Financial adviser?

December 31, 2021 12:01 PM

My spouse and I are considering getting a financial adviser. We make about $100,000 a year and have about $25,000 in savings. Can you recommend for or against any fee-only financial advisers that either work in New Mexico or will work us over a distance? Also, do you have any advice on choosing such an adviser?
posted by furtheryet to Work & Money (8 answers total)

I can't give you local advice or a specific person but stick with NAPFA since they aren't handling sales, check Broker Check, read the fee tables and form ADVs carefully (prices and other gotchas), be mindful of the minimums for what they will help with (some are 2M+), and know that most of them will tell you to pay off your non-mortgage debts (rates are too low to care) before investing. Once you find someone they may offer to manage your money too, which can be expensive, so get an idea of what you want - just a consult or more.

As far as finding one, I looked for one who seemed to match our needs (they are aimed at different social classes, sexes, etc.), but don't be afraid to call them up and see how successful they say they are. Education and how long they've been doing it are important too, but know it can harm you too (ex. DeFi).

Creating a spreadsheet of our assets and liabilities was the best thing I ever did. We were far better off than I felt.
posted by jwells at 12:28 PM on December 31, 2021 [1 favorite]

Sent you a memail!
posted by stellaluna at 1:47 PM on December 31, 2021

Best answer: Also, do you have any advice on choosing such an adviser?

Yes. Don't. At $25K in savings, pretty much any fee will substantially impact the returns you might receive. If you, for instance, pay a financial advisor $1000 for four hours of work, then a (notional) 10% return for the next year (in line with historical averages) becomes 6% after-fees from the advisor. I'll also note most financial advisors will charge more than that.

Unless you have some sort of very complicated financial situation (which you are not suggesting), I'm not sure what the financial advisor would suggest other than following a fairly straightforward progression from paying down high interest debt, to using tax-advantaged savings accounts, to using taxable accounts. Further, the vast majority of people are well-targeted to a Bogleheads three-fund portfolio, which can be implemented trivially in tax-advantaged accounts with Vanguard Target Date retirement funds.

There are quite a few resources online for getting control of your finances - including Ask MetaFilter! At your net worth, a financial advisor would simply waste your money and tell you what you can already find online.
posted by saeculorum at 1:52 PM on December 31, 2021 [22 favorites]

I agree that NAPFA is a great place to start if you want to find an advisor.

Depending on what your questions are, answers may be very DIY-able instead. E.g., is your main question about where to put your $25K (and additional upcoming savings)? If so, the right approach should really be simple enough that you don't need an advisor yet. You could ask that on the Bogleheads forum and get almost all straightforward, rational advice. It's not the kind of place where they'll tell you to put it in crypto or some meme stock or something. The worthwhile possibilities are all simple, and similar enough that you can't go too far wrong.

They've also recommended particular advisors for those who want them, such as in this thread. I'd expect the ones mentioned there would be able to work with you remotely.

One mentioned there is Jon Luskin, who I've spoken with myself. He does work remotely. I thought he was great, and if I were going to hire an advisor, I think he'd be great. But again, if the advice you need is simply where to put your $, I'd suggest getting that answer for free for now. It may start off intimidating, but it doesn't stay that way if you keep it simple -- which is best anyway.

[Editing upon failure to preview: Yes, saeculorum has it!]
posted by daisyace at 1:54 PM on December 31, 2021 [1 favorite]

The only reason I can think of that you should get an advisor rather than pursuing saeculorum's strategy is if you are approaching retirement and need to start thinking about things like Medicaid.
posted by praemunire at 2:15 PM on December 31, 2021 [1 favorite]

What do you want advice about? If just investment then I agree with others that you do not have enough money invested to justify the cost of the advice (and even then, the conventional wisdom is a reasonable thing to do and available for free on bogleheads and the personal finance Reddit).

But there’s a ton more to “finance” than “index funds are good” and it’s reasonable to value professional advice with that in mind. If you want advice on more complex issues (household budgeting, debt, estate planning, insurance, tax planning, house purchase, etc.) a one off review with a fee only planner could be money well spent. I don’t regret mine, which cost me about $1000 five years ago and took maybe 3-4 hour long calls. My guy is now much more expensive so I’m reluctant to refer you to him, but it sounds like you’re getting some good recommendations.
posted by caek at 2:36 PM on December 31, 2021 [2 favorites]

Vanguard, and I assume Fidelity and other major low cost brokers also all have robo-advisors now that will optimize your investment plan based on the inputs you provide about goals, etc. I think Vanguard charges .3% of assets under management.

Vanguard also has Lifestyle Funds that are built based upon your time horizon and savings goals. You could do much, much worse than simply picking the one that matches your situation and leaving the money there.
posted by COD at 7:40 AM on January 1, 2022 [1 favorite]

I don't have a name for you, but I just want to validate your desire to speak to someone. Even though it's true that a lot of the things (everything?) this person will tell you will be info that can be found "online for free", in my experience, the act of hiring someone to tell you specifically to do those things is very powerful. Most expert advice across specialties - nutrition, personal training, education courses, even medicine, etc etc etc - is available freely on the internet, but having someone speaking directly to you is almost always worth the money, in my experience - provided you're ready to listen! Good luck!
posted by monster_a at 9:51 AM on January 1, 2022 [4 favorites]