Who Should You Hire?

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L1: Who Should You Hire?Who you should hire is potentially the trickiest question of all. In this regard, we have professionals running around with 20 different acronyms behind their name: RA, CPA, LLB, CFP, FA, CLU, RIA, etc., etc. I would like to suggest one approach to the problem and that is break down your financial needs into three basic buckets:
1. Overall financial planning; e.g. the big waterfront with 10, 20, 30 year objectives.
2. Technical help; in this case, tax advice.
3. Investment product help.
Rarely, although not impossible, will anyone find all three needs bundled into one person; instead, it is likely that it will take at least 2 and often 3 people to meet all the needs above.
To meet #1, I suggest always visiting with either a CPA or CFP or some one holding both designations.
To meet #2, I suggest always visiting with either a CPA or tax attorney.
To meet #3, I suggest visiting with a variety of investment product sales people; brokers, RIAs, CLUs etc.
Next, if you look at the service or product you buying in each of three cases; then, how to pay for the service becomes readily apparent. Predominately, when purchasing services for #1 and #2, they should be on an hourly basis as you are purchasing a fixed product; e.g. the plan or the technical advise. Conversely, when purchasing services for #3 it is quite appropriate to pay on a commission basis; either on a by trade۝ basis or as an annual fee based as a percentage of assets under management.
Just my 2 cents worth.
TheBadger
wjstecker@wispertel.net
2005-11-08 19:27, By: TheBadger, IP: [66.250.23.21]

L2: Who Should You Hire?Thanks for your profound advise. Just a thought…why does gathering information (=)head-ache (+) knowledge (+) peace of mind I suppose it’s all worth it if you come outalittle more knowledgeable then whatyou did enteringthis Forum.2005-11-09 16:48, By: Diana911, IP: [209.179.251.148]

L2: Who Should You Hire?Generally speaking, do “fee only” advisors take their fees out of ones’ assests (e.g. a managed IRA) or does a client have to pay them out of pocket?2005-11-10 15:35, By: francis3, IP: [141.154.237.189]

L2: Who Should You Hire?They may or may not. An invetment advisor would typically receive a percentage of assets, but that would be for assets managment, not establishing a SEPP. Certified Financial Planners may work on an hourly fee,a commission or both. You really have to duiscuss with the individual you are considering.2005-11-10 16:23, By: Gfw, IP: [172.16.1.73]

L2: Who Should You Hire?The “investment advisory fee” is generally paid from the account(s) being managed whether it’s an IRA or other type account. But ask your CPA what’s best for your situation. I have clients with both IRA and Non-IRA accounts which are all “fee-based,” and they pay all fees from the Non-IRA account.
Using this method all fees go to the bottom of IRS Schedule A, Itemized Deductions, in the Other Deductions subject to the 2% limitatioin. By loading the fee expenses into Schedule A they are able to pick up a lot of truly “other” deductions that would otherwise be lost.
One last thought about fees: Investment advisory fees and IRA admin fees paid from the IRA account which is the source account for SEPP distributions does NOT constitute a “change” that will “bust” the SEPP. But someone with this situation always has the option of what source of funds to use to pay the fees, which explains why you get a bill each year from your custodian for the annual IRA admin fees.
Jim2005-11-11 08:04, By: Jim, IP: [70.184.1.35]