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Morning all. Need some advice, and my brokerage guy has become less than available.

I have a day job (about 83% of total income)and an independent contractor job (17%). Total income high 6 digits. Married. I have the following accounts:

Employer 403b, company #1, actively funding
(2 other 403bs from past jobs, inactive)
Traditional IRA, company #2, actively funding
Roth IRA (company #2, from years ago, used prior to current income level, inactive)
SepIRA, company #3, actively funding (for the independent contractor gig)
Life insurance (variable), company #3

I am beginning to hate company #3, the 'active' brokerage. Company #2 is so easy to use, it is one of the online do-it-yourself deals, I love it. I am very afraid of becoming my own exclusive manager (not that my current broker has done me a lick of good), but I am very busy, over 100hr/wk, and have little time to manage this stuff.

I have played with a nominal sum using the Stock Advisor service, up 7%, or 7x what my current broker has done. Go fool! Still, I am afraid of going totally alone.

How best to consolidate?

Thanks, DS
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There are many thousands if not tens of thousands of people who will be happy to mess with your funds for 2% of the total. You might want to talk with friends in your area. We found an outfit here in Atlanta that works for less than 1% and has done pretty darn good - up 10% from our totals in June 2008.

If is easy to move all your stuff, except the life insurance to one brokerage company. The amount of hand holding and communication you get depends on who you work with. I have tried this with two different big name brokerage houses - not happy with either.

My advice is ask for names of people who have been with the prospective manager for over a couple of years. If they will not provide names and phone numbers, tell them to call back when they have customers who are satisfied.

I am biased here, but the one bunch of people who I would never consider is a brokerage bunch associated with or owned by a bank. So if you are looking at somebody named Robinson Humphrey, check - they might be the brokerage arm of a bank.

Gordon
Atlanta
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You refer to 'broker' as though this is your 'advisor'. Brokers are commissioned salespersons....nothing wrong with this. But using a 'broker' to advise you on investments is not unlike using your local Ford sales rep to be your 'transportation advisor'. Nothing wrong with that either....except that you should expect all of your questions concerning transportation requirements to be couched in terms of Ford products, and never such possible solutions as public transportation, car pooling, etc, as the latter will not improve their income.

With your work schedule and the liklihood that your mind will be embedded in your occupation, you are a good candidate for hiring a real advisor to look after your investment and other personal financial needs. It'll cost you around 1% of your investibles each year, but this is the price you'll have to pay for knowledge, objectivity and independence. In the long run, you'll most likely come out ahead by keeping yourself asset allocated, rebalanced and risk adjusted and by avoiding high-fee funds and financially wasteful products like cash value life insurance.

I'd recommend you go to www.napfa.org to find a Fee-Only CFP, CPA or CFA in your area. Call 3 or 4 and interview at least 2. Make sure you are comfortable with them and their approach to assisting you.

BruceM
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... nominal sum using the Stock Advisor service, up 7%, or 7x what my current broker has done. Go fool!..

While it is too short of a time to be meaningful, an S&P 500 index fund is up by about 7% over the last two months. Many index are up 50% or more over the last year. You need to compare your performance to a comparable index fund to see how you are really doing. If you are investing in mostly small stocks, then the S&P500 is not a fair index to use for comparison.

If anyone could reliably pick over performing stocks then they could easily make an eight figure salary working on Wall Street. When a professional money manager is able to beat comparable index funds by even a percent or two over the long term then they are doing well enough to be on the covers of magazines. It is unrealistic to expect a stock broker to be able to outperform the market over the long term.

Professional advice can be very useful for thing like retirement planning, asset allocation, risk management, or minimizing taxes but expecting superior stock picking is not reasonable.

...How best to consolidate?...

Select about 6 diversified low cost index funds, and move 95% of your money onto these funds unless there would be a large tax problem. Keep the other 5% in an account where you can try your stock picking skills. Add any new money in the same 95/5% proportions. in the future if your stock picking fund is less than 5% of your total portfolio then you know you have not been beating the market.

Greg
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Sorry, company #3 is a full service advisement group, not related to a bank (to my knowledge at least). Not a 'broker' per se. The advisor I have is definitely little more than a salesman, and by no means active.

DS
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I highly concur and recommend a fee only Financial Advisor as Bruce noted in his earlier reply.

I think the Fool has a deal going with Garrett Planning Network for 10% discount for Stock Advisor members.

http://www.garrettplanningnetwork.com/

For one near you:

http://www.garrettplanningnetwork.com/map.html

Expect to pay $4-5K for 3-4 one hour sessions. The discount will pay for your SA subscription, or put money in your pocket.

Remember these fee only advisors are NOT getting any commission from anyone to recommend one stock/MF/ETF over another. They're going to recommend what they, as financial advisors/CPA/CFA, etc, think is best for your situation, age, etc. It is in their own best interest to recommend what is most likely to make you money... or in a downturn to minimize your losses, so you'll return as a repeat customer.

Good Luck!
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Expect to pay $4-5K for 3-4 one hour sessions. The discount will pay for your SA subscription, or put money in your pocket.

Remember these fee only advisors are NOT getting any commission from anyone to recommend one stock/MF/ETF over another. They're going to recommend what they, as financial advisors/CPA/CFA, etc, think is best for your situation, age, etc. It is in their own best interest to recommend what is most likely to make you money... or in a downturn to minimize your losses, so you'll return as a repeat customer.


Money down the drain is all I can say. If you have money to burn or flush, it's better to give it to charity than to financial advisors.
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Money down the drain is all I can say.

Yes and no.

$4k to $5k is a bit much to pay for 3 or 4 hours of consulting. That is a rate in excess of $1000 per hour. $500 per hours sounds like a lot to me, and I think you could find good advice for more like $200 to $300 per hour.

But I disagree that paying for financial advice in and of itself is a waste. There are a number of people who lack the time, the inclination, or the ability to do their own financial planning. For those people, paying for some advice could be a very prudent thing to do, and (assuming the advice is sound) would actually increase their net worth by paying for financial advice.

--Peter
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