On Life and Love

A Financial Advisor: What Am I Even Looking For?

I spoke with a financial advisor last week.

I really don’t trust other people with the future of my money. I especially don’t trust most people’s advice when they offer it broadly.

Most big-name finance people seem to either hand out advice that’s uselessly bland for someone geeking on the topic (that’s me!), or so tailored to a particular world-view, product, or life situation that there’s barely even a gem worth digging out of the morass. Plenty of simple things don’t get accounted for in books and writings on the topic:

  • What if I don’t have employer matching in my 401(k) and have lousy investing choices there?
  • What if I’m a job-hopping young professional?
  • What if my income is going to drop within the next year (and that’s okay)?
  • What are non-traditional pre-tax investment vehicles (other than 401(k), govment crap, and TIRAs)?

I find the best information on personal finance blogs, truly. Other people have had these questions. Other other people have suggestions, references, experiences. *Yoink*.

As I chip away at lover boy‘s financial ignorance, I have to keep pushing my own knowledge deeper. I may be explaining the basics of (micro) investment asset allocation in getting a basic Roth IRA in place, but what’s the point of index funds and portfolios without some idea of what the end game is, that I’m doing the right thing for me/him right now even if I have to switch things up later?

So I caved, and decided to talk with someone who works with folks individually. Unfortunately, I didn’t find that having base knowledge increased the level of the conversation. I’m used to (and tired of) getting the “Oh, you’re so advanced/knowledgeable/etc. for someone your age” line.

I disagree. I’ve got friends much better off than me. Being a smidge ahead of the general population is nice and all, but won’t put food on the table when I’m 105 and only working for pay 15 hours a week (doing whatever it is I love by then).

I plan to live forever (PDF), by the way.

We spent about an hour chatting pre- and post-tax allocations, as well as the standard vertical allocations (aggressive, moderate, safe). He had run my numbers ahead of time, but his prep wasn’t complete and he made some poor assumptions.

I’m also worried he’s trying to sell me something. Session one was a wash. I don’t know what I expected to get (which is probably part of the issue), but I didn’t get it.

He did some interesting initial assessments that offered up a different perspective on my financial picture, though. *Yoink*. I’ll keep that, thanks.

One more session, I think, before I give up on that.


  • Mark

    I applaud you for actually seeking out external advice. That’s more than probably 80% of the general population would do on their own.

    I agree with you that most financial planners make poor assumptions based on age, career, etc. but i feel that the purpose of that kind of advice is just that: advice. I want those types of people to bring up things and situations I may have not thought of —

    – What happens if my wife or I get a terminal disease – is our health coverage enough? (yes)
    – We have business meetings at our house – does my homeowners insurance policy cover it? (yes)
    – If I lose my job – do I have enough of an emergency fund to make it so that I don’t have to settle for the next thing that comes along? (yes)
    – Am I putting away enough each year to be able to retire a multi-millionaire based on current market projections? (yes)
    – Do I have a plan to protect my assets as my net worth increases by moving funds from risky investments with high yields to less risky investments with a steady (but smaller yield)? (yes)

    I do my own investing in Roth IRAs, I don’t take advantage of company 401(k)’s because my employer doesn’t match – I probably will take advantage of a Roth 401(k) if they _DO_ start matching, but for me, it’s a better investment to be in a non-company plan where I control the assets and investments.

    My wife and I follow Dave Ramsey’s plan ( http://www.daveramsey.com/new/baby-steps/ ). It’s gotten us completely out of debt and we’re massively saving for retirement (while still enjoying life because we don’t have payments to the bank).

    You just have to make sure you’re comfortable with your plan. I think you’re smart enough to find what works for you and stick to it and make it happen.

    • Melissa Avery

      @Mark: Very true on the point of grabbing up that expert advice, especially in areas you hadn’t considered before.

      Here’s a question, since you mentioned Roths and 401(k)s: let’s say you have no employer matching, but have access to a Roth 401(k). If you’ve maxed out your Roth IRA, isn’t it [generally] better to use a Roth 401(k) than a normal taxable investment account?

      I like Dave Ramsey a lot for personal finance (debt, saving, budgeting, etc.), but I don’t like his investment advice–he’s into loaded mutual funds, and suggests higher rates of return than seem reasonable based on my research. I tend to fall more into the Bogleheads group (all things with a grain of salt, of course). I love that Ramsey gets people off their asses and taking control of their finances, though. Once people can breathe after getting out of debt, they can have the luxury of thinking about the longer-term future. Gotta have it.

      Did you even pay off your house? O_O

      • Mark

        Anything that you can save where you can pull out the money tax-free is what you want to do first, IMHO. So if you’ve got no employer matching, but access to contribute to a Roth 401(k), I’d fund that to the max, fund a Roth IRA to the max, and THEN start putting money into taxable or non-savings investment accounts.

        My philosophy is that i’d rather them tax it going in then coming out because:
        A.) I would stake my life that in 30 years, taxes will be higher than they are right now
        B.) I will most likely be in a higher tax bracket in the future (when I am pulling money out of these accounts) than I am right now.

        I’m a big fan of how Dave Ramsey gets people out of debt and encourages them to live debt free, and I agree that his investing principles are a bit “simplistic” (I don’t follow his investing principles – he always says, “good growth stock mutual funds”, but never suggest anything in particular).

        And as far as the bank is concerned, yes – my house is paid off (though I’m now paying “The Bank of Dad” 15 yr loan at a meager interest rate – it should be paid off in 11yrs). So as far as banks and my credit reports are concerned, I haven’t had any debt since last summer. Although the interest I’m paying is offset by my father’s generous “matching program” for our retirement accounts. I’m not going to look a gift horse in the mouth!