Thanks everyone for the advice. Thanks KCowan and Marina for sharing your experience about universal life policies. Thank you very much jet powder for your elaborate information about credit unions. All these discussions have really increased my insight about the financial affairs and investments. I did not have and still do not have the adequate knowledge but until this time I was really lazy and did not bother to look carefully into the finances as to what the advisor was suggesting and what implications it could have on my financial health. Now, that I have started taking interest, I'm sure slowly things will fall in place. After talking to you guys, I have already questioned my advisor, so much so that now he has realized that I am no more an easy-going person as I was until this time.
I have talked to my accountant at length about the various investments and insurance I have with this particular advisor. She is going to look into everything in detail. But as I was talking to her, I also realized that most of the advisers are more or less the same. I was told that they have an advisor who would charge up to 2% of my portfolio as annual fees. Then they would advise about various investments. The money would not grow substantially; rather it would grow very slowly. My only question on this was – if the advisor is already getting of 2% of my half a million portfolio annually, how does it matter to him if my money grows or not. (Say for example - $500,000 grows to 515,000 at the end of the year, there is not much difference for the advisor at the rate of 2 %.). Even with my limited knowledge about the finances, this has been my general experience with one financial advisor I was dealing with before the current advisor. Expert unbiased advice from our friends on the forum in this regard would be very helpful to me in developing my insight about the game.
Again thanks Jet powder about the mentor issue. I live in Ontario – Hamilton/Ancaster area. I'll be more than happy to get in touch with someone who lives in this region.
One thing no one has mentioned is practice. You can set up an "imaginary" investment portfolio using fake money, and try your hand at stock picking/trading...This way you can compare how your virtual investments do against your real investments, then it is easier to decide if you should take the plunge into a DIY scenario...
Like someone mentioned up thread, you could buy the companies in those mutual funds diectly and save on fees.
One thing to be aware of is that while accountants know about taxes and balance sheets they are not always knowledgeable about investing. In fact, I know a few accountants and I would take investment advice over certain members of this board over them. However, she may be the best person to weed through whether UL is the best option for you.
I've found with investing, you can't totally trust anyone. You must educate yourself. And this is not as difficult as it sounds - if you take out one investment book per month from the library, you will probably know more about investing than 90% of the population. Here are some suggestions:
The Four Pillars of Investing by William Bernstein
Stocks for the Long Run by Jeremy Siegel
Winning the Losers Game by Charles Ellis
The Future for Investors by Jeremy Siegel
The Intelligent Asset Allocator by William Bernstein
The Investors Manifesto by William Bernstein
Investing for Dummies by Eric Tyson
The Bogleheads' Guide to Investing by Taylor Larimore
Rational Investing in Irrational Times: How to Avoid the Costly Mistakes Even Smart People Make Today by Larry E. Swedroe
There are other good books but these are the ones that initially come to mind. Reading these will likely result in a 6 figure net-worth difference for someone in your salary bracket by the time you retire.
Spidey makes a great point. Let me be clear; I was not recommending the Accountant (or Lawyer, obviously) to advise you specifically on investments - in fact quite the contrary.
The Accountant will help you from making mistakes - this is important. He/she will prevent you from making mistakes through ignorance by helping you ask questions you don't know to ask. But most importantly, he/she and a strong Lawyer will help you STRUCTURE your affairs and your chosen investments (whatever they turn out to be) properly in the context of your professional affairs, your risk tolerance, your marriage and family, and your longer-term objectives.
It is important not to confuse the value that they respective sets of folks might bring. I wouldn't go to a cardiac surgeon for anything more than general advice about bad knee. I wouldn't go to an Accountant, even a great one, for advice on how to run my business. But in terms of structure, risk mitigation, tax handling, future considerations, estate planning, liability, etc. the combination of great Accountant and Lawyer cannot be beat.
I agree with what bigdogslife is saying. I wouldn't necessarily be seeking out investment options from people selling it. With that much money I'd definitely be looking for ways to ease my tax burden and get my ducks in order that way. I know where to put my money, but with that much of it I honestly wouldn't know enough about the taxes and things like that. If I was looking to leave a nice fortune to my kids, damned if I know how to do it and do it in such a way that half of it isn't taxed away.
Again I'll spew this nonsense here so that all those in the medical prof smarten up. Physicians/doctors are what insiders go to in order to unload their unwanted stocks. Because 1: They are rich and 2: They don't have time to learn about finances.
That said, I am of he opinion that the 600k loan make sense from the tax perspective. However Iam not sure if it is properly allocated. If 600k is within 20% of your net worth, it's a fine number.
The one mistake the FA made is in pooling them all into insurance stocks and high mer ones. That is understandable from their perspective. But everything into insurance suggest someone wants to dump stock.