[NextTimeAround]

My brokerage assigned to me a relationship manager (RM). I guess that's what she is.

Even though I am not rich, I know I am in a more comfortable place than most. My husband works full time and is 10 years younger than I am. I don't pull a paycheck although I collect rent in another country. A former employer sent my 401k to my brokerage so I can see it with the rest.

It's one of those Year funds, estimating one's year of retirement based on age. Well, it's worth the same as is it was last year when the change was made. I felt like I was pulling teeth trying to get the personnel to send over the prospectuses for the funds in it.

The RM said she could advise me what securities would be good for me if 1) she could see what my husband holds and 2) what our goals are. she didn't enumerate what goals she could help me with or whether we have children or parents who need support. So I told her, the only goal I have is to make as much money as possible.

For those of you who have dealt with wealth managers or any other kind retail RM, what was your experience?

 

[Married but Happy]

The quality and focus of a RM will depend a lot on the company they work for, and also on that reputation. Some can be very helpful, or at least make sure you've considered a variety of alternatives; including being sure you have life insurance (maybe not needed) and disability insurance (sometimes a very good idea). Just be wary if they try to sell you an annuity - those are usually a poor investment. Maybe the most important factor is your time frame until you retire, and next is your risk tolerance. I've worked with a couple (one through my former 401k company, and another couple through my brokerage/IRA company), and they've been helpful overall. The more you know, the better use you can make of their advice, and the better able you will be to evaluate it.

 

[Diceplayer]

You lost me when you said that the RM was assigned to you. How does that work? An RM is suppose to work for you so you should be the one to hire them. I started out investing on my own, then later went with a financial advisor that was recommended to me by a friend. It became obvious after a while that she was working for her own commissions and didn't give a rat's butt about me. I dumped her and have since found a new advisor who is great. Works for me and has my best interest at heart. You need to be comfortable with a financial advisor. You and your husband should interview others and find someone who is a good fit for you. Yes, interview them like they were going to work for you because they are.

Also, just my opinion, but those year funds are crap. An investment strategy should be based on your overall situation and tolerance for risk, not just based on a retirement year.

 

[CharlieParker]

I work with (as in pay) an independent fiduciary CFP (certified financial planner). They don't sell securities, just advice. "What securities would be good for me" is really just a small portion what they do for me, they are way bigger picture than that.

They look at what we have (net worth, RM's point 1) what we likely will spend (goals, plus I have no clue how to budget for heath care), income (investment and from other sources, including from working for X years) and how much you potentially want to leave the kids amongst other things. Their software will model it out and show how things will look with different parameters and if your goal are realistic. Some questions I asked were am I unemployed or retired, is a new Ferrari possible every couple of years, how much house makes sense with what carrying costs and what if the market tanks.

 

[Hiner112]

If you have enough that you have to worry about required minimum distributions (RMD) causing significant tax problems, balancing when you will take social security and how you distribute / pull from your retirement accounts, or estate taxes eating up the money you wanted to bequeath a certified financial planner (CFP) would be useful. It shouldn't be someone assigned to you though. If you are just investing for retirement, something like 60% total domestic stock market, 30% total international stock market, and 10% bonds gradually transitioning to something like 60/40 stocks and bonds as you get closer to retirement would approximate the target date funds and might save you some expenses. One of the biggest predictors of investing outcome is the less you spend on the broker, the better you do.

 

[Married but Happy]

NOTE: A Relationship Manager is NOT the same thing as a financial planner or investment adviser. The RM works for the brokerage company, which is why the RM was assigned to the OP. They want to keep the client informed and happy with their services. She did not hire an independent adviser. If her brokerage company is reputable they will provide decent overall financial advice and general guidelines and strategies, but probably NOT provide specific investment purchase/sale advice.

 

[DallasCowboyFan]

I am in that business and if the goal is retirement, I want to get as much info as possible about the retirement assets of the couple, spending goals for retirement, social security estimates and other sources of retirement income so I can help put together a plan. But, I know what someone means when they say they want to make as much as they can and if I already have the account, I can begin this process before having all the data I need for a pla. The chicken doesn't have to come before the egg. They work for you and you are their client.

 

[DallasCowboyFan]

I work with (as in pay) an independent fiduciary CFP (certified financial planner). They don't sell securities, just advice. "What securities would be good for me" is really just a small portion what they do for me, they are way bigger picture than that.

They look at what we have (net worth, RM's point 1) what we likely will spend (goals, plus I have no clue how to budget for heath care), income (investment and from other sources, including from working for X years) and how much you potentially want to leave the kids amongst other things. Their software will model it out and show how things will look with different parameters and if your goal are realistic. Some questions I asked were am I unemployed or retired, is a new Ferrari possible every couple of years, how much house makes sense with what carrying costs and what if the market tanks.

Some CFPs do manage securities. I hold that certification as well. It depends on the licenses they hold.

 

[CharlieParker]

Some CFPs do manage securities. I hold that certification as well. It depends on the licenses they hold.

I was trying politely to say, unlike it sounds in OP’s case, my guys are independent of the products/companies they invest my money in/with.

What do mean by you manage securities? Truly just interested.

 

[DallasCowboyFan]

I was trying politely to say, unlike it sounds in OP’s case, my guys are independent of the products/companies they invest my money in/with.

What do mean by you manage securities? Truly just interested.

Managing securities would generally mean working with a fee based account rather than a commission based account. The advisor monitors it to keep it balanced and to keep it in appropriate securities based on market movement, the economy, the direction of likely interest rate movement, sector movement, changes in the clients needs, risk tolerance or life stage, etc. It can also be done with commission based accounts but with fee based accounts, there are no fees for changes so the client will benefit from lower costs when changes are needed but may pay more in the long run, depending upon frequency of changes are needed. Clients in commission based accounts often do not want to make needed changes to avoid commissions and using a fee based approach eliminates the commission consideration. Holding onto overpriced or stale securities to avoid commissions hurts the client's performance. I do not work with any proprietary funds and give my clients a choice - commissions or fee based. I do not charge for planning, but make money from investing. The accounts must perform at a level that justifies the fees. I realize this. Managing an account does not mean changing things without consent - I get on the phone when changes are needed. Fee based accounts charge a percentage of total assets per year such as 1.2% to 2% depending on the firm. Commissions are higher. I am very proactive in attempting to meet client needs. I don't wait for feedback, but ask for it. When I do a good job for clients, they tell others and business grows.

 

[CharlieParker]

Thanks for the detailed explanation @DallasCowboyFan.

 

[Texican]

NTA, you have been given some good advice above.
Recommend you read up for yourself on investing and preparing for retirement.
Recommend the following 3 X forums list below.
We use Vanguard and have Index funds - 3 funds and cash.
You can learn for yourself and the be able to decide if you want a Financial Advisor or to pay a firm to actively manage your portfolio.
We had a firm managing our money when we first started - but we took over and manage our portfolio ourselves now. You do pay a fee for having someone to manage your portfolio for you.
As I said, these two forums have lots of good information and the folks are very willing to offer advice if you post a question.
All the best in your endeavors.
gamboolman....

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[Manner1067]

I have a wealth manager with one firm, and a brokerage account with another. Most people no NOT need a wealth manager or financial advisor.

When do you need one?

1. When you have a large amount of assets and require access to specialized products and tax planning.
2. When you need help administering the assets within a large trust.
3. When you want someone to build you a laddered bond portfolio because you don't have the time or expertise to do it yourself
4. You want access to options strategies, and lack expertise. A manager can help you with defense puts, covered calls, etc.

The typical person does not need the above. People with 1+ million in investments do.

Index funds and ETFs work fine for the average person