Review of fire your financial advisor

Review of Fire Your Financial Advisor!

Phew! I have just finished reviewing the White Coat Investor’s course – Fire Your Financial Advisor!

The White Coat Investor (WCI) is claiming that the course contains over 7 hours of video and I would not dispute that. I watched every video and took every test. Even putting the video on 1.5x I probably spent over five hours reviewing this product. So feel free to question me, or solicit my opinions if this review fails to address anything.

Have you read the important notes before proceeding any further?

[This post contains affiliate links. This means that if you click on my link and purchase the course then I receive a sum for the upkeep of this blog and you will not pay any more. This post was not sponsored but I received a review copy gratis]

Fire Your Financial Advisor!

I’m going to briefly cover the content and give some of my thoughts on the different sections. Then I will address in depth who this course would suit.

The course is aimed at “A high income professional who wants to be a do it yourself investor but doesn’t yet feel capable of writing a personal financial plan”. However later in this review I have a quick diagnostic tool that should help you think through whether this is right for you.

Contents of the Course

But what does the course contain? It is divided into 12 different sections and each section has around 8-10 videos.

  1. Introductory Materials and Pre-test
  2. What You Need To Know About Financial Advisors
  3. What You Need To Know About Insurance
  4. Developing a Plan For Your Housing
  5. Destroying Your Student Loans
  6. How to Spend Money to Increase Current and Future Happiness
  7. Creating Your Investing Plan- Setting SMART Goals That Matter to You
  8. Creating Your Investing Plan- Understanding Your Investing Accounts
  9. Creating Your Investing Plan- Asset Allocation and Implementation
  10. Estate Planning
  11. Asset Protection
  12. Staying The Course and Final Exam

Each section is centered around developing your own personal financial plan that spells out exactly how you will approach the key areas described in the course. It’s an extremely practical and hands-on method that emphasizes governance over depth of knowledge. That’s not to say the material is shallow – it’s not. But there is so much material that the rate has to follow a fast clip and the focus is on practical measures to take, rather than any theory.

Governance, and written policies are big in the institutional investment area but I have not seen it emphasized in the personal investing space. If you are the trustee of a pension plan, or the fiduciary of an endowment then you will have a number of written policies, but do you have your own policy? I certainly don’t, but I think I’ve been persuaded that this has benefits. There is a certain discipline and clarity around writing down what you are actually going to do.

My Quick Thoughts on Some of the Sections

The course kicks off with a quick pre-test. I think the goal is to show you what you don’t know and therefore provide a proof statement for when you complete the course and are then able to breeze through the final test. However when I was presented with the second question that was around some arcane  knowledge of how disability insurance riders might apply to physicians, I almost stopped there and then.

I certainly found the constant reference to physicians to be off-putting at the start. I did have my doubts over whether this was really a course for all “high income professionals”, or whether it was very specific to those in the medical profession. But on-balance there is enough meaty material that is not profession specific.

Financial Advisors

The section on what you need to know about financial advisors sounds like it could be rather dull, but provides a snappy overview of the industry and how it makes its money. I actually don’t think that this course is necessarily a replacement for a financial advisor, and I could quite imagine many people taking the course and then re-engaging with an advisor with a new-found authority and confidence.

Insurance and Student Loans

The insurance and student loan sections are beasts. It’s very high nutrient material that will take a couple of go-through’s to really extract the maximum value. I felt cast adrift in the student loan section. Having never been a medical student and not having had a student loan for years I wasn’t sure which of the material was specific to a medical professional and what might be relevant to non-medical professionals. If you are not a doctor and you have significant student loans then I would check out that section first, and confirm to yourself that it is really going to be relevant to your situation.

Live Like a Resident

Those that are familiar with the WCI will know the maxim “Live like a resident”. Despite the medical sounding slant here it is totally relevant to all professionals. Whether you are a lawyer, doctor, actuary etc you will likely face a point where you move from impoverished student to facing an embarrassment of riches. How you handle that transition will define your future financial life. This section provides an impassioned call-to-arms on this issue.

Investments

I was looking forward to the investment section, since that is my area. The material cracks along at a speedy pace and is presented in a very formulaic way. For example – “here are four acceptable portfolios” and “here are some guidelines for asset classes and diversification”. We all love our own subject and want it treated with reverence and respect, but that’s not the style here. This is more in the style of a survival guide. To survive a night on the mountain you need some practical tips and guidance on the best gear to take, you don’t need to know detailed  physiology of hypothermia.

I would say that the summary of asset location, rather than asset allocation was top rate. I expect I have seen concise descriptions of this before, but maybe the video format helped it to sink in a bit better for me.

One Deficiency

For me the investment section revealed one deficiency of the course; a lack of attractive visuals. The delivery is either through straight to camera talk from the WCI or Powerpoint bullet point.  I didn’t expect, or need, flashy visuals, but a topic like investments does lend itself to some explanatory charts. Even a concept like asset location could have been pepped up with a few spiffy charts. I agree that I would be challenged to make an informative visual for a Roth IRA conversion, but some of the material could be brought to life with a simple diagram, rather than ‘chalk and talk’.

Estate Planning and Asset Protection

The section on estate planning was excellent with a real cut-the-crap style that I appreciated on a subject that I know little.

I’m still on the fence about the asset protection section. Obviously with malpractice risks this is top of mind for many physicians, but how relevant is it for other professionals? It’s not impossible to be personally sued as an actuary, and this is more likely outside the US, where the contract with the client can be with the actuary rather than the company, but it’s pretty rare. However if you are running your own business then I think this section will be relevant.

The What and the Why

This course is excellent at answering the question – What should I do? However, if you want to answer the question – Why do it like that? Then you will be less satisfied.

But let’s be clear, the course is unapologetic on that. It is expressly designed as a practical express route to drafting your own personal financial plan and to equip you with enough information to prevent you from making stupid mistakes.

Are you confused about investing and want to be given a suitable portfolio to invest in? This course will tell you.

Do you want to know why that might be a suitable portfolio? Well, you might be left hanging.

If you have the comfort and knowledge to manage your finances and are doing your own research and reading into the deeper aspects of finance, tax, investing and insurance then this course might not do it for you. But if you want prescriptive advice that is direct and to the point, then you have arrived at the right place.

How do I know if this course is for me?

Luckily for you I have thought of everything and designed the Actuary on FIRE course suitability quiz™ Simply answer these questions and this proprietary diagnostic tool will tell you whether this is for you.

Award yourself one point for any of the following that apply to you.

  1. You are a physician.
  2. You are a high income professional. (Physicians immediately get two points from these first two categories, and that was intentional from me, since this course is especially relevant to you)
  3. You are early in your career and have just experienced, or are about to experience, a step-up in income, and you anticipate ramping up your standard of living. (This might be a newly qualifying doctor or actuary, a finance professional that has recently passed the CFA etc.)
  4. You have little confidence in investing and are continually swayed by what you hear among peers / family / friends / the press. (For example: put your money in gold, buy bitcoin, buy tech stocks, the market is set for an imminent crash, etc.)
  5. You have some knowledge about personal finance but do not have the time / energy / inclination to devote to this area.
  6. You are relatively knowledgeable about personal finance and have a spouse / partner / sibling / parent that is not into this stuff but has an appetite to learn.
  7. You have paid for financial advice or a financial product, either directly to an advisor, or through implicit product costs, and don’t understand how much exactly you have paid or what you received in exchange for the payment. (If you don’t know exactly what you are paying, or getting in return, then this course will save you money; guaranteed.)

Award yourself one half point for any of the following that apply to you.

  1. You have used a financial advisor and want to understand what they do for you, or you want to make better use of your consulting dollars.
  2. You are in the spendown phase of retirement and have little to no knowledge of estate planning
  3. You are a high earner but wonder each month; “where does the money go?”

 What did you score?

0 – 2 Points. You are not the obvious candidate for this course. However, see the ‘no risk’ comment below

2.5 – 4 Points. You are in the sweet spot for this course. I would expect you to derive value from this product.

4.5 Points or more. I really think you need to look at this course. If you are looking to minimize your time spent learning this stuff then you will derive considerable value from this course and it will easily save you more than $500 worth of mistakes.

Do you enjoy this blog? Then please let others know and share the love on Twitter @actuaryonfire and Facebook. I appreciate it!

Fire your financial advisor!
Fire your financial advisor!

I’m still struggling to get my arms around this – give me an off-beat travel metaphor to help me out

You arrive at the New Delhi train station in India as the departure point for a 1,000 mile trip to Mumbai. It is a sea of confusion with people everywhere! Your senses are bombarded by a cacophony of noise, with traders hawking goods and continual shouting and jostling from sellers who are hoping to catch your attention. As you struggle to gain your orientation, out of the crowds appears the White Coat Investor. He leads you firmly by the arm, pressing a ticket into the palm of your hand, and shows you to your train carriage and seat. The train leaves the station and barrels through the countryside where you flash past sites of interest. Perhaps you fleetingly glimpse the Taj Mahal through the changing scenery. But you have no time to pause, reflect or investigate it any deeper. The object of the journey is to get you to your destination as quickly and efficiently as possible whilst avoiding any pickpockets or scam artists.

 I think I got it – but now give me a medical related metaphor!

I have to believe that if the WCI designed an emergency medicine course it would be of the flavor – “in this situation administer the green pill, in that situation administer the blue pill, and if there is a lot of red stuff apply pressure here, here and here”. For a non-medic like myself this is the kind of directed no-nonsense advice I would need, and might help me to save a life. But, if you have some medical knowledge and curiosity you might only find it useful as a review or refresher and might be frustrated that the “why” has not been answered.

 It’s expensive; is it worth it?

You need to distinguish between price and value. Yes, the price is relatively high when we are used to obtaining most information on the internet for free. It should be noted that the WCI does not hide the fact that all the information is freely available on the internet and more specifically on the WCI site. You could go through blog posts, forum chat, and read personal finance books from the library. All the information is available for free.

The value in the course is in making the access to this information simple, accessible and digestible. I have seen WCI describe it as spoon-feeding. I would describe it more as having your skull cracked open and the knowledge poured in. If you have little time to do your own research and want things easy then this course could have incredible value to you.

But is the price too high? I would say that most DIY investors have made more than $500 of mistakes. I know I have. In the world of financial advice $500 is a trivial sum that might buy you a couple of hours of advice from a professional; my firm charges my time at over $1,000 an hour to clients. So I would say that the price is reasonable, and the value is high.

 Risk Free Investment

You thought the only risk-free investment was Treasury bonds huh? Well the White Coat Investor has provided a no questions 7 day return policy. If you are sitting on the fence about whether to buy it, then here is what I would do…

Buy the course and then scan through the modules for three topics where you are most unfamiliar. For me that might be; disability insurance, refinancing student loans and irrevocable trusts (but I could have chosen many more and you might choose differently). Those three videos would total around 22 minutes of viewing time, and when played at 1.5x it represents a time commitment of 15 minutes. In that time you will be able to quickly assess the style and content of the course, and establish whether the level of the material will work for you. If you are unhappy or underwhelmed in any way then return the course and move on.

 Would Actuary on FIRE buy this?

I’m not sure why I’m referring to myself in the third-person, but in my diagnostic quiz above I scored 1.5 points. I gave myself a point for #2 and a half point for #4 since I am happy with investing, but less comfortable with other areas of the course like estate planning and asset protection.

So I’m not the obvious audience for this course, but I thought it was excellent, and I learnt enough to keep me interested, and that’s an important point to emphasize.

I’m a busy person with a busy job that involves regular travel. I have three kids that I want to take skiing at the weekend, and I keep writing these goddamn blog posts that take up my time. So I don’t have the bandwidth to plough through a load of fluff, and I don’t have the time or the patience for some of the mickey-mouse personal finance material I often see. I also don’t have the stomach for inarticulate or verbose narration and repeated points. I think I spent around five hours reviewing this course, and frankly, I don’t have five hours to give to something that is shit. But I took away some good knowledge that I didn’t previously have, and I now have a reference source that I can go back to for a future refresher on some of the more detailed areas that I skimmed.

Had you presented this to me at the beginning of my career I would have bitten your hand off, but now I would view it as a nice luxury. However if my wife picks this up then I think there will be a whole new area of value-add.

My advice to you is if you scored high on the Actuary on FIRE diagnostic quiz™ then try it out!

If you purchase the course through my affiliate link then I receive a sum that helps maintain this site. You will not pay any more. Thanks!

8 thoughts on “Review of Fire Your Financial Advisor!”

    1. I received a review copy for no charge. I think it would have been churlish to try and return it!
      But had I paid for it, then I would keep it. I got value from many of the sections. I am also pretty weak on tax issues (since all my clients are tax-exempt like pension plans) so that had value to me. But the clincher for me is that my son wants to do medicine and I want to know more about student loans. If I can get him to watch the video on living like a Resident, then that will be worth the price of admission alone!

    1. There’s a limit of three Confucius comments per user and you’ve just spent one of your bullets Vagabond MD!
      😉

      1. Follow up question re: possible misplaced modifier. Is the course now a nice luxury or is it the once bitten-off hand the nice luxury? 😀

  1. Sounds a bit like drinking from a fire hydrant but I’m glad a product like this exists to some extent. As I sift through the FIRE blog grist it all seems a little too “easy”. Live cheap, drive a beater, get out of debt, save some dough, Bogelhead 3, FIREcalc till your eyes bleed… 25x pull the trigger I think something a little more rigorous is called for.

    It’s a formula, and probably a successful formula but is it THE formula? I’m not so much into do dis do dat investing unless I have a clear understanding of why it works and I’m not too busy to spend some time learning about that. That knowledge (or lack) is only going to affect the last 30-50 years of my security, my wife’s life and my kids security. Why would I fire a bonafide fiduciary financial adviser in favor of hiring a blogger to run my financial life? Yea Yea dats da ticket! Dats what I need! A blogger!

    Why do all of these blogs have a little disclaimer regarding advice?

    1. Yeah I hear you – if you think a hiring a professional is expensive, wait until you hire an amateur!

      I think a quality bona fide fiduciary financial advisor who is forward thinking and proactive would be worth their weight in gold. If you have one then stick with her/him. I was dubious about this course, but it provides a solid grounding that will probably be enough for the DIY’ers and will be supportive for those that maintain their advisor relationship.

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