First Steps with our financial planner / investment advisor

Here are some of the first steps with our financial planner / investment advisor.

We had several lengthy conversations about first steps and time frames.

As I'm still in job pursuit (at this point an offer is pending back in the big city), I'd like to have our investment plan in place before I start the new job (if it happens - there may be issues re: non-compete, relocation, etc...).

Our investment advisor (IA) and I discussed the fact that we could not follow the traditional path of a comprehensive financial plan (investment and financial planning) up front due to several significant life changes occurring and pending:

1. newborn
2. new jobs
3. move
4. selling and buying houses

Consequently, IA and I agreed that we would proceed with the investment plan (which collected much of the same information for the financial plan) and I would pay the difference when ready to make the financial plan next year.

After agreeing to last minute details on fees, he resent me the investment planning contract and a detailed survey of our investments and goals.

The survey entailed collecting last year's tax return and providing details on all of our investments, including form of ownership, tax status (retirement or not) and cost basis (for non-retirement).

Cost basis is quite tricky as Quicken 2007 and prior editions seems very spotty - it's tendency to insert place holder transactions has messed up much of my effort to clearly track our investments. In general Quicken tracks investments with very simple transactions (buy, sell). Multiple sell transactions, for example, when an insurance company sells shares of mutual funds in a variable insurance policy to pay for premiums dramatically increase the risk of placeholder and confusing transactions. Fortunately, as I plan to terminate the insurance policies, the insurance company has been tracking my cost basis for the investments wrapped within the insurance policy.

When discussing our financial goals, it was odd, but I could only think of retirement, college for the kids and their weddings. I didn't really put anything extraordinary, such as a trip around the world in a zepelin, living in China or Europe, or a two year geneological research project. I should discuss this with my wife and see what she would like to add in. Of course these things are expensive - perhaps not practical, so I avoided dealing with them.

As I always have my financial statements scanned as .pdf (acrobat reader) files, it wasn't difficult to e-mail all of them to IA. I hope he doesn't mind the full mailbox.

One time consuming effort was scanning all the investment options for my wife's 401k plan. Their organization is quite poorly served - the bank that sponsors the plan charges 0.5% AUM as a trustee. Schwab would charge 0.07% for the same services. This charge is made every month. I think it's foolish, on top excessive charges from a portfolio overloaded with actively managed funds. Even the S&P 500 selection has 0.5% expense ratio - compare that to Fidelity, Vanguard, etc....

However, I sent IA my wife's investment options so they may be coordinated with our other investments.

I'll follow-up with him later today to ensure all was received.

I imagine the next steps will be additional requests for information from him and probably a discussion of exactly how much cash reserve we really want/need.

IA's help in bond investing will be very useful. I have to admit that the world of bonds is a mystery to me.

Have a wonderful day,
makingourway