For somebody, not in real estate, who is about to retire and looking for very passive investments and doesn't want to have any possibility of the recent decline in assets for many in the stock market and doesn't like annuities, is there any benefit to financial adviser or is this just a case for do it yourself bank CD's and treasury bonds??

On Moody radio between 4pm-5pm they have a financial advice program which you can call in or email in and ask financial questions. Something called "I bonds" sounds good?

Once upon a time, I was driving a roadtrip on a weekend, and I noticed one of those financial adviser radio shows that's essentially a giant commercial for an entity. You know how it is--- the radio wants to fill weekend airtime, so a company who (sells cars) (does home repair) (gives financial advice) (sells supplements) (whatever) presents themselves as an authority on their specialty, to funnel customers to their main biz.

So, since I was stuck in the car, I listened for the whole hour-long program. The teasers were always "with our investments, when the stock market goes down, you don't lose any money." So I was curious what the investment was.

I listened for about 50 minutes while they danced around the subject, but never quite got to the point. And then-- they mentioned it super-briefly in passing, and if I hadn't been paying attention I would have missed it--- but they were buying up elderly people's life insurance policies, and then cashing them in when they died.

So, if you look up "buying viaticals" as an investment, that's what it's called.

Rick, Ibonds are good but you can only invest $10k per year per EIN or SSN. So you can do you, your spouse, your children, your LLCs...but there is a limit.

If a person doesn't have a really good grasp on finance, they take the risk that their newly hired financial adviser will be working towards his own benefit and not his client's. Or that the financial adviser won't be competent and will steer them wrong. Keep in mind that the financial adviser is absolutely not doing the advising for free. He's taking money out of the deal in some way.

If a person has a really good grasp of finances, then he maybe doesn't need a financial adviser.

I don't think there is anywhere to put large chunks of money that will generate even tiny amounts of income where there is no risk at all. Perhaps a money market fund if you don't go over the $250,000 that has federal insurance.

Yes I did tell him about IBonds but as WMH said, there is a limit on how much can be purchased.

I didn't mention but he does intend to buy a house, something he has not done before. Wants to re-locate to area close to hunting and fishing.

Do it yourself. Some of this and some of that. Plus get some stocks you like since things are down a bit. What will you and others never give up? Soda? Potato chips? Bet on them.

Talk to several fee only financial advisors and pick one who best understands what you want.

They will have you fill in a risk assessment form and evaluate your risk tolerance on a scale of 1 to 10.

They will analyze your assets, income flow, and projected expenses.

They can then come up with an investment plan that will best meet your needs.

They charge a percentage of the investments under management.

They will also review and update your estate plan, will, living will, power of attorney, etc.

Financial advisers are a mixed bag. I've found that they don't really help much with investing per se, but rather they help with planning things like when to take social security, how to ensure you're budgeting properly for various expenses, and generally making recommendations for simple, straight-forward moves with personal finance.

An INVESTMENT ADVISOR is a totally different ball of wax.

Again, the key phrase here is "advice". They don't tell you what to do: rather, a good advisor will educate you on your options, but at the end of the days it's your call.

If the person you're trying to help wants absolutely nothing to do with managing their investing, and cannot abide the risks of losing principle, the probably there isn't much better than than bonds. Tax free munis are one avenue that can get 6-10%, which is barely beating inflation if you get some on the high end. But then all you're doing is preserving purchasing power vs earning much.

Even bonds and CDs aren't that great. They may not see the value go down, but they don't return enough to accumulate purchasing power and may actually lose value. Not in terms of real dollars, but in terms of what those dollars can buy. It sounds like this person needs to be educated about the "losses" of inflation.

Also, bond values tend to go DOWN as interest rates rise, because the bonds with lower interest rates that were bought earlier when rates were low don't return as much as new bonds with higher rates. We are most definitely seeing interest rates decrease, so bond values will likely go down.

Side note: the reason most people don't ever achieve any level of wealth is they are unreasonably fearful of taking measured risks. Stocks go down, yes....but over the long haul they have ALWAYS gone up! A person should wisely allocate assets to where they aren't forced to sell when the market is down, but rather has extra money to invest when stocks are on sale. I recommend rock solid, blue chip dividend stocks to a cautious investor so they're at least getting a check each quarter even if the stock price goes down. Real money in hand can overcome some irrational fears and make a person feel better.... "yes, my stock just dropped 10%, but look I just got a dividend check for $5,000!"

Typo:

"We are most definitely seeing interest rates decrease, so bond values will likely go down."

Corrected and rephrased:

Ray,

He does not own rentals. Never owned real estate. About to buy first house for his retirement in hunting and fishing area.

I am actually an advocate for paper and intend to expand to that area.

I have an MBA in Finance, passed the online CFP (Certified Financial Planner) exam, and have managed our finances as well as portfolios for my dad before he died as well as guiding other friends and family members. Even I have an advisor, although mine is at no charge since we have significant investments with Fidelity. When I met him, I told him I don’t need help picking investments but that I saw him as a second set of eyes to keep me from making big mistakes. This has worked well, and I only contact him when doing something big or unusual and just say “do you see any issues with this”?

I think going completely alone is a bad idea….I’d at least engage a fee-only planner as needed or at the beginning.

Let me give an example of where people screw up. My mother-in-law didn’t “need” my help with her investments after her husband died, she was offended that I offered. They never made more than $35,000 a year their whole life, lived a frugal lifestyle, but had saved mostly via series E savings bonds and had over $300k in bonds. She cashed them ALL in one transaction and was shocked at tax time when the government taxed her the same as a doctor that makes $150k per year (her basis was $150k, so she only owed taxes on the gain of $150k). She was used to being in the lowest tax bracket, but due to her decision she was thrust into the “rich” bracket for one year. Had she consulted with me, I would have recommended she cash in just enough each year to stay in a low tax bracket, and do this over several years.