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Author: gemini1 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76115  
Subject: A meeting with the WISE Date: 7/14/1999 10:54 AM
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Hello all Fools,
I met with one of the Wise last nite to discuss my mother in laws portfoilo..She is 75 and has about 250,000 in assets. Anyway...some of the things he told me I could not believe. He said no one should ever put money in a childs name, since it is more difficult to access grant and loan money for college..
When I told him I had a drip for my grandson he said it was not a good idea..
Also-- he belives in load funds over no loads, since he claims that fund managers have access to info about the funds before we do and everyone should have their money professionally managed. I have been doing my own portfolio for abour 7 years and I am doing fine...I read everything and am very careful.
I realize I have been investing within a bull market but everyone's situation is different with regards to how much risk they can tolorate.
He did seem knowlegable and is a CPA but I do not agree with alot of what he said..
Well -- i have more to say on this and some questions but I will post it at another time..
Debbie
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Author: WilliamLipp Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12153 of 76115
Subject: Re: A meeting with the WISE Date: 7/14/1999 11:58 AM
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gemini1 Date: 7/14/99 10:54 AM Number: 12147
He said no one should ever put money in a childs name, since it is more difficult to access grant and loan money for college.

This argument is very popular. It's an unintended consequences of making financial aid dependent on need: You get more aid if you look poorer, so look poorer. As a practical matter, if you are savvy enough to be here, you probably won't qualify for much need-based aid anyway. I also oppose this approach on a moral basis, but that's something everyone must decide for themselves.

Also-- he belives in load funds over no loads, since he claims that fund managers have access to info about the funds before we do and everyone should have their money professionally managed.

It makes no sense at all to approach this problem with rhetorical analysis. This is clearly a problem for numerical analysis. And the numerical analysis has been done many times. It always comes out the same - beating the S&P500 index fund in any one year is a matter of luck, with only 5-20% of the funds getting lucky in any one year. Getting lucky three years in a row is like flipping heads three times in a row - it happens with some regularity, but it doesn't prove you are talented at flipping heads.

How's this guy going to get paid? One of the financial advisors we talked to during our search got paid through kickbacks from the funds. He had to push high fee funds to feed his own family.

It should be simple to compare the performance of the funds he is pushing to an VFINX (ticker for Vanguard 500) at the morningstar site.

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12154 of 76115
Subject: Re: A meeting with the WISE Date: 7/14/1999 12:43 PM
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WilliamLipp,

Excellent post! Well done and well said, sir.

Regards..Pixy

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Author: gemini1 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12167 of 76115
Subject: Re: A meeting with the WISE Date: 7/14/1999 2:51 PM
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Thanks Wiiliam...
Regarding you reply--- the reason I inquired about the college money is that I have a DRIP for my grandson who is now two ..His parents will most likely NOT be in need of financial aid, however, will keeping the money in his name affect my grandsons chances of receiving loans if he does need them?

Also I agree with you ... I think the Wise man must be getting kickbacks from the funds also. When I told him that 80 % of mutual funds do not beat the S&P , he looked surprised that I knew this and agreed with me, but then said that was only for the last 3 years.

more to follow
thanks again
debbie

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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12171 of 76115
Subject: Re: A meeting with the WISE Date: 7/14/1999 3:23 PM
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Please tell us, if you don't mind, did you pay for the services of this Wise one in this initial meeting? Or was this a "get to know" you meeting?

The estate planning boards seem to imply that "get to know you" introductions are common in that field--before the meter starts running. Is this common with by-the-hour professional planners?

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Author: WilliamLipp Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12172 of 76115
Subject: Re: A meeting with the WISE Date: 7/14/1999 3:48 PM
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gemini1 Date: 7/14/99 2:51 PM Number: 12167
His parents will most likely NOT be in need of financial aid, however, will keeping the money in his name affect my grandsons chances of receiving loans if he does need them?

The truth is that I don't know. But my BS detectors smell an urban legend here. I hear lots of stories about people getting educational loans that are a terrible burden after graduation, but I've never heard a story of someone failing to get an education because the bank said they were too rich for the loan.

When I told him that 80 % of mutual funds do not beat the S&P , he looked surprised that I knew this and agreed with me, but then said that was only for the last 3 years.

Hogwash. The first index funds were created because the vast majority of mutual funds had underperformed the index for the previous decade at that time. I just looked it up (I love the web!) - Vanguard 500 fund was founded August 31, 1976. So I'd look him in the eye and say "What's your source for that? I'm pretty sure most mutual funds underperformed the S&P500 every year for the last 30 years." Then I'd move on to some other advisor. I don't know if he's a lying manipulator or an uninformed buffoon, but I wouldn't need his help either way.

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Author: gemini1 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12174 of 76115
Subject: Re: A meeting with the WISE Date: 7/14/1999 4:02 PM
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Hi....
No I did not pay for his sevices..My sister in law has already bought insurance from him and has not paid him anyhting yet that i know of. He was at her house and she asked me to come over and discuss her moms portfolio with him.

I just found out that after I left, he was impressed with what I did know and told my sisiter in law that if I ever wanted a job with this company he would like to hire me! .
Oh the Wise!


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Author: tonyw44 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12175 of 76115
Subject: Re: A meeting with the WISE Date: 7/14/1999 4:09 PM
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That 80 percent of all mutual funds is really something that needs to be clarified. If it's 80 percent of all large cap domestic mutual funds, then that's one thing. Also, that's not weight averaged, so joe blow's mutual fund with $2 million in assets gets the same weight as a big 10 billion fund.

Regardless, the point is, why settle for the S&P 500 when there are funds out there that beat it? Fine, 80 percent don't, but that means your job is to find the 20 percent that tend to do so.

If you are paying a financial advisor to manage your money for you, then he really ought to find those funds. Otherwise, what the hell are you paying him for? Now, he may not put you in a fund that beats the index year after year, but he should be able to find you a fund that does it more often than not.

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Author: tonyw44 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12176 of 76115
Subject: Re: A meeting with the WISE Date: 7/14/1999 4:11 PM
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I think it would be unethical for people to charge you for an initial consultation to determine whether or not they can help you. If I were in the business of providing financial advice, I'd do initial consultations for free. Also, the more questions asked by the potential client, the happier I'd be. That means they actually care and aren't going to hand their money over to any Joe Blow.

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Author: zgriner Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12189 of 76115
Subject: Re: A meeting with the WISE Date: 7/15/1999 12:57 AM
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He said no one should ever put money in a childs name, since it is more difficult to access grant and loan money for college..
Grant money, yes -- loans, no. I believe that a student is expected to use 80% (I think) of their savings towards tuition. OTOH, parents are expected to use a lot less.

..he belives in load funds over no loads, since he claims that fund managers have access to info about the funds before we do..
Let's say that were true -- so what? It's not like you are going to switch funds on a dime. Anyway, loads are paid to the sales force (ie. the Wise), as a rule, not the managers. And that is on top of the normal fund expenses. Also, there is research that shows that load and no-load funds perform similarly, on average.

..everyone should have their money professionally managed..
How's that for a self-serving statement? A friend of mine is a broker for ML. I asked him how he decided which stocks to recommend to his clients. Did he have a specialty? His answer: None, he merely went with whatever research and recommendations he was given by the company. He's been doing this for 20 years.

gemini1, keep doing what you've been doing.

Zev

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Author: washu Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12238 of 76115
Subject: Re: A meeting with the WISE Date: 7/15/1999 8:38 PM
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<< I just found out that after I left, he was impressed with what I did know and told my sisiter in law that if I ever wanted a job with this company he would like to hire me! . >>

Go for it. See if you can't do that Upton guy one better. (:


Washu! ^O^

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Author: bon414 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12341 of 76115
Subject: Re: A meeting with the WISE Date: 7/19/1999 2:04 PM
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Yes, he says all the things in the right way to take your money. I wouldn't spend any more time with this guy. And what he said about load/no load is a lie. Any article I've ever read says the same thing: the average no load fund does better than the loaded fund any day. But you can look this up in Money Magazine and see for yourself. Anyone who insults your intelligence, isn't someone you want to turn your money over to.

I had a CPA look at my portfolio once. He was quite impressed, but, of course, wanted me to transfer my funds to his loaded funds anyway. (He said I was under no obligation, he just wanted to look at my funds.) Then after he made this nice booklet, etc. I almost felt obligated to transfer something, but I resisted. His secretary called me several times to set up another appointment, but I never did.

Don't get talked into anything. Educate yourself. You're fortunate to have found this website.

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