I can buy bonds from my Etrade account. If I stick with companies that
are in the S&P 500 and A or better ratings, I lower my risk of
default. Bonds are usually better than bond funds if you keep the bond
until expiration. Take a CLOSE look at the early payoff provisions, as
interests go down they pay the bond off and you have to go out and buy
a new one at lower rates.

"TooTall" <TooTall[at]TooTall.com> wrote in message news:<1047ourrtijkdd6[at]corp.supernews.com> ...
- quote -

For stocks you don't need a manager. Just buy index funds such as S & P 500
and Total Market from Vanguard and you'll do better than the majority of
managers. For bonds, that's a little different.



"Michael Grinnell" <msgrinnell[at]charter.net> wrote in message
news:237a8ae7.0401051322.6c48e5eb[at]posting.google.com...
- quote -

If one is paying an advisor, one would assume that the person thinks
the advice the advisor is providing is good. If one is not willing to
follow that advice, I suppose it is just one more example of poor
spending habits. It's kind of like paying for a health club where one
never works out. Just a psycholological palliative.


"Brent D. Gardner, ChFC" <bgardner20[at]cox.net> wrote in message news:<r20Lb.8896$zf.6475[at]okepread05> ...
- quote -

"Michael Grinnell" <msgrinnell[at]charter.net> wrote in message
news:237a8ae7.0401051322.6c48e5eb[at]posting.google.com...
- quote -

Mike,

If one takes a counter-intuitive approach, perhaps a more legitimate
question is "Will I make a Good Client for a financial advisor?"

Some people don't make good clients, and those of us who have been around a
while (READ: Know what we are doing), have the ability to dismiss bad
clients. We pick and choose who we have as clients, and can afford to live
without the bad ones. I fire clients from time to time, if my radar didn't
catch a bad one and they slipped past my initial interview.

I tried to post this, but the moderators aren't willing to read an article,
so I'll post a link:

http://www.bachrachvbs.com/yourchoice.php

I'm not a shill for Bill Bachrach, and I don't always agree with him, but
he's right about the different kinds of clients.

Since I'm in this business, I know that I don't want to be anything other
than a Good Client for the advisors I choose to reward my business with. I
know that if I follow through as a client, they are going to treat me
better, so I choose to be a Good Client. The BEST VALUE in any business is
derived from mutually beneficial relationships (a rising tide lifts all
boats), as opposed to the last two types of clients who use people and try
to get something for free. They are the dregs of society, and no
professional wants them.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

"Michael Grinnell" <msgrinnell[at]charter.net> wrote in message
news:237a8ae7.0401060816.3df8f7ed[at]posting.google.com...

| Here are the questions: is word of mouth the best way to find a money
| manager or is there a certifying agency where I can check both
| credentials and things like complaints? How much should one expect to
| pay for services and what sorts of services can be expected for how
| much?
|
| Thanks a ton,
| Mike
|

I am aware of this company who is supposedly a third-party analyzer of money
managers: http://www.profutures.com/. However, I have never done business
with them. Is/Does anyone else aware of/have experience with them?

Michael

"Caroline" <caroline10027remove[at]earthlink.net> wrote in message
news:f1HKb.23462$lo3.5960[at]newsread2.news.pas.earthlink.net...
- quote -

Thomas Stanley, William Danko, Russell Alan Prince, et al., have studied the
same groups, and their conclusions match mine. Mine is based solely upon
experience and observation. A lot of professionals make high incomes, but
few have high net worths. This isn't a guess -- its irrefutable FACT. A lot
of millionaires make average incomes. I have hundreds of them as clients.

Doctors, lawyers...and financial service professionals, including CPAs,
insurance agents, investment brokers. If you want to find the proof, feel
free to spend the next 15 years, because it takes that long to see reality
as I've seen it, and as I continue to see it every day.

- quote -

Amateurs, armchair advisors, undereducated pundits, lay authors who can
barely spell, as well as plenty of those who have lots of education, but
were't blessed with the uncommon sense, much less wisdom, to employ their
education effectively. The world is full of unrewarded brilliance, yet most
of the wealthy aren't that smart.

- quote -

I'm not saying anything you are, that much is obvious. Go back and re-read
my post. It's easy to understand. I suggest you do not skip a single word.

- quote -

The overwhelming majority, to the point of being unbelievable, but I see it
every day, so I'm a believer. Most people barely get by, make horrible
mistakes, repeatedly, and do so using third-parties for advice (Money,
Kiplingers, Forbes, Motley Morons, etc.)

- quote -

I have proof. It's in 16 four drawer file cabinets. Nearly 13,000 client
files, and many more who were examined, but not retained (some didn't buy,
some I reject, some I fired later). Your assertion had no merit whatsoever.
I'm just pointing this out. You don't have to accept the truth, but you
can't change it.

- quote -

That's pure, unadulterated horse manure. Advisors don't make clients rich.
That's a myth. Advisors protect what people build on their own from risks
the average person simly cannot forsee, and often doesn't do anything to
protect, until it is too late.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

"Brent D. Gardner, ChFC" <bgardner20[at]cox.net> wrote
- quote -

How does this prove your claim that "[M]ost of those that slam advisors are late
on their housepayments, and are Under Accumulators of Wealth"?

You're criticizing the amateurs who slam advisors, right? You're saying the
amateurs are slobs with their own (metaphorical and actual) houses?

This is what I wanted a citation for.

Or are you saying a guy whose financial house is in disorder and who shows up at
your doorstep was previously slamming advisors?? If so, how do you know? Just
because he wasn't using one before?

I mean, do you seriously think everyone who doesn't use a financial advisor has
their financial affairs in disorder?

- quote -

Unless you have proof that those with advisors fare much better than those with
advisors, adjusting for initial income levels, I don't see how this disproves my
assertion.

In other words, it seems to me that the advisors who make their clients really
rich is about equal to the number of advisors who dishonestly and unethically
bilk their clients.

Hopefully this will be my last post in this thread...

"Caroline" <caroline10027remove[at]earthlink.net> wrote in message
news:dPFKb.23326$lo3.6958[at]newsread2.news.pas.earthlink.net...
- quote -

Absolutely. I keep detailed records of every interview, including the
financials of other advisors. When I meet with a high income / high net
worth prospect, I give them my financial statement. Why? Because I'm going
to ask for their financial statements. I also ask for the same thing of any
other advisors, if they wish to participate. If someone doesn't have their
house in order, they shouldn't be giving financial advice. Some won't share,
and get dismissed.

A lot of information about those who won't share is public, such as
bankruptcies. I've had my assistant pull these records when a CPA made a big
stink. I can tell when someone has something to hide, by virtue of thousands
of interviews asking questions that most advisors are afraid to ask. This
guy had something to hide. Upon examination, his track record was not
impressive, and indicative of poor personal decisions. He was dismissed. I
replaced him with people I know and trust, who are the best in their
respective crafts, in my area.

- quote -

Incorrect. The number who steal is exceedingly small. Most who steal do not
have any licenses at all, which is why I can say with great confidence that
state regulation and enforcement is vastly superior to federal regulation
(SEC) and self-regulatory organizations (NASD, NYSE). Public records
substantiate this, emphatically.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

Michael Grinnell wrote:
- quote -

I think the best first-cut is to ask friends, your accountant, your
lawyer, people you work with. Not everyone gets paid advice but surely
you know people who can make referrals. It's best of course if they're
similar to you, so you know the questions faced are similar (age,
kids/not, etc.)

You might pay hourly fees, fees based on a percentage of the assets
under management, or commissions - or a combination of these. The cost
varies a lot so it's hard to generalize. It really depends on what type
of business you're talking about and what type of advice you're getting.

Similarly, the credentials to look for really depend on what you want
done. If it's primarily estate planning, that's lawyer work. If tax
planning, a CPA might be your best bet. If it's investment review &
selection there's a whole range of options.

From your last post it sounds like a fee-based financial planner might
do the trick; you already have a broad mix of mutual funds & savings
programs, and just want a review of those. You can read up on planners
at www.fpanet.org, though that site will focus only on those with the
CFP credential. That's not your only option, but absent a referral this
is a quick way to find some firms in your area.

-Tad

"Brent D. Gardner, ChFC" <bgardner20[at]cox.net> wrote
- quote -

Do you have a citation for this claim?

It seems to me that people who slam advisors (mutual fund managers excepted)
couldn't possibly do so and sound intelligent without having some expertise in
investing and long-term financial planning. This expertise translates to paying
off home mortgages and other debt in a timely fashion and accumulating wealth
commensurate, from what I can tell, with anyone who is using an advisor.

Not to mention the folks who hire an advisor who, despite a license, is inept or
crooked and so bilks them of their fortunes. Such experiences seem to balance
out claims of people becoming enriched because they have a 'good advisor.'

"Harry McGuffin" <h.mcguffin[at]comcast.net> wrote in message
newsZpKb.754858$Tr4.2127830[at]attbi_s03...
- quote -

Did you have more time to do the things you want?

Did you have more time to spend with the people you love?

Did you sleep at night? =)

Are your taxes lower than when you did it yourself?

Are your assets covered by the appropriate protection vehicles?

Are your personal goals better defined?

Most people, pundits, and armchair advisors, talk about returns, usually
relative to some unmanaged index. Nothing wrong with that, except when that
is the only criteria. Remember, most of those that slam advisors are late on
their housepayments, and are Under Accumulators of Wealth.

While I do set up portfolios for many of my clients, it isn't my favorite
thing to do. I hire third-party money managers for most of them, especially
the larger ones that qualify. Among those I choose to place business with,
most have target returns, relative to the current "risk free rate," such as
T-bills. If they beat their target returns, they are doing their job. Over
time, most of them do much better than their target rate, and when I look at
their year by year returns during 2000-2002, I'm so glad I handed this ball
off to a better runner than myself.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

Here is my take on Money Managemnt alternatives:

Manager Investments Type Expected Return

Myself Mutual Funds Index Market
Myself Mutual Funds Managed Market + 2%
Manager Stocks Managed Market + 4%

I use a Newsletter to help me select managed funds. When I use a
Money Manager it is for Stocks.

Frank



msgrinnell[at]charter.net (Michael Grinnell) wrote in message news:<237a8ae7.0401051322.6c48e5eb[at]posting.google.com> ...
- quote -

- quote -

Thank you all for your ideas and opinions. Currently, I am close to
maxing out both my and wife's Roth IRA and 403b. Once my wife starts
working in several years we will be beyond maxing out the two at which
time tax questions become much more interesting. I mentioned my
father above and he seemed to be quite happy with his money manager.
He spent 38 years practicing trial law and he practically negotiates
at McDonalds for fries so I doubt he ever knowingly over-paid for
anyone's services. He has talked about things like laddered bonds,
etc., that leave me in the dark. I did an MBA and MS, but both were
information systems and computer-related. I have just enough finance
to probably make me dangerous. I have my IRA and 403b contributions
spread among about 7 funds now: large value, SP index, intl, small
growth, intermediate bond, agressive growth, and large growth. As I
accumulate more, I will add mid- growth and value and small value
along with a high-yield and high-quality bond and maybe a REIT. Once
per year I balance the holdings. I read a good article about the
Four-corners strategy a number of years ago and I have been trying to
follow a modified approach to that. I believe the highest fee I am
paying is 1.03% which is not difficult since both my IRA and 403b are
at Fidelity.

Here are the questions: is word of mouth the best way to find a money
manager or is there a certifying agency where I can check both
credentials and things like complaints? How much should one expect to
pay for services and what sorts of services can be expected for how
much?

Thanks a ton,
Mike

Well, OK. Now, after I hire a money manager how can I fairly evaluate his
performance?

"Brent D. Gardner, ChFC" <bgardner20[at]cox.net> wrote in message
news:iDmKb.4735$zf.1991[at]okepread05...
- quote -

Michael Grinnell wrote:
- quote -

It depends of course on what the MM does - could be anything from
picking stocks to picking funds to advising you on overall personal
finance issues. In a sense you hire a MM every time you buy a mutual fund.

Assuming the services are more comprehensive...the main advantage is
that it relieves you of the task of keeping up with changes in tax law
or the investing environment (mostly the tax law really, but the latter
is an issue too). This is a very valuable benefit for people who want to
spend time on other things, and those who might not have an interest in
or knack for the topic.

On the flip side, you pay for it, and that's money out of your pocket;
there needs to be a net benefit to justify the arrangement. There's also
the issue that you'll need to evaluate a manager's ability to
evaluate/oversee investments, which can be as difficult as evaluating
investments on your own!

I don't think there's a such thing as a line that you cross, and beyond
it you need professional help. There are topics that that are too
complicated to figure out efficiently on your own - not that you can't
do it, but it's a waste of your time vs. just paying an expert. These to
me are more legal-tax types of questions than money-management questions
though...the investment questions are fairly accessible to anyone doing
a diligent study of the topic, and require less "upkeep". But if you
have a lot of wealth in a business you own, for example, IMO it's better
to seek help than figure out the alternatives and potential problems.
Ditto if your estate is anywhere near the level of triggering tax. If
your investments are concentrated somehow, that's an issue. These are
just examples.

There's always the option of having someone give a look-see...you don't
need to go the route of full-time money management.

-Tad

"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:050120041738592751%john[at]johnweeks.com...
- quote -

I disagree with 100% of this post.

The free hand of the marketplace decides what fees are appropriate. This is
the way it should be. If fees were too high, people will shop around. If
they are too low, they wonder why their advisor is out of business.

More than half of mutual funds are sold via the advisor channel, with a
sales charge, with the bulk being mid-level sales charge funds (sales
charges are limited by the law, so there are exactly ZERO with excessive
sales charges). Of total fund sales, well over four-fifths are under the
direction of a third party, be it a registered representative or registered
investment advisor.

Since some contractual plans have outperformed No Help index funds, despite
the maximum sales and creation charge allowed by law, the toll to get in
isn't the sole determining factor of long term results.

Churning is exceedingly rare, as NASD enforcement statistics indicate. Of
those they accuse, even fewer are actually churning solely for personal
gain.

The oldest private wealth manager in the United States, which few people can
even name, charges an average of 0.67% on their entire book of business
(read: BILLIONS), many of whom you would recognize (including the most
powerful man in the world). It takes around $5,000,000 just to get an
appointment, and they refuse plenty of people. On the other hand, American
Funds, the largest fund company that focuses primarly on the advisor
channel, has a flagship fund with a management fee of 0.59% to 1.45%, and
you can get in the door with $250. I have this mountain chart on my wall
comparing ICA to the unmanaged index -- NOBODY ever argues that passive is
the ONLY solution, because it clearly is not. Even the die hards indexers
from the 1990s have changed their mind and are using active management, more
and more.

"Somebody has to pay something to someone, someday." -- Burt Meisel, CLU

TANSTAAFL

"Last year DALBAR reported the results of a study showing that for the years
from 1984 through 2002 the S&P 500 averaged an annual return of 12.22%,
while the average investor earned 2.57%. How could investors generate
passbook savings returns during the greatest bull market period in history?
The main reasons investors earn lousy returns and continue to make the same
mistakes over and over again are a lack of understanding about the realities
of risk, and even when they do understand, their decisions are usually
driven by their heart instead of their head." -- Jack Marrion

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

"Michael Grinnell" <msgrinnell[at]charter.net> wrote in message
news:237a8ae7.0401051322.6c48e5eb[at]posting.google.com...
- quote -

Mike,

There really isn't any rule for this, everything is going to be based on
opinion, although some of us, by observation, have perhaps opinions based on
OJT that others might not have.

Taxes are getting more complicated, not less. I work with CPAs and tax
layers all day, and they can't remember everything, much less know
everything, about every code.

Investments, and the risks associated with them, is more complex than most
thought, as the mutual fund scandals have shown.

Even relatively boring things like a fixed annuity or general account life
insurance policy (whole life, universal life), is fairly complex. Variable
Universal Life (VUL)? VERY complicated, and experts on them are relatively
rare, even though plenty gets sold.

A lot of people make financial decisons based on erroneous information,
including urban legend and mythology. Some of the misinformation comes from
some allegedly reliable sources.

I work with a fairly diverse clientele. While some are very young, and some
are very old, some super wealthy, and some just getting by, the majority are
what I call "delegators" -- people who could probably do what I do, without
much difficulty, but they don't have the time, or have other things they'd
rather do. Some are pretty active in their planning, others just want the
bottom line every so often, with a heads up if they need to make a change.
Everyone is different.

One of my favorite quotes fits this discussion:

"Building a deck is NOT as hard as you think! I've watched TV personality
Bob Vila do it many times, and he is a regular 'do-it-yourselfer' just like
you, except that he has knowledge, skill, an unlimited budget and a large
staff of experts." - Dave Barry

Having someone do something for you is going to have a cost, although the
cost may be offset by tax savings, or premium savings, or potentialy higher
returns. I've examined more finacial situations that most of my peers, by
virtue of being second generation in this business, and having a large
client base. I haven't found ANYONE that had everything in order. In fact,
most of my clients don't. Financial planning, estate planning, business
continuation/succession planning, etc. are all a work in progress.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

In article <237a8ae7.0401051322.6c48e5eb[at]posting.google.com> , Michael
Grinnell <msgrinnell[at]charter.net> wrote:

- quote -

The typical everyday person has no need to pay a money manager.
All you need to do is fund your retirement options, and look for
low cost no-load index funds. Most pros simply charge high fees,
put you into high-cost high-load funds, and churn your account,
and then make excuses when your performance is sub-par. No
one cares as much about your money as you do, and no one knows how
hard it was to earn that money other than yourself, so don't turn
it over to someone who wouldn't have a second thought about sucking
your account dry.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

List,

My father has always used a professional money manager to handle his
investments. So far I have done everything myself but am perhaps
feeling a little insecure. What, in the the view of the list, are the
pros and cons of having a professional money manager and is there some
time at which the consideration of having such a manager becomes
essential or at least much more important?

Thanks,
Mike