Note from the editor: Client Dave and his wife got help from an Advice-Only financial advisor on investing and Social Security. They were able to cut their advisor fees by $12,000 a year. Think what they can do with an extra $12k/year in retirement! Dave kindly agreed to share his experience.
My wife and I recently retired to the east coast. I was looking at the possibility of replacing my financial advisor because she charged a 1% fee and this took a significant chunk out of our portfolios each year. I was looking for advice on setting up our portfolios so they require minimal changes other than occasional rebalancing. I also needed assistance with moving our IRA retirement investments to a new financial institution.
I prefer working with an advisor face-to-face but I also realized it may not be possible to find someone who offers Advice-Only services in our area. I was open to doing video chat or, if necessary, driving a couple of hours to another city. Finding a good advisor is more important to us than the location.
The Advice-Only advisors were all able to work with me remotely by phone or over the Internet. I looked at their profiles and I contacted one who looked to be a good fit. The advisor sounded like he was a great fit especially since he said he could also do a detailed Social Security analysis. Since his services seemed to be exactly what I needed, I did not contact either of the other two.
This advisor turned out to be an excellent choice. We did everything through email and one screen-sharing session over the Internet. An unexpected bonus with the advisor is he is a Social Security expert. He came up with a plan for us that I would never have thought of. It will allow us to collect Social Security early and give us more for the long term!
As far as investment advice, I am moving our two IRA’s to Vanguard and he recommended investing the funds in their LifeStrategy Moderate Growth fund. He started by recommending investing in several Vanguard funds but after further analysis, he said the LifeStrategy fund should produce similar results. A great benefit of using the LifeStrategy fund is that it requires very little ongoing maintenance, which was one of our goals.
Our IRAs are now in the process of moving from our old advisor to Vanguard. Needless to say, our prior advisor was not pleased! She tried telling me the ~$12k in fees she was charging would be more than offset by the additional gain she can provide. I don’t believe it. Working with the new advisor only cost us $500 and it included the Social Security analysis. At some point, I may have him do a full-blown income and expense analysis for our retirement.