I have a substantial (at least to me) amount of money from the sale of a second home. The money is momentarily in a savings account at a big branch bank in the US. The amount is such that I have access to a "free" financial planner. I would not be against investing in the products offer by the bank, but think I could do better someplace else.
Should I go straight to a fee only financial advisor or is there something I, as a naive investor, can gain from an advisor attached to a big bank?
The risk is that the "free" service may be supporting itself by steering customers to products which part a sales commission, or that are products of the company/bank that employees then, rather than those which are actually best for the customer.
If you go in with a skeptical outlook, watching for this sort of conflict of interest, it's possible they might be useful. But that's not exactly a glowing recommendation...
If they try to tell you that insurance is an investment, or if they recommend anything other than low-fee index funds without an extremely good reason, run.
There is no free lunch. "Free" can cost you a small fortune over time.
If you wish to sit through a free pitch you may as well go to a time share seminar. Just keep your hands in your pocket and don't sign anything.
In the end, you will be best served spending the time it will take to learn to manage your own money. Short term, spend a few hundred dollars and find a fee only planner who will give you general advice.
My disdain for the "bank guy" goes back to an overheard conversation. An older woman, in her 70s was asking about investing in T-bills vs the bank CD. T-bills were a bit higher yield at the time. The banker stated that the CD was FDIC insured,but T-bills were not. This was decades ago, but I remember it as if it were yesterday.
I have always found that the "free" planners are just salesmen pointing you in their best interests. Not that it won't get you a good deal in the processes, but, in my experience, they usually just recommend products that give them the best commission, finders fee, kickback, whatever.
Flat fee financial planners are not really to my liking either. This is a taste thing, but generally, I feel like now that they have my fee, what interest do they have in taking care of me. That doesn't mean that they don't give good advise however. They may be a good first step.
Percentage based financial planners, those that charge a percentage of assets under management, are my recommendation. The more money they make me the more money they make. This seems to work out quite well.
Whatever you do, you need to be aware that financial planners are not just about recommending products, or saving money. That's part of it, but a good planner will also help you look at monthly budgets, current costs, liabilities, and investments. You want to look for someone that you can basically tell your goal to - "I want to have x amount of money saved for y date," for example, or "I want to reduce my bills by z amount in x months". Run from any planner that looks only at the large sum as the "solution" or only source of money. You want a planner that will look at your first house mortgage(s), care loans, income, other investments, etc. and come up with a full plan for everything.
If you're only trying to invest the new house money, and that's it, you're better off just sticking with Google and some research on your own.
