Well, I keep learning. Two years ago we hired a fee only financial "advisor". Fee only is supposed to be good since they are not tempted to make a commission on 'unsuitable' investments for your age, incomes, risk tolerance, etc.
He was an older man and he was charming and thoughtful. No, said, he, he did not like annuities because of the high fees, etc. His stock picking was better than index funds because (something about...well, I forget what).
Our daughter pushed hiring this man since she had been helping us with our investments and was not comfortable managing our money going forward. He seemed better than others we had read about on line.
That was then. We knew he was selling his business to two younger guys he was really impressed with after vetting untold offers. He would remain on as some kind of ex officia advisor for sometime. Meanwhile he would spend more time in his multi million dollar Florida home.
We hired him. The stock picks were all blue chip, household names, spinning off dividends. The dividends paid for the advisor fees. The stock choices stayed steady as blue chips do. In two years, there were no more purchases, sales, trades etc. The account stayed moribund, except for the advisor fees and dividends that paid for them. The balance stayed the same. Worse, there was cash in the account JUST SITTING THERE, ignored. Then there was a half hearted purchase by the new owners of a few shares on Nike.
I couldn't stand it any more. Plus advisor fees are no longer deductible on federal income tax. My prediction...A lot of "advisors" are going to be looking for another job or trying to justify their high fees and personalized "service".
I wanted out. Oddly, I had a hard timed severing the relationship. Maybe it felt like going backward. Maybe it was the feeling we were going back to the no man's land of index funds. Coward that I am, I called the advisor's offices over the weekend and left messages in each VM. We wanted to sever the relation ship. No reason given.
Then I got a phone call from one of the offices , asking me to fill out a form. Whew. No questions asked. I didn't need to justify this decision and get a smooth rebuttal. They sent me a check for the unspent advisor fees. I then transferred the advisor's stocks to another account in the same financial platform. And there the stock picks of our former advisor sit. At least we no longer pay fees.
Live and learn as they say.
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