Birthday Boy’s Gift: A Conversation

I celebrated my 51st birthday this weekend and took Friday off to mark the occasion. (Thanks, bosses!)

And what did I do on that hot, beautiful day? I spent a couple of hours in a corporate office park, talking to my wife’s financial advisor at Stifel Financial.

Who would want to do anything else, or be anywhere else?

We spoke about children, our families, about my late father-in-law, who was a member of the advisory team at Stifel. We shared anecdotes about youth sports and later, during lunch in the cafeteria, about gun control and the responsible use of guns.

We talked about Rome, where my wife’s advisor had been recently, and where we’re planning to go this summer.

And, of course, we spoke about financial planning, moving my wife into a less expensive account, index funds, equities, bonds and annuities – even indexed annuities and variable universal life insurance to be precise.

We got into a conversation, and that was birthday present enough for me.

It took a few go-arounds, though

The first came back in December, when I reached out to my mutual fund Vanguard where my retirement assets are held.

That was all business: numbers, future dreams, estimated retirement income, assets held in different places, combined spousal Social Security income. That took all of 60 minutes. A week later, I had a plan: move money from this fund to that fund – all Vanguard, all indexes – pie chart A, B and C.

Insurance? At Vanguard? No, we don’t do that. That’s for your insurance agents. OK, I understand.

Indexers are all about value, don’t you know, my man at Vanguard told me.

For about $1,000 a year or thereabouts you’ll be good to go for the rest of your life (so long as I don’t do anything rash).

You in?

Not quite. Sorry Vanguard, I said. I need some more time to think about it.

Glad I did, as round two was just around the corner.

In March, an advisor with Morgan Stanley came calling in the form of an annuity dinner. I said yes, and was rewarded with the beginnings of a conversation. Tell me a bit about yourself? How long have you lived in this area?

Youth soccer? Your daughter plays?

She sure does, I said.

My daughter may be trying out with one of the teams at your soccer club, he said.

She is? Interesting, I said. I hear word’s going around there’s a lot of turmoil at your club and a lot of soccer moms are shopping their daughters around.

Ah, now you have my attention, I thought. Let’s talk about soccer …. Now back to financial planning, annuities, the fiduciary rule, the tax hit of bringing in a couple hundred grand into the U.S. from a foreign country.

Chicken here is good, isn’t it? Can you pass the bread please?

That night in March, we were a small group.

It was just me, another couple sitting across from me and another man, who was seated to my right.

He seemed very knowledgeable about investing (maybe a bit too knowledgeable). Midway through the meal, he went to the bathroom, came back and suddenly had to excuse himself and left.

Well, that was odd, I thought.

My man at Morgan Stanley, ever on the ball, called back two weeks later to see if I might come in for a financial plan. I said I needed to give it some thought.

There was still a third round.

Now, back to round three at Stifel with my wife’s family advisor. I walked into the office at 10:30 a.m. and left at about 1 p.m., right after lunch.

That’s my speed, I thought. That’s more like what I imagined in a financial advisor. Of course, it all comes at a cost.

Yes, there’s always lunch, but it’s never free and it’s hard to compete with an advisor who’s already part of the family

Right now, so I’m told, my wife’s paying well over $1,000 a year for her investments in mutual funds – C-shares and all that.

I’m in Vanguard, where I have more assets than my wife does at Stifel, and I’m still paying only a fraction of the price. Vanguard never ceases to flog its value, can’t argue with that.

But hey, it’s her money. Who am I to butt in?

Still, the conversation led to an immediate financial return.

Switching my wife into a fee-based account at Stifel would chop off more than 50 percent of the cost of what she’s now paying in fund expenses – all internal costs, of course – those that exert return drag and don’t come off the top.

The bulk of expenses go to the firm, you understand, not to himself, my wife’s advisor said. I’ve let my wife know, but let’s see if she acts on the advice.

In the end, with deference to John Bogle, I guess you get pretty much what you pay for, conversations included.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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