Any opinions? A bit long

nancy324

nancy324

Cathlete
This is a bit personal, but I could use some input.

My brother is a portfolio manager with a major financial institution and has been my parents only financial adviser for years. In his job, he deals strictly with institutional investors, and not individuals at all. However, my parents raved about his advice for years, and now my mother tells me that her portfolio has continued to do phenomenally well, even in these bad times. He has her invest in all Vanguard mutual funds (lowest mutual fund fees in the industry), and once per year takes a look at her statement and lets her know if she should change anything.

My DH and I have an investment adviser who doesn't invest in Vanguard funds and his fees are getting higher each year. So, we're paying high mutual fund fees and high investment adviser fees. I'm tempted to call my brother and ask if he can do for us what he does for my mother, but obviously our finances are very important and I'm afraid of risking our relationship. What if something goes wrong? Would it affect our relationship? He's the only real sibling I have, as my other brother has sort of "quit" the family. I adore his wife and kids. Is it okay to "do business" (I doubt he would charge us anything) with a family member?

Any input? Thanks much.
 
I would never invest money that you would miss. Never. All of it is a chance, no one person can tell you for certain. You are taking a chance on Company's money and stock going up. Portfolio mangers have more experience in it, but it is not fail proof. I have a a VIP (voluntary invest plan) that I set up while I was working for Boeing. In that plan I will always get my money that I started from back. But with no interest or anything back if it failed. It was the safest plan I could get. I've been in the plan for many many years, and it had it's ups and downs, it still does. I can't touch it without a huge fee until I'm 62 years old. It's doing as good as any body's.

Family business is ify. I would use someone else, because if anything went wrong and your recommendations failed you may have some kind of resentment towards that person. Best to have those feelings outside of the family.

Sorry to keep correcting my answers, jeesch.

Janie

The idea is to die young as late as possible

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Nancy, that's a tough ? I have similar (sort of) issues around whether to treat my family or not. I will treat for minor things sinus infections, rashes etc. But beyond that I tell them to see someone. I could never forgive myself if I missed something or prescribed something they would react badly to. On the other hand, they all have said they wouldn't hold it against me and I suspect they wouldn't. I would talk it over with your brother in a way to let him know that you are considering it. See if he is comfortable and go from there. I know that's not much help-sorry ;)

[font color= purple size=+3]Catherine[/font]

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Actually, when the market is down is the perfect time to invest...

I use a financial adviser endorsed by Dave Ramsey. The biggest thing Dave says is don't invest (EVER) in something you don't understand. His endorsed advisers are supposed to help you understand your own investments and help you make sound decisions based on your unique situation without getting into pitfalls.

Check and see if one is in your area.
http://www.daveramsey.com/sa/mutualfunds/

Personally, I would stay away from having family deal with my finances. There is a lot of family stuff that could stem from that and I would rather keep my investing and my family relationships totally separate.

April
 
Not a which way to go answer, but normally you would be getting statements showing how your fund(s) are doing and you should actually be making the decisions on the investments themselves. He should only be your advisor and the one who informs you.

If you have trust in him and don't have any reason not to, I would do it. I completely trust my brother as he has the same values I do.

And typically he would need your approval to make any changes - is that the case?

Another option, if you like your investment advisor, why not put it on the table as to what funds you want (is Vanguard an option with his investment firm?) and that you believe his fees are getting too high for the services you are receiving. (If you brother is not an option, maybe it is worth checking into to see if you current advisor is charging market rates).
 
Anyone can invest with Vanguard (www.vanguard.com). I rolled over my 403B from my last job into Vanguard, and picked my own funds.

The beauty of mutual funds is that you are actually investing in hundreds of different companies, not individual stocks, so they are much safer.

The best book I ever read is Ric Edelman's "The Truth About Money", and that's when I realized that my investment advisor had ripped me off by talking me into rolling over my funds into her company. I fought a year-long battle, but got every penny of that $50K back, and put it into Vanguard where *I* keep track of it!
 
Catherine, that's exactly what I was asking, and I appreciate your input. It sounds like we have similar family relationships. I wasn't thinking about how HE would feel, and that is a VERY important point. I think speaking to him generally is a very good idea. So you are very helpful. Thanks!
 
Thanks, Jacque! My current adviser is actually holding our funds, but I was thinking of going to a system where my bro just gives us advice, and we control our own funds with Vanguard.

My adviser's rates are more or less market rate, but the mutual funds themselves have fees which can be hidden. It irks me that my adviser "doesn't believe" in non-managed funds. My brother, who is not a retail investment adviser, strongly believes in non-managed funds because of the hidden fees. He says that in the long run, the non-managed funds do as well as the managed funds. I tend to agree with him. But then I'm the world's worst investor. Every time I've made my own decisions, I've lost every penny. So, I'm confused.
 
>Anyone can invest with Vanguard (www.vanguard.com). I rolled
>over my 403B from my last job into Vanguard, and picked my own
>funds.
>
>The beauty of mutual funds is that you are actually investing
>in hundreds of different companies, not individual stocks, so
>they are much safer.

Yes, I know Lisa. Can you believe that I once did my own investing in MUTUAL FUNDS and lost EVERY PENNY???? I know, but it's true. I had a few investment courses in college and I read Charles Schwab's book, so I thought I knew what I was doing. NOT. That's when I decided I just can't go it alone. I know just enough to be dangerous. ;)
 
>Personally, I would stay away from having family deal with my
>finances. There is a lot of family stuff that could stem from
>that and I would rather keep my investing and my family
>relationships totally separate.
>
>April

Sound advice, April. I may be allowing my greed to overcome my common sense here.
 
By the way, I just remembered that many years ago, when I first became an estate planning attorney, the same brother asked me to review his will just to see what I thought. I didn't mind at all. He also asked me to review the legal documents when they bought and sold their house, which I was happy to do (although in PA you don't need an attorney for a closing). Maybe this is along the same lines?
 
He asked you to review the docs, but were you their attorney?

I don't think it's a problem to ask your brother's opinion, but I would then discuss that with my financial adviser (a non-family member).

I've heard too many stories regarding messed up family relations from money deals. I like my family too much to put our relationships in jeopardy.

Just my opinion, of course. :)

April
 
I have heard the term "Don't keep ALL your eggs in one basket". Could you keep some with your financial advisor and some where use your brothers advice.

Debbie
 
You're right, April. I wasn't "their" attorney. I was just reviewing someone else's work on the Will because I don't know Pennsylvania law, and on the closing, an attorney wasn't even required. Hmmmmmm.
 
Nancy,

I think it's OK if you have a good relationship with your brother, you trust him professionally, and he understands you and your husband's financial needs and goals. If those three conditions were in place, then yes, I would ask my sibling to be my adviser -- while remaining cognizant of the fact that there is still risk involved.

Let us know what you decide.

[font face="heather" font color=black size=+2]~Cathy[/font]

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Hi Nancy,

I think you need to decide if you want someone to handle your money for you or if you would like to do it yourself, possibly with your brother's advice. I can certainly understand the fear of losing what you have, especially if you have done so in the past. Perhaps having his advice would make the difference. If you want someone else to do the actual handling and decision making, I don't think you are going to get around the fee issue unless you have your brother do it.

I have sort of the same situation in which my uncle is a CFO of a company. I tend to talk financial matters over with him, but I make the final decisions and do the actual investing.

Of course, there are other options out there besides Vanguard that you can do on your own, and perhaps your brother could point them out to you or you could do the research and run it by him for his opinion, which might increase your comfort factor in handling things yourself. I'm sure he would be happy to help you. (That being said, Vanguard is where I have our IRAs lol)

Anyway, good luck with whatever you decide.

Tammy
 
Hey Nancy, sorry to chime in late, but I kinda like the idea of showing your last few investment account statements to your brother and ask his advice on what you might tweak -- in much the same way that he asked you to look over his estate lawyer's work years ago. You could use that conversational jumping-off place as a starting point for exploring whether or not you, DH and he would all be comfortable having him handle some of your portfolio. I probably wouldn't ever have him handle all of your investments, just because I don't like the idea generally of having everything in one place or with one person.

We have a similar situation in that my BIL is a successful real estate investor and has always offered us "opt in" opportunities on his deals. We've invested some money with him and all of us are very happy with the return and the whole situation. It feels good to be supportive of him, and he's done very well by us. But DH and I still have a financial advisor who handles our retirement accounts and a few other investments.

http://www.clicksmilies.com/s1106/sport/sport-smiley-003.gif Kathy S. http://planetsmilies.net/sport-smiley-5536.gif
 
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