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Author: blkmagwom Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Financial Planner Advice (long) Date: 10/23/2003 6:49 PM
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(cross-posted to Index Funds Board)

I need some advice and if I need to post this on another board, please let me know. I decided to speak to a financial advisor about my general financial state, my retirement investments to see what kind of professional advice he could offer. The financial planning firm is advertised as holistic financial planners and professional investment managers. This is a fee service and not based on commission. It was my understanding (and in the contract I signed) that the fee would be no more than $350 and I would get a report. My questions to the board are at the end of this post.

About me: I am 34 years old. Generally speaking, I have some financial inclinations and I know my way around Excel. I do my own taxes and have done so for a long time. The kind of report I was expecting would be a detailed analysis of my financial situation (including taxes and life insurance issues) with figures and tables. What I received was a 6-page report (3-4 pages of which were a re-stating of stuff like my risk tolerance, investment objectives). The meat of the report was a one-page portfolio recommendation (which I list below) and a 2-page commentary on general issues. Generally, he recommended:

a) That I get a Roth IRA with 55% Vanguard Total Stock Market Index Fund and 45% Total Bond Index.

b) That I have 6 months salary in savings (which I do)

c) I have a mortgage (@5.2%) and a HELOC (@ prime). He recommended that the mortgage be the one where additional $$ are applied, not the HELOC since the mortgage has a higher % rate.

d) That short term debt be paid off (I have no credit card debt)– and in this category of short term he included my student loans of $12K which are at 3.2%.

Here is the breakdown of the asset allocation that were recommended for my retirement:

Investment Grade Bonds – 20%
U.S. Government – 15%
High Yield (Junk) Bonds – 5%
Large Cap Equity – 30%
Mid Cap Equity – 10%
Small Cap Equity – 10%
International – 5%
Cash – 5%

Here is what I currently have in my account:

29% - Bond
28% - Small Cap
22% - Large Cap
20% - Blended (which is 82% stock, 18% bonds)

Questions:

a) Should I talk to my financial planner about getting a more detailed analysis?
b) Is the above a satisfactory product for what I'm paying?
c) Should I from now on do my own research and planning?
d) Any comments about the above advice?

-b-
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