Main Ways To Use A Financial Advisor For Experienced Investors

Larry Ellison's Mega Yacht Musashi In OahuThe two week vacation to Hawaii was perfect except for one thing. My financial advisor from Citibank failed to call me the day a particular deal was closing as previously discussed. This investment offered between a 15% to 20% guaranteed return on the Dow Jones over four years if the Dow closes above the initial strike price plus any upside beyond the guarantee and a 10% downside buffer. I wanted to know whether the guaranteed return was 15%, 16%, 17%, 18%, 19%, or 20% to determine how much to invest. I already made up my mind that I would lob anywhere between $20,000 – $30,000 into this note.

Instead of getting a call on the day of closing, I get an e-mail two days after the close saying he got his calendars totally mixed up. Sigh. At least give a believable excuse! You know like, “I went binge drinking the night before and called in sick on Monday.”

Tim’s lack of follow up is costing me around $1,000 in paper gains in just a couple of weeks as the Dow has moved from 14,300 to over 15,000 at the moment. As an early retiree, I’m investing all the disposable income I’ve got because I’m looking for capital appreciation and income to help replace my lack of W2 income. Leaving cash in a money market account yielding 0.1% is a financial crime I refuse to commit.

Lesson learned. For those of you who are interested in an upcoming IPO and plan on going away for vacation, put in your IOI (indication of interest) before you leave and stagger your order size depending on the final price. My financial advisor might still forget to input the order, but at least there will be an e-mail trail indicating my IOI, and the firm can fill the order in arrears.


* Investment ideas. There are always interesting investment opportunities somewhere, it just takes effort to look. If you have another set of eyes specifically looking for investment ideas meeting criteria you’ve discussed beforehand, then your chances increases of finding hidden gems. You can ask your financial advisor to send you a weekly e-mail with what went on in the markets, a screen of buy or sell ideas, or big news and analysis. Somebody is always making money on something, somewhere.

* A sounding board. Hopefully your financial advisor is financially astute, and not just a salesman looking to get you into the latest product with high embedded fees. If you have an experienced financial advisor, definitely use him or her to test out your ideas. For example, I made a three minute pitch to buy Chinese internet stocks to see if he had any feedback that I might be missing. He echoed most people’s concerns about corporate governance and voodoo accounting. But he really had no idea what he was talking about, which is fine. Before you buy anything, it’s always good to understand a reason why someone would be selling.

* Learning seminars. My financial advisor at Fidelity where I have my rollover IRA always e-mails me the latest upcoming seminars that are hosted in her office. The latest two are: Lessons From The Downturn and Intermediate Options Strategies. If I want to learn something, get some free food and beverages, and meet new folks, what better way than to attend one of these sessions. Leverage your financial advisor to expand your knowledge.

* Tax and estate planning. Many of us are financially astute in making and saving money, but when it comes to taxes and estate planning we need as much help as possible to avoid getting robbed by the tax man given tax laws are always changing. It’s also recommended to consult estate planning lawyers due to all the law changes. I plan on discussing Rule 72(t) strategies with my advisor later in the month as well as talk about potentially opening up a Fidelity Personal Retirement Annuity, which is not an annuity, but a fund where I can contribute after tax dollars, regardless of my income level and allow the growth to compound tax free. The FPRA is much like an IRA. Financial advisors generally have colleagues in different branches who can help you out on a multitude of financial issues.

* Portfolio Rebalancing. Over time, your investment portfolio can get out of whack due to the growth of your winners. A financial adviser can rebalance your portfolio on a monthly, quarterly, or yearly basis per your instructions so you don’t have to. Having a balanced portfolio based on your risk tolerance is important, especially during downturns.

* To relax and enjoy life. Most of you with financial means have better things to do with your lives than just watch over your money. You’ve got countries to see, family to be with, inventions to create, and work to do. While in Hawaii I was hiking, playing golf, surfing, scuba diving, eating like a hungry hippo, horseback riding, and watching sunsets over a different cocktail every single day. The last thing I wanted to do was think about whether Apple would beat estimates or sink further below $400. Knowing that a financial advisor has my back lets me relax on the more important things in life. Money is only a means to an end. If something big is happening or a position is blowing up in your portfolio, trust that s/he will let you know and make prudent decisions for you or at least give you a heads up.


It’s important to set expectations in the beginning for what you want out of a financial advisor. For my financial advisor at Citibank where I’ve developed a relatively meaningful portfolio, my #1 request is to have him e-mail me the prospectuses of all new index or single stock structured products that comes up every month and let me know which one he likes best. Given I plan on investing new money every single month, it’s important to be aware of a steady pipeline of new securities.

For my financial advisor at Fidelity, all I ask her to do is put me on the mailing list for all upcoming investment seminars that are held in her office downtown. I enjoy learning new things and meeting new people. I’m particularly interested in shielding as much of my investments as possible from the tax man, so I’ve asked her to let me know whenever there are any new tax efficient product offerings.

To make sure I know where all my money is going, I simply aggregate all my financial accounts online and check in once a week or so to make sure everything is on track. Sometimes I catch ridiculous bank fees I had no idea I was paying. Other times I just like to make sure I have a comfortable net worth mix. Finally, once a quarter I run my portfolios through the Investment Checkup tab to see where I am under or over allocated for someone with my risk tolerance. It’s nice being in the command center online.

If you want further motivation to save, getting a financial advisor assigned to you for free because you have X amount of money with an institution is a very nice perk. There is something very comforting knowing that someone is watching over your investments, especially when you’re away on vacation. I know many older retirees who dial up their financial advisors just to shoot the breeze because they are bored and want someone to talk to.

If you are not there yet, don’t worry as it just takes time. Financial institutions really do start favoring their larger customers with diversified product offerings, lower borrowing rates, and better service for the most part. You may even get invited to social  boondoggles just because they want to keep you entertained. Once you amass a large enough financial nut, just make sure your financial advisor is at least on the ball with what you’re looking for. Now if I can only get that $1,000 in paper profits back.


* Manage Your Finances In One Place: The best way to become financially independent and protect yourself is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing and how my net worth is progressing. I can also see how much I’m spending every month.

The best tool is their Portfolio Fee Analyzer which runs your investment portfolio through its software to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was paying! There is no better financial tool online that has helped me more to achieve financial freedom. It only takes a minute to sign up.

They recently launched the best Retirement Planning Calculator around, using your real data to run thousands of algorithms to see what your probability is for retirement success. Once you register, simply click the Investing tab on the top right and then click Retirement Planner. There’s no better free tool online to help you track your net worth, minimize investment expenses, and manage your wealth. Why gamble with your future?

Updated for 2016 and beyond

Photo: Larry Ellison’s mega yacht named Musashi. You know his financial advisor is keeping him up to date on his billions or else!

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship. Sam focuses on helping readers build more income in real estate, investing, entrepreneurship, and alternative investments in order to achieve financial independence sooner, rather than later.

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  1. nbsdmp says

    Maybe a person question…but what is your net of fees/taxes target return percentage you are looking to hit when blending across all your investments? My target is a conservative 6.5%, that gives me limited downside risk with participation in the upside. I’ve been doing much better, like everybody lately, but not as good as I could have. At this point I’m o.k. just hitting singles instead of needing to sprinkle in a few doubles and the occasional HR.

    • says

      I use several benchmarks which I’ll write about in a future post. Generally I like to go for 3X the 10-year treasury yield, so that’s 5.5% currently.

      It’s all about hitting singles for as long as possible, with the occasional grand slam!

      • nbsdmp says

        o.k. we are pretty much on the same page…I agree to keep it is best to keep your pile protected and swing for the fences on a few when it doesn’t impact if your lifestyle if it falls through.

  2. says

    There definitely is a range of experience and knowledge amongst financial advisors. I met with one woman who knew her stuff but the service offerings weren’t great for my income level so I decided to pass. I found someone else who is less experienced but offers a lot more options, minimal fees, and still a solid foundation of knowledge that I don’t have instead. I still do a lot of my planning and investing independently but as you said it’s nice to have access to a financial advisor for tax and estate planning help and other areas.

  3. Eric Shun says

    I’ve been full-on with Fidelity since 1986, rolling over several 401Ks into a Fidelity IRA, direct depositing my paycheck, paying bills and writing checks out of my cash account. For a few years now, my total assets w/ Fidelity have well-exceeded the threshold for Fidelity’s no-cost financial advice. I’ve always self-managed my investments, nothing fancy, a few blended Fidelity and Vanguard mutual funds, CDs, and long-term AA corporate bonds. I just had a $50K CD come due and another one coming due next month. For the first time, I’m feeling quite stuck on where to invest the money, so I finally decided to take advantage of Fidelity’s offer.

    Frankly, the advisor has been a big disappointment. I’ve never been able to reach him on the phone and after I leave a voicemail with my daytime office no., he calls back two days later after 5:30pm so as to (intentionally) miss me. He left one voicemail recommendation – a Fidelity GNMA mutual fund yielding 2%. No thanks. This is my only disappointment with Fidelity, ever, over nearly 30 years.

    • says

      If in 30 years those are your only complaints, then that’s not bad! That said, I find it annoying if an advisor can’t even acknowledge and e-mail or call back in a timely manner. It’s a service business at the end of the day. Maybe ask for a change?

    • says

      It may seem that way since Citi is so big, but it’s all about doing business with the local branch. Local branches have their own targets and are run like little franchises within Citibank. It’s why they have Branch Managers, “branch of the month” etc. First Republic is a bank that’s noted for personal service that I use as well.

  4. says

    What is the minimum for a no fee advisor with fidelity. If you are looking to minimize your fund fees isn’t vanguard admiral shares the way to go. You can’t get that from fidelity.

    • says


      Perhaps you are confusing the two. One is fund fees, and one is an advisory fee for advice. I can buy all Vanguard funds if I want in my Fidelity IRA account. But I’m actually buying all stocks, which have no fees. The Fidelity advisor advises on tax and estate planning among other things.

      I’m not sure what Fidelity’s minimum is. Perhaps $250,000. I’ll ask. This level of financial advisor is assigned for free to anybody with X amount automatically. Which makes me now wonder what a fee only advisor you pay extra for can do. The answer is likely the sophistication of financial advice in building custom portfolios among other things for you.


    • says

      Average junk trades at a premium to par with a yield of 5%. This company wants $50MM via unsecured, sub debt sales to the public at 7-18%? And they’re willing to take any amount of money from 3 months to 10 years?

      Smells like a sketchy deal. Electricity trading cannot be that profitable.

  5. says

    My experience with financial experts has been pretty negative over the years. I’ve come to the conclusion that I know my objectives and risk tolerance well enough to go it alone. It may sound arrogant but I’ve had better results with my own strategies than with guided advice. I’ve been investing for almost 30 years so have a pretty large pool of experiences to draw from.

    • Sam says

      I think youve got to do whatever suits you. With 30 years of experience and an interest in managing your own money then all is good.

  6. Sam Pittsburgh says

    This read opened my eyes a bit to using an advisor…

    With T Rowe, they give you preferred status over $250k and also a CFP to prepare a written report optimizing your assets….most new money goes to Vanguard index funds now…

    But my opinion is simple – advisors are a wedge between you and your assets – wanting about 1% of your net worth each year and not giving the investor any better return than noload funds and chosen stocks. in sum, I am 16.9% YTD on my own (since ’85) without needing more than a fund representative.

    I do believe that estate planning trumps financial planning but have not got to that yet…back to work…

    great article..

    • Sam says

      That’s a great compounded return. It really depends on how good the financial advisor is. If they are on the ball and have an acumen for picking stocks, funds, and asset allocation, then 1% is worth it. If not, then forget it.

  7. Anton Ivanov | Dreams Cash True says

    Interesting suggestion, although I don’t see a need for a paid financial adviser for the majority of investors, who should be investing mostly in index funds anyway. I suppose if you had an adviser assigned to you for free, it’s a good idea to take advantage of his knowledge and expertise, so long as he doesn’t sway you into doing something with your money you will later regret.

    • says

      I agree, I also invest in index funds all over the world and pick ones with really low charges, I don’t see the need to pay my financial adviser 3% initial and then 1% trail every year after he picks funds which have an AMC of 5% or more. Granted financial advisers have cutting edge research tools to find the best funds however it has been proven that index funds are hard to beat over a period of time. Nice article.

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