Financial advisors at mutual fund companies help you invest less in fees
When Sam Ahmed needed help investing the proceeds from the sale of his overnight-delivery business, he didn't want to hire a pricey advisor or rely on generic information from the Internet.
So he turned to a financial planner at Vanguard Group Inc., who recommended a slate of mutual funds. Because Ahmed's portfolio exceeded $500,000, the advice was free.
"It was an excellent middle ground for me," the 55-year-old Missouri resident said. "I didn't have to pay $2,000 or $3,000."
Aware that even the hardiest do-it-yourselfers want occasional hand holding, fund companies such as Vanguard, Fidelity Investments and T. Rowe Price Group Inc. offer individualized portfolio advice at modest prices.
"We fully believe this is critical to our business," said Michael Mitchell, who manages Fidelity's Century City branch.
The programs provide basic investment advice and access to financial planners for people who don't need, or believe they can't afford, the detailed work-ups done by traditional planners.
The services appeal especially to people who have been investing on their own but want a professional looking over their shoulder now that they've accumulated a substantial nest egg.
The fund-company planners analyze a client's investment mix and recommend specific mutual funds -- a benefit for people who are paralyzed by the welter of choices available.
Although each fund family would prefer that you buy its mutual funds, the planners do not have the direct conflicts of interest that often plague the investment world, with advisors basing their recommendations on which investments pay them the largest commissions.
And the fees can't be beaten -- ranging in most cases from free to $250 for a financial plan.
The programs make "financial planning available to a large population that we as financial planners don't touch well," said Judi Martindale, a certified financial planner in San Luis Obispo. "You're getting a third-person professional view of your finances for a reasonable price."
But the services aren't for everyone.
For one thing, the advice is aimed largely at people investing for -- or in -- their retirement. If you need help in complex areas such as insurance or estate planning, you'll probably want a higher level of assistance.
"It's decent investment advice [and] it's going to be good enough for most people," said Eric Toya, a planner at Leonard Wealth Management in Redondo Beach. "But it's not a [full] financial plan, and it's not necessarily the best investment advice."
