Gyroscopic Investing

I had a discussion with one of those Fidelity Financial Planners at his office in Fairfield, Connecticut yesterday.  He was helping my wife to roll over some of her old 401k plans to an IRA so that we could setup a PP for her.  He asked what I did for my investing strategy, and I explained the PP to him briefly, and then he mentioned that he had setup a lot of his clients with PRPFX.  I was stunned.  It seems like not all financial planners are total idiots.

When I explained how I run my own PP, with the 25% gold allocation, he thought that was too much inflation protection, although he didn't immediately try to steer me towards TIPS, which was nice.

Anyone ever met a financial planner that had a clue?

I'm sorry to say that I have never met a financial planner from whom I felt that I could learn anything useful.

I've talked to a lot of them.  It's sort of like in one of those kung fu movies where the student goes from school to school looking for wisdom and insight, and finds all of them too mired in their own idiosyncratic mental bureaucracy to actually offer anything resembling the easy flow of real wisdom.

Storm wrote: I had a discussion with one of those Fidelity Financial Planners at his office in Fairfield, Connecticut yesterday.  He was helping my wife to roll over some of her old 401k plans to an IRA so that we could setup a PP for her.  He asked what I did for my investing strategy, and I explained the PP to him briefly, and then he mentioned that he had setup a lot of his clients with PRPFX.  I was stunned.  It seems like not all financial planners are total idiots.

If the conversation had ended here it would have been good.

When I explained how I run my own PP, with the 25% gold allocation, he thought that was too much inflation protection, although he didn't immediately try to steer me towards TIPS, which was nice.

The old "gold provides too much inflation protection" line tells me the person knows little or nothing about gold.  When someone starts talking about negative real interest rates, that's when my ears perk up.

MediumTex wrote: The old "gold provides too much inflation protection" line tells me the person knows little or nothing about gold.  When someone starts talking about negative real interest rates, that's when my ears perk up.

I was just pleasantly surprised that he didn't immediately try to sell us a stock heavy fund with 1% expense ratio...

He did seem pretty knowledgeable because he mentioned the Fed keeping interest rates low until 2014 and how that might increase the value of my gold holdings.

Storm wrote:

MediumTex wrote: The old "gold provides too much inflation protection" line tells me the person knows little or nothing about gold.  When someone starts talking about negative real interest rates, that's when my ears perk up.

I was just pleasantly surprised that he didn't immediately try to sell us a stock heavy fund with 1% expense ratio...

He did seem pretty knowledgeable because he mentioned the Fed keeping interest rates low until 2014 and how that might increase the value of my gold holdings.

It sounds like he was a sharp guy.  Definitely better than the normal mutual fund salesman.

I'm on someone's list because I get cold called about every six months by a "Financial Planner". They are all affiliated with one or another brokerage company and all seem to be former stock brokers or newly graduated. I listen because you never know when someone may tell you something interesting and I am curious to hear what kind of crazy they are selling.

They all want 1% of assets under management. I do not understand the logic of this proposition in a world of EFTs and internet brokerages. My lawyer charges by the hour for his advice and so does my accountant. So far the crazy they are all selling is some form of hot hand stock fund chasing. They will talk vaguely about bonds if you push them.

Seems like lots of hungry guys out there chasing not to many opportunities with the same tired con.

I would run far away from anyone wanting a percentage of assets under management.  The Fidelity guys seem like straight shooters because they don't charge any extra fees, other than whatever trading fees Fidelity already charges.  So, if you already have an account with Fidelity, it's basically a free service for those that don't know what to do with their money.  Personally I'm happy with the PP, but for Grandma Jones who doesn't have a clue, putting people into PRPFX is not a bad way to go.

The last time I got a call from a Fidelity Financial Planner wanting to manage my portfolio for a 2% fee I asked him what he was offering with his "personalized" service that I couldn't get from just investing in a Fidelity target date retirement fund at a much lower rate. Apparently they didn't have a response to that question in his training materials because his answer was "You know that's a good question. Nobody has ever asked it before". I'm betting he went back and thought up a better bulls***t response in case he ever got asked it again.

I haven't gotten one of those calls for a while but now that I've converted all my funds at Fidelity to the PP I am hoping I will get one just for the pure entertainment factor.

jackh,

2%, and they can't even answer why they're better than those awful target date funds.

Wow!

jackh wrote: The last time I got a call from a Fidelity Financial Planner wanting to manage my portfolio for a 2% fee I asked him what he was offering with his "personalized" service that I couldn't get from just investing in a Fidelity target date retirement fund at a much lower rate. Apparently they didn't have a response to that question in his training materials because his answer was "You know that's a good question. Nobody has ever asked it before". I'm betting he went back and thought up a better bulls***t response in case he ever got asked it again.

I haven't gotten one of those calls for a while but now that I've converted all my funds at Fidelity to the PP I am hoping I will get one just for the pure entertainment factor.

Are you sure it was a Fidelity FP?  I don't think they charge a fee for service because Fidelity already makes trading commissions.  Oh, and I setup my wife with a FUSEX, TLT, IAU, Treasury MM 4xPP on the rollover IRA today...

Storm wrote: Are you sure it was a Fidelity FP?  I don't think they charge a fee for service because Fidelity already makes trading commissions.  Oh, and I setup my wife with a FUSEX, TLT, IAU, Treasury MM 4xPP on the rollover IRA today...

I think you can get investment advice from Fidelity for free if you're doing a rollover or something like that but they also have a service (or at least they used to) where they will manage your entire portfolio for a flat percentage fee (and I don't think this even included additional fees for whatever funds or stocks they bought). There is a minimum amount you have to have in your portfolio to be eligible but I don't remember what it was. If you have a large portfolio you get your own personal manager. If it's smaller you are assigned to a group and decisions are made by a committee. I was only eligible for the latter at the time and this was what really made me wonder what was the difference between this service and a mutual fund.

Fidelity Branch reps sell Fidelity's Portfolio Advisor Service which is linked below.  Advisory fees run up to 1.7%, plus the cost of the selection of actively managed mutual funds. 

http://personal.fidelity.com/products/w ... efpr=mp157

brick-house wrote: Fidelity Branch reps sell Fidelity's Portfolio Advisor Service which is linked below.  Advisory fees run up to 1.7%, plus the cost of the selection of actively managed mutual funds.   

http://personal.fidelity.com/products/w ... efpr=mp157

Wow, that's a lot to pay for the privilege of being in PRPFX...