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My parents are recently retired and they have been using a financial planner to manage their lump sums. I've been helping them learn more about it so they can help to make the best decisions. What questions should I have them ask at their yearly meeting with the advisor next week about how he is choosing what they are invested in?
I'm hoping to ween them off the advisor and manage it themselves but I think it may take several steps over a period of time. Any articles that would help point out recommended distributions would be highly appreciated.
Thanks in advance!
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No. of Recommendations: 2
My parents are recently retired and they have been using a financial planner to manage their lump sums. I've been helping them learn more about it so they can help to make the best decisions. What questions should I have them ask at their yearly meeting with the advisor next week about how he is choosing what they are invested in?
I'm hoping to ween them off the advisor and manage it themselves but I think it may take several steps over a period of time. Any articles that would help point out recommended distributions would be highly appreciated.
Thanks in advance!


Tread lightly!

My parents were talked into buying junk bonds many years ago. Remember the junk bond crash, what was that, late 80's early 90's? My parents lost 25-40% of there investments overnight. I, being the good son that I am, wanted to "set them straight".

I can still remember hearing my Mom over the phone in the background, telling my Father 'It's your son again' in a tone of voice that was... less than appreciative of my help. I stopped offering my financial advice to them after that. I felt I was meddling in a area that I was unwelcome. It would be better to offer to help without giving them advice.
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Much depends on whether your parents have major pension or other income or whether they are dependent on their savings for investment income. And how essential this investment income is to their retirement. Are the investment secure or relatively risky?

A second question is how do the investments perform compared to their respective indexes such as the S&P 500.

A third question is what are the expenses: loads, mangement fees, etc being paid for these investments.

If the investments are performing well and your financial planner is a fee only service provider, you may be best off to leave well enough alone. More commonly you will find that they are paying high fees and loads for mediocre performance. Then there are things you can do to improve.

Fooldom has many sources of information in this area including books. But begin with Fool School from the fool.com home page for ideas on what to look for as you look over your parents investment records.

Best of luck to you.
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Good advice pauleckler. One more thing. You can get good advice from a planner. Some people need this help. If all is well leave it alone.
Robbdoe
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