depending on how large of a portfolio is considered under AUM. As I said before, it's not my entire NW.

Also, an index fun was mentioned. What if I don't want to put all my investments in an index fund - well then I have to research what else is out there or what I don't know. Or pay someone who knows this stuff to help me manage.

For the past few years, it was as simple as: {How much portfolio grew) - (fee) > (How much portfolio grew under DIY). The difference between the two was significant enough. More importantly, I feel confident that even if the market tanks I'm still on track to reach my financial goals. Given my situation at the time, the AUM fee was acceptable considering the portfolio size when we started. However, I see your point that as it continues to grow it would be good to re-evaluate.

I am pretty much willing to bet $10,000 he did not make you 13.3%/yr like S&P 500 for the past 10 yrs. Most people fail at math and will not be able to calculate their annualized return correctly. They see their balance grow. "Oh, wow, he must be doing great for me". He is robbing you blindly. Most the of the return comes from your own money. You know this but keep insisting an advisor is needed for whatever reason.

A close enough hypothetical example for someone like you (1% advisor fee) vs. a do-it-yourself portfolio is as follows:
$500k starting balance principal
$50k annual savings
5 hours/year spent DIY investing
8% average annual return
40 years period

Total portfolio will be $17.4M after paying 1% fees every year vs. $23.8M with no advisor fees. After 40 years, DIY investing will save you a total of $6,346,102. Your savings come from: $2,138,426 in direct fees that advisor would have charged you, and $4,207,676 in investment returns that you'd have lost from paying those fees. You'll save 26.6% of your portfolio by firing your advisor now. If you spend a total of 200 hours in 40 years managing your DIY investment portfolio, you'll earn an extra $31,730.51 per hour spent.

Do what you want. After all, it's your money. You can give your advisor an extra $2.1M in direct fees or lose $6M (40 yrs) of your total balance if you are happy with him charging you 1%/yr. In investing world, it's how much fees you don't pay that matters the most.

 

[wazoodog]

I can pretty much willing to bet $10,000 he did not make you 13.3%/yr like S&P 500 the past 10 yrs. Most people fail at math and will not be able to calculate their annualized return correctly. They see their balance grow. "Oh, wow, he must be doing great for me". He is robbing you blindly. Most the of the return comes from your own money. You know this but keep insisting an advisor is needed for whatever reason.

A close enough hypothetical example over 40 years of investing 1% advisor fee vs. a do-it-yourself portfolio is as follows.
$500k starting balance principal
$50k annual savings
5 hours/year spent DIY investing
8% average annual return
40 years period

Total portfolio will be $17.4M after paying 1% fees every year vs. $23.8M with no advisor fees. After 40 years, DIY investing will save you a total of $6,346,102. Your savings come from: $2,138,426 in direct fees that advisor would have charged you, and $4,207,676 in investment returns that you'd have lost from paying those fees. You'll save 26.6% of your portfolio by firing your advisor now. If you spend a total of 200 hours in 40 years managing your DIY investment portfolio, you'll earn an extra $31,730.51 per hour spent.

Do what you want. After all, it's your money. You can give your advisor an extra $2.1M in direct fees or losing $6M (40 yrs) total balance if you are happy with him charging you 1%/yr. In investing world, it's how much fees you don't pay that matters the most.

You win. I throw my hands up in the air. Can we move on now?

 

[wagrxm2000]

You win. I throw my hands up in the air. Can we move on now?

So you ditched the advisor?

 

[wazoodog]

So you ditched the advisor?

Not yet - first I have to schedule time to read through the Investment Thread and Bogleheads and then discern what advice to follow and what not..or do all the posters pretty much agree on the same index fund? That would make it much easier. Tax efficiency, estate planning, retirement, cash management, legacy are all covered in the same thread I hope. That would save me several hours of my time.

I'm doing what I can to beat my family history, but it suggests theres a real possibility where I'll be fortunate to make it another 30 years, at best. That's why I've targeted retirement somewhat earlier so I can maybe enjoy some off time, but in any case, realistically I'm setting things up more for those I'll leave behind.

So yeah, after putting in enough time to research what I'm doing and feeling confident enough to DIY it all - you can bet I'll let my guy go. But at that point, I'll most likely have to start educating my wife so she'll know what is where and what to do after I'm gone. She finds all that stuff to be a big headache, so I dont know how long that will take but I expect it to be more than a couple (painful) hours. I can always point her to Bogleheads but English isnt her first language so not sure how much she will get through.

But yeah, I'm on track to ditch my advisor. Hopefully the market maintains a rate of return of 8% (adjusted for inflation??) for however long I'm around.

FYI - typically as the asset amount grows, the percentage decreases. So 1% may be a current fee, but decreases with growth. Not that it matters, since I'm now on the way to ditching. Time and peace of mind are overrated.

 

[wazoodog]

Did I add that reading up on investing was something I always found tedious? It's only somewhat recently that I've gotten little more interested in it, but nowhere near to the level of you guys - so I'm not looking forward to hours I'll spend studying investing. TBH - I'd rather spend that time doing something else like riding my bike. If you havent noticed, I dont spend much time posting on the investment thread or anything related to that topic. Picking individual stocks is something I find more interesting but that's not really the same thing. Getting in on SHOP when it was <$100 is one of the highlights. Selling TSLA at $250 is one of the disappointments.

 

[ifillrxs]

My financial advisor helps me plan for life's events. What if I die? What if my spouse dies? What if I'm disabled? Emergency fund? Power of attorney, will, advance directive. College plan for my kids. Things I heard and knew about but wasn't organized enough to commit to a plan. The actual investment advice was catered to my risk tolerance. It took into account income tax rates both now and what is expected in the future. My plan consists of a combination of 401k, IRA, Roth IRA, HSA, and high-yield savings for emergency fund. I pay a percentage every year and I am hopeful he will rebalance my portfolio based on current market conditions. He uses a combo of stocks and bonds and redistributes once or twice per year. If stocks are down, purchase more. I'm not sold on the idea of paying a percentage of my total investment every year, especially since I have an interest in investing. Time will tell if I think I'm better off with or without his continued advice.

 

[wagrxm2000]

My financial advisor helps me plan for life's events. What if I die? What if my spouse dies? What if I'm disabled? Emergency fund? Power of attorney, will, advance directive. College plan for my kids. Things I heard and knew about but wasn't organized enough to commit to a plan. The actual investment advice was catered to my risk tolerance. It took into account income tax rates both now and what is expected in the future. My plan consists of a combination of 401k, IRA, Roth IRA, HSA, and high-yield savings for emergency fund. I pay a percentage every year and I am hopeful he will rebalance my portfolio based on current market conditions. He uses a combo of stocks and bonds and redistributes once or twice per year. If stocks are down, purchase more. I'm not sold on the idea of paying a percentage of my total investment every year, especially since I have an interest in investing. Time will tell if I think I'm better off with or without his continued advice.

So you sat with them and they told you all this during one visit

What exactly did they do the next time? Say the same thing and update you how everything is going?

Pay for advice from an advisor but don't let them take money from you.

You don't need to rebalance, decide your risk tolerance and buy 2 to 3 funds. Change it up each year if you want less exposure to stocks

 

[wagrxm2000]

Not yet - first I have to schedule time to read through the Investment Thread and Bogleheads and then discern what advice to follow and what not..or do all the posters pretty much agree on the same index fund? That would make it much easier. Tax efficiency, estate planning, retirement, cash management, legacy are all covered in the same thread I hope. That would save me several hours of my time.

I'm doing what I can to beat my family history, but it suggests theres a real possibility where I'll be fortunate to make it another 30 years, at best. That's why I've targeted retirement somewhat earlier so I can maybe enjoy some off time, but in any case, realistically I'm setting things up more for those I'll leave behind.

So yeah, after putting in enough time to research what I'm doing and feeling confident enough to DIY it all - you can bet I'll let my guy go. But at that point, I'll most likely have to start educating my wife so she'll know what is where and what to do after I'm gone. She finds all that stuff to be a big headache, so I dont know how long that will take but I expect it to be more than a couple (painful) hours. I can always point her to Bogleheads but English isnt her first language so not sure how much she will get through.

But yeah, I'm on track to ditch my advisor. Hopefully the market maintains a rate of return of 8% (adjusted for inflation??) for however long I'm around.

FYI - typically as the asset amount grows, the percentage decreases. So 1% may be a current fee, but decreases with growth. Not that it matters, since I'm now on the way to ditching. Time and peace of mind are overrated.

I highly recommend consulting an advisor when you do retire.

When it comes to which indexes, the two most come ones are the two fund portfolio and the three fund portfolio.

You're looking at three indexes:

Vanguard Total Stock Market Index
Vanguard Total Bond Index
Vanguard Total international Index

You then put them at percentages depending on your risk generally going more bonds the closer you are to retirement

There isn't one shoe fits all, I personally like to have at least 5% in precious metals.

 

[wazoodog]

So you sat with them and they told you all this during one visit

What exactly did they do the next time? Say the same thing and update you how everything is going?

Out of curiosity, do you have any firsthand experience using a CFP / money manager? If so, for how long?

 

[mentos]

I am pretty much willing to bet $10,000 he did not make you 13.3%/yr like S&P 500 for the past 10 yrs. Most people fail at math and will not be able to calculate their annualized return correctly. They see their balance grow. "Oh, wow, he must be doing great for me". He is robbing you blindly. Most the of the return comes from your own money. You know this but keep insisting an advisor is needed for whatever reason.

A close enough hypothetical example for someone like you (1% advisor fee) vs. a do-it-yourself portfolio is as follows:
$500k starting balance principal
$50k annual savings
5 hours/year spent DIY investing
8% average annual return
40 years period

Total portfolio will be $17.4M after paying 1% fees every year vs. $23.8M with no advisor fees. After 40 years, DIY investing will save you a total of $6,346,102. Your savings come from: $2,138,426 in direct fees that advisor would have charged you, and $4,207,676 in investment returns that you'd have lost from paying those fees. You'll save 26.6% of your portfolio by firing your advisor now. If you spend a total of 200 hours in 40 years managing your DIY investment portfolio, you'll earn an extra $31,730.51 per hour spent.

Do what you want. After all, it's your money. You can give your advisor an extra $2.1M in direct fees or lose $6M (40 yrs) of your total balance if you are happy with him charging you 1%/yr. In investing world, it's how much fees you don't pay that matters the most.

How's the financial advisor job market?

 

[aqb]

My plan consists of a combination of 401k, IRA, Roth IRA, HSA, and high-yield savings for emergency fund.

High yield savings still exist right now?

 

[WVUPharm2007]

High yield savings still exist right now?

I got $20k emergency cash in one at Citizens Bank. I get a whopping 1.0%.

 

[mentos]

High yield savings still exist right now?

I miss the days when ING and WaMu gave 6%.

 

[wazoodog]

How's the financial advisor job market?

For a CFP with good reputation, pretty good I think.

The people I know who are career financial advisors without the above, they seem to struggle finding enough clients to survive.

 

[wagrxm2000]

How's the financial advisor job market?

There's so many suckers out there, it's probably pretty good

 

[WVUPharm2007]

There's so many suckers out there, it's probably pretty good

To get a CFP certification it's seriously only a 30-40 credit hour process at worst. A lot are like 9 month programs You just need a bachelors or higher in any discipline then do their educational requirement at an online college. Then pass the exam. (Edit: And apparently apprentice for a few years after passing the exam)

Education

The two-part education requirement includes: (1) completion of CFP Board-approved coursework, and (2) a bachelor's degree from an accredited college or university.

www.cfp.net

Let's all get this and start a financial planning business when pharmacy officially goes tits up.

People who've taken it claim that the test is hard, but it can't be any worse than the **** we've done for pharmacy school.

 

[wazoodog]

To get a CFP certification it's seriously only a 30-40 credit hour process. You just need a bachelors or higher in any discipline then do their educational requirement at an online college.

Don't you need 3 years experience working for a CFP or something?

 

[WVUPharm2007]

Don't you need 3 years experience working for a CFP or something?

You gotta do something in between being laid off from pharmacy and getting this certificate. But, yeah, I looked into it, you got 5 years to log 4000 hours as an apprentice after passing the exam.

Looking on indeed, I see jobs at a lot of big banks offering apprentice financial advisor gigs. For Wells Fargo, the required qualification is "1+ year of experience of one or more of the following; customer service, sales, or relationship building."

Quite frankly, 1 month of customer service at CVS should be worth 24 months anywhere else.

 

[WVUPharm2007]

This is encouraging, though.

I could apprentice at a bank as a financial planner, learn the ropes, pass the CFP exam...then in 24 months or so launch my own financial planning business catering to medical professionals and especially pharmacists.

This may be option #4 for post pharmacy career. In addition to moving to Panama and opening a bar on the beach, moving to Estonia and committing computer crimes, and, of course, doing something crazy in public, being declared mentally incompetent, and living off of disability in WV.

 

[wazoodog]

This is encouraging, though.

I could apprentice at a bank as a financial planner, learn the ropes, pass the CFP exam...then in 24 months or so launch my own financial planning business catering to medical professionals and especially pharmacists.

This may be option #4 for post pharmacy career. In addition to moving to Panama and opening a bar on the beach, moving to Estonia and committing computer crimes, and, of course, doing something crazy in public, being declared mentally incompetent, and living off of disability in WV.

Do you even know why people who use a CFP do so, or for what reasons they justify paying an AUM percentage for their services? If you dismiss it as a rob or think they're just suckers, I'm not sure how much success you'll see as a CFP. Trust me, people know the fee they're paying an asset manager is quite a lot and increasing. If you really want to pursue a CFP career, it pays to know why your customer still find it's worth it, even if you dont agree with it.

It's true that most of those people arent as knowledgable about investing, but many of them are very good at judging who they can trust to deliver on their expectations on a consistent basis - if you see them as a sucker, they'll know it and dismiss you as a shark who doesn't relate to the reasons why they sought your services in the first place.

 

[Splenda88]

@wazoodog

It's good that you are receptive to the idea of parting away with your FA now... I have been watching you going back and forth with some posters here and did not want to intervene even if you were somewhat against their advice because the more they were piling on, the more more you weren't open to listen to them... At the end, I am glad you are receptive to their advice although a couple of posts were a little bit too 'forceful'.

Investing money were a mystery 15+ years ago, but now everything is more transparent with index funds... One can argue it's better to invest in index funds in term of risk since most funds have outperformed the market in the past 10+ yrs...In addition, these funds perform consistently better than most of these big hedge fund managers in Wall Street.

I wish someone had told me about index funds 10+ yrs ago; I would have been sitting well right now. I have 2 rental properties and I probably will sell one soon and put the profit (~280k) in index fund (set it and forget it except adding money to it every month).

Listen to your colleagues! they are giving good advice.

 

[wagrxm2000]

Do you even know why people who use a CFP do so, or for what reasons they justify paying an AUM percentage for their services? If you dismiss it as a rob or think they're just suckers, I'm not sure how much success you'll see as a CFP. Trust me, people know the fee they're paying an asset manager is quite a lot and increasing. If you really want to pursue a CFP career, it pays to know why your customer still find it's worth it, even if you dont agree with it.

It's true that most of those people arent as knowledgable about investing, but many of them are very good at judging who they can trust to deliver on their expectations on a consistent basis - if you see them as a sucker, they'll know it and dismiss you as a shark who doesn't relate to the reasons why they sought your services in the first place.

Why are you defending CFPs?

No one is saying they can't be useful, there just isn't a single reason why anyone should be managing your money. I literally do not see most of my salary because it all gets auto invested in either our 401k or an index fund. Anyone can do this.

 

[wazoodog]

@wazoodog

It's good that you are receptive to the idea of parting away with your FA now... I have been watching you going back and forth with some posters here and did not want to intervene even if you were somewhat against their advice because the more they were piling on, the more more you weren't open to listen to them... At the end, I am glad you are receptive to their advice although a couple of posts were a little bit too 'forceful'.

Investing money were a mystery 15+ years ago, but now everything is more transparent with index funds... One can argue it's better to invest in index funds in term of risk since most funds have outperformed the market in the past 10+ yrs...In addition, these funds perform consistently better than most of these big hedge fund managers in Wall Street.

I wish someone has told me about index funds 10+ yrs ago; I would have been sitting well right now. I have 2 rental properties and I probably will sell one soon and put the profit (~280k) in index fund (set it and forget except adding money to it every month).

Listen to your colleagues! they are giving good advice.

It's been an interesting discussion for sure. Theres been a lot of good information volunteered up by fellow colleagues here and I found myself reading Bogleheads forum more interesting than I thought I would. I appreciate the information people offered up, even if forceful.

That said,I cant help thinking that those same people dont completely understand why people who use an asset manager do so, despite the fee. Theres a fundamental difference in how we think of investment strategy.

People are allowed to spend their money foolishly. The level of foolishness is relative. At the end of the day, there are plenty of us who found an upside despite paying someone an AUM percentage. Most likely, we dont fixate on the fee and how much more we could have made..we're just content we are moving in the right direction instead of watching our savings deflate due to inflation. A lot of people have no interest in reading and researching this topic, but dont feel confident doing DIY unless enough time has been invested. Nothing is free. Its paid through either time spent learning or something else.

Personally, I came into a few windfalls courtesy of being in pharma...and I just kept it in a savings account for 2 years watching it do nothing (or worse, devalue because of inflation). I was skeptical about engaging a CFP, but at the end I decided even with the fee it was better than what I had been doing. I thought reading anything about investing was tedious. I know a few of you post on the investment thread a lot and genuinely find the topic interesting but that's not me. So yea, using a CFP was the best decision I made at the time.

People dont use an asset manager expecting them to beat or even match the market in specific years. I have my own trading account hitting a 300% gain to support. They use their services because a good asset manager can deliver consistently even in a down market and at worst, wont lose the principal. And yeah, some people are just old school and like the personal touch and find the fee worth even that.

Personally, I have a few friends and acquaintances that are non-certficied financial advisors and I've never used their services. The one I ended up using was referred to by a former boss. Majority of his clients are from pharma - and a lot from 1 big pharma in particular. I trust the guy and hes done me well. If I was a Boglehead, i would have done better DIY. But humbly speaking, I'm not a Boglehead. More than that, hes helped me in other areas besides investing...and when I'm gone it gives me peace of mind to know that all my wife has to do is give him a call and it will be made easy for her. For that, the fee has been worth it.

 

[wazoodog]

Why are you defending CFPs?

CFPs need some love too.

 

[wagrxm2000]

CFPs need some love too.

Tell me one thing your CFP does for you today that is useful? Not the first few times but today.

Then tell me if that's worth 1% a year.

 

[WVUPharm2007]

Do you even know why people who use a CFP do so, or for what reasons they justify paying an AUM percentage for their services? If you dismiss it as a rob or think they're just suckers, I'm not sure how much success you'll see as a CFP. Trust me, people know the fee they're paying an asset manager is quite a lot and increasing. If you really want to pursue a CFP career, it pays to know why your customer still find it's worth it, even if you dont agree with it.

It's true that most of those people arent as knowledgable about investing, but many of them are very good at judging who they can trust to deliver on their expectations on a consistent basis - if you see them as a sucker, they'll know it and dismiss you as a shark who doesn't relate to the reasons why they sought your services in the first place.

Why do think I would rob people? I'm over here telling you I'd undercut the rates of the actual "sharks."

 

[wagrxm2000]

Why do think I would rob people? I'm over here telling you I'd undercut the rates of the actual "sharks."

You wouldn't undercut me would you? I already offered half the rate plus I would index everything so I'd beat his advisor over time too.

 

[wazoodog]

Tell me one thing your CFP does for you today that is useful? Not the first few times but today.

Then tell me if that's worth 1% a year.

Fair question. Not really today since I read some Bogleheads today, but on most days its allowed me to not think about the subject of investing and spend the time doing something else (like biking, spending time with family, or learning another language) instead of reading and studying index funds to the point I feel confident enough to DIY. If you couldn't tell already, I dont enjoy reading about it even though I know it's for own benefit. So yeah, 1% is steep but I havent lost sleep over it. If I start to think its steep, I just remind myself of how I was doing for the 10 years before. Life is short and I dont want so spend it reading on a subject I find tedious.

Although, recently i have found it a little more interesting partly due to all you guys.