r2i forum

Hi,

Can anyone suggest any reliable bay area financial planners and/or attorneys that they have used (indian or any other origin)? I am looking for some help in making some investment decisions and also looking to update my living will & trust documents. I am in Fremont, btw. Thanks.

http://findanadvisor.napfa.org/Home.aspx/Search

Suggestion - look for fee only planners. Others will have a conflict of interest in that they will sell products that get them the most commissions rather than the ones best for you. However, you will find in that list that many do FP for a nominal or small charge if portfolio size is large enough and they more than make it up in commissions.

Desi;398421http://findanadvisor.napfa.org/Home.aspx/Search

Suggestion - look for fee only planners. Others will have a conflict of interest in that they will sell products that get them the most commissions rather than the ones best for you. However, you will find in that list that many do FP for a nominal or small charge if portfolio size is large enough and they more than make it up in commissions.

I got the part about fee only and commission based FPs, but not sure what kind of payment structure the part in blue implies. Is it about FPs who charge a % of assets or income, those who charge a combination of flat fee and commissions, or something else? And, is it advisable to go with such planners?

Thx.

Desi;398421http://findanadvisor.napfa.org/Home.aspx/Search

Suggestion - look for fee only planners. Others will have a conflict of interest in that they will sell products that get them the most commissions rather than the ones best for you. However, you will find in that list that many do FP for a nominal or small charge if portfolio size is large enough and they more than make it up in commissions.

How large is large enough for someone to do it?

Fee only planners:

1. They may charge just a fixed amount once and provide a plan. the amount charged can be just plain fixed or a percent of assets or service based - for example, the services needed for financial plan would be more if the investor has rental properties, an LLC, consulting business or some other business and needs the full financial plan. Fee only planners will provide an up front quote and will not skim money from commisions by selling commission loaded products.

2. They will charge a percentage of portfolio and provide ongoing investment management in addition to financial plan. This amount typically varies between 1% to 2% annually of assets and generally billed every quarter. So for example, you agree to a 2% charge, then the FP will charge your portfolio 0.5% every quarter based on the portfolio size on the ending day of the quarter. Once the portfolio size is over 500K, typically 1.5% can be negotiated. Over 1 million, 1.25% is possible and beyond that generally, FPs may agree at 1%. On portfolios smaller than 500K, I doubt anyone will provide services at less than 2%. They may do it for a fixed fee.

Commision based planners: These guys won't charge you anything. What a deal!!
They will sell you life insurances, annuities as part of financial plan. They will sell you class A or Class B load shares and they may even churn your portfolio.

Planners that charge a fixed fee and also sell commision based products:
These will generally quote an up front fee and will also try to make money in commissions. Their upfront fees will slide down as portfolio size grows. Those that do not charge any fee are either making a lot in commisions (commision only planners) or are only doing investments and not providing a full financial plan. My understanding is that if the portfolio size is less than 100K, they will quote an upfront fee for a financial plan, and investment thru them. If portfolio size is bigger than 100K, they will waive the up front fee as they will recoup in commisions. Smaller portfolios do not compensate them well enough in commisions.

There are no rules governing how much they should charge etc, the above is just my understanding of how they operate and something to be aware about.

A member Appi for example posted in a thread that he had an FP who was giving him free investment advice (not a financial plan, but only investment advice). It turned out that after we cautioned him in one of the threads, he found out that his 25K was invested in load funds and this means his actual investment was 24.2K and the FP got $800 in commisions. Appi's planner can be considered as commission only planner and he did not charge any upfront fee. He probably provides only investment suggestions and will have some conflict of interest as he will put forth only those suggestions where he stands to make commision as that is his compensation.

Since some queries on fee structure, here are a few links that explain the fee structures well.

http://www.iamadvisors.com/fee_structure.htm

http://www.investopedia.com/articles/basics/04/022704.asp#axzz1UuakcV6i

http://www.newretirement.com/Services/Professional_Financial_Advisors_Fees.aspx

[PDF]
AN ETHICAL COMPARISON OF FEE STRUCTURES FOR FINANCIAL PRODUCT AND ...

http://finance.yahoo.com/education/choosing_broker/article/101154/Financial_Advisors_and_Asset_Based_Fees

Why don't you spend some time in the discussion forums @ MorningStar (click on the link below) and when you are ready ask some questions in the appropriate forum(s). There are discussions where they talk about pros and cons of hiring FP.

Let me be clear - I have nothing against these so called Financial Planners aka Financial Experts. Imho,they are experts in putting a lipstick on a pig and will steer you towards the product(s) where they earn most of the commission. Keep in mind that nobody has your interest in mind other than yourself.

In case If you do not believe me, arrange a meeting with a FP/FA (somebody who will NOT charge a fee upfront) and then do the research on MorningStar.com and see the results yourself.

http://socialize.morningstar.com/NewSocialize/forums/default.aspx

Some of the interesting forums are - Mutual Funds, Bond squad and 'Income and Dividend Investing".

Just my $0.02.

Can anybody please recommend a financial planner/CPA in SF Bay Area with R2I expertise?

I searched the forum with "CPA" and Financial planner" and I am getting many hits for the search but drew a dud on getting the actual contacts in the bay area. I did not go through all the results, but looked at about 15 of them and most of them have a reply by a fin agent firm from Pune.

Any help would be much appreciated! Thanks!