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Author: meknginear Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75596  
Subject: Retirement Financial Advisor Date: 4/19/2011 12:42 AM
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Has anyone worked with Valic Financial Advisors? In researching them they appear to be a division of AIG and they are recommending Government Backed Mortgages. I am very hesitant to go this way and really do not trust any of hte companies that were involved in the bailouts.

Any other Retirement Financial Advisors that I should be looking at?
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Author: Donna405 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68916 of 75596
Subject: Re: Retirement Financial Advisor Date: 4/19/2011 12:50 AM
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Why are you asking? Will they be administering your company's retirement plan [401(k), etc.)?

Donna (who advises you to stay away from variable annuities, and who also has great qualms about Governmnet Backed Mortgages)

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68918 of 75596
Subject: Re: Retirement Financial Advisor Date: 4/19/2011 2:23 AM
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If Valic is the 'advisor' on your 401(k) investment alternatives, then the friendly man in the showroom of your local Ford dealership is your "Transportation Consultant". These 'advisors' are security salesmen who are compensated based on what they convince you to buy, which may or may not have anything to do with the investments that are in your best interest.

To your question on GNMAs...these are interest rate sensative, and if the economy continues to expand, inflation will continue to rise with interest rates soon to follow. This doesn't mean a GNMA fund, or corporate bond or a high yield junk bond fund should not be part of a diversified portfolio..and if the 'advisor' isn't explaining this to you, you'd be better served to find advice elsewhere.

BruceM

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Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68920 of 75596
Subject: Re: Retirement Financial Advisor Date: 4/19/2011 9:22 AM
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Government-backed mortgages could be GNMAs or Fannie May or Freddie Mac. GNMAs are guaranteed by the government as to timely payment of principal and interest. FNMAs are less closely associated with a government guarantee. Your regular broker can probably provide these if you wish. Usually the interest rate you get is about 0.5% above the US treasury yield, which currently is pretty pitiful. Newly issued ones have potentially a 30-year life. Over the last few years, there has been much incentive to refinance mortgages at a lower rate, and when that was done, investors in GNMAs got their money back early. Now as interest rates will rise, mortgages will be refinanced only when people MUST move. There will be no incentive to refinance.

You can also get GNMA funds. They have no maturity date; as one matures or is paid off, the fund manager buys another at whatever the going rate may be. If you want a GNMA fund, simply buy it from Vanguard. You don't have to pay an advisor for that.

What do you want an advisor to do for you?

Best wishes, Chris

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Author: op456op Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68922 of 75596
Subject: Re: Retirement Financial Advisor Date: 4/19/2011 10:58 PM
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My input:

http://boards.fool.com/1081/was-the-advisory-a-fee-only-your...

This was addressing Kris's question about an insurance investment, but IMHO the same holds true for any investment.

Fee ONLY is really the way to go for financial planning,

http://garrettplanning.com/

Another fee-only organization is NAPFA but I believe are more expensive:

http://www.napfa.org/

However, their website has lots of good information. Here's their FAQ page:

http://www.napfa.org/consumer/faq.asp#FAQ23

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Author: meknginear Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68923 of 75596
Subject: Re: Retirement Financial Advisor Date: 4/20/2011 11:32 AM
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Thank you all for responding and educating me a bit more on this. To add to this discussion, I am helping a relative set up their financials. She suffered an accident a while ago and received a settlement that she needs to put in secure investments. I don't know that I have the time to do the direct investments for her but I definitely want to get her set up. I do not believe that she needs to grow this money agressively, she simply needs to do a little better than inflation and protect it from bad investments and scoundrels. She's met with two companies on her own and one of them was Valic. They simply plopped down their investment strategy which was the government backed mortages and said sign here. No discussion on her needs or objectives so I have several strikes against them right now.

The other company she met with was Ameriprise Financial Services and I liked what they gave her so far, but it looks somewhat expensive. I will do some more research on what you gave me, especially the fee only advisors.

I appreciate all your advise.

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Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68926 of 75596
Subject: Re: Retirement Financial Advisor Date: 4/20/2011 3:35 PM
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Ameriprise Financial Advisors peddle mediocre load funds. They also will sell a computer-generated financial plan for a fancy price. Run!

If you want funds, go with Vanguard, Fidelity or T Rowe Price.

Best wishes, Chris

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68927 of 75596
Subject: Re: Retirement Financial Advisor Date: 4/20/2011 9:18 PM
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As you begin your search, keep in mind the following:

- who ever's services you retain, you ( or in this case, your relative) are going to pay something. If, following your initial meeting, you are unclear on the total cost and exactly what services will be provided, then you probably should shop elsewhere.

- Credentials are important, as they do demonstrate a willingness on the part of the advisor to put in the time and work to at least learn the basics of finance. The most common credentials are the CPA and CFP, with the CFA designation for investments (although the latter might be a bit of overkill for your relative). And this advisor should be registered as an investment advisor (RIA) meaning that they are required to be a fiduciary and meet the interests of their client BEFORE their own. .if the advisor, or their employer, is not an RIA, then it is pure sales, and you (your relative) are on your own.

- Keep in mind that personal finance is more than investments. Household debt, at least a simple estate plan, at least minimal liability and health insurace to protect ones self from catestrophic loss...these are some examples of what each individual needs to think about. Just as your physician thinks of you as a whole person (not just as a case of high blood pressure), so a real financial advisor will think of your relative as more than an investment.

BruceM

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Author: SirTas Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68928 of 75596
Subject: Re: Retirement Financial Advisor Date: 4/20/2011 9:41 PM
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I do not believe that she needs to grow this money agressively, she simply needs to do a little better than inflation and protect it from bad investments and scoundrels.

OK. So she's met with Valic and Ameriprise. That should take care of the scoundrels.

Now, go with a fee-only advisor http://garrettplanning.com/ or simply put this money into a variety of Vanguard funds.

Here's a book you may find useful http://www.amazon.com/Bogleheads-Guide-Retirement-Planning/d...

--SirTas

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