Finding a part-time investment advisor

August 26, 2018 8:36 AM

How do I find a financial advisor who doesn't insist on managing investments?

My parents recently retired and finally decided to get their finances in order. They are fortunate to have enough saved to retire comfortably, but the advisors they've met with all want to charge them a (high - 1% or so) percentage of their assets annually, plus their recommendations tend toward actively managed funds and annuities.

I have enough of a background in finance to manage their investments for them in low-cost stock and bond index funds, but I don't have the time to educate myself on stuff like long-term care insurance, tax planning, consolidating different tax-advantaged accounts, when to take social security, etc. I would like to find someone to pay, either by the hour or a one-time fee, who would advise them on this sort of thing. But everyone I've found online, even the fee-only advisors, want to manage their money for them in return for a percentage of assets. I don't think roboadvisrs are a solution either, since they do the stuff I'm already comfortable doing for them.

Do people exist that do what I'm looking for? Or do we need to decide to either go full service or do it all by ourselves? If they do exist, what title should I be searching for?

I should add that neither parent is particularly financially inclined, so having them do it themselves is probably not an option.

Thanks!

posted by btkuhn to Work & Money (7 answers total)

Best answer: Yes, you're looking for a fee-only fiduciary financial planner. My friend does this (though I don't think she's taking on clients right now). She meets with you periodically for a while to get your situation in order. I always thought it was about investments, but she says most of what she does is helping people get the most out of their benefits, making sure their assets are organized and safe and that they've got the right amount of risk.

Here are a couple of professional organizations she belongs to: XY Planning Network, NAPFA.
posted by gideonfrog at 9:24 AM on August 26, 2018 [2 favorites]

Gideonfrog beat me to it...XY Network Could be a really good resource for this. I found this article helpful.
posted by Gusaroo at 9:35 AM on August 26, 2018

even the fee-only advisors, want to manage their money for them in return for a percentage of assets

Those weren't fee-only advisors! See above.
posted by praemunire at 11:01 AM on August 26, 2018 [1 favorite]

To praemunire's point, there are "fee-based" advisors, which are different from "fee-only" advisors. link
posted by misterbrandt at 2:10 PM on August 26, 2018

XY Network's homepage says "XY Planning Network is the leading organization of fee-only financial advisors who specialize in helping members of Gen X and Gen Y." If your parents are recently retired, they might do better with a fee-only fiduciary financial planner who specializes in people their age.
posted by still_wears_a_hat at 2:22 PM on August 26, 2018

Response by poster: Thanks for the responses and resources. To clarify, the advisors they've spoken with were fee-only, but the fee was a percentage of AUM (as I understand it fee-only just means that they don't accept commissions from fund companies for selling products). I think we are looking for 'flat fee' or 'hourly' advisors, and the XY and NAPFA websites both allow searches using this as a filter.
posted by btkuhn at 4:27 PM on August 26, 2018

You're looking in entirely the wrong place.

The hub of services you need are typically and most effectively organized by an elder law / estate planning LAWYER. They do much of the work themselves, and have networks of specialized accountants and insurance brokers that do the rest. Their work is a combination of hourly and flat fee, as is the accountants. The insurance brokers are typically paid on commission and that's why the lawyer gate-keeps it: the insurance broker only sells the insurance that the lawyer wants the clients to buy.
posted by MattD at 9:47 PM on August 26, 2018 [1 favorite]