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They say there’s no such thing as a free lunch, but SoFi offers a free financial advisory service that might be the next best thing.
SoFi launched a service in 2018 that provides free access to financial advisors. Initially limited to SoFi investment customers, he recently opened up the service to all his SoFi members.
I first heard about the SoFi service in early 2023, when people in the personal finance group I follow started discussing the program. All inquiries about the service were flooded with comments that the service was definitely a waste of time and perhaps just an opportunity for the company to upsell other products to its users.
I am very curious and never turn down an opportunity to talk about money. So I decided to use SoFi’s Free Financial Advisor to see for myself how it works.
TL:DR: The naysayers are wrong. We’ve found SoFi’s Free Financial Advice Program to be a great tool worth using to guide you on your path to financial stability.
What is SoFi’s free CFP service?
Founded in 2011, SoFi is an online personal finance company and bank headquartered in San Francisco. SoFi offers a wide range of financial services, from bank accounts, student loans and mortgages to auto loans, credit cards and investment platforms.
For customers who use one of these services, even if they do not have an investment account with SoFi, SoFi offers a free financial planning call with a Certified Financial Planner (CFP).
Booking on SoFi’s website is easy. The form shows different dates and times for making reservations. Calls can be made via Zoom or phone and follow-up calls can be made with the same CFP who attended the initial consultation.
Is SoFi’s Free Financial Advisor Consultation Worth It?
Before I go any further, here’s a disclosure: When I made my phone appointment with SoFi Financial Advisor, I had no intention of writing a review of their service. Also, I never hinted that I was going to write this article during the consultation. .
The first reason I contacted SoFi was that my spouse and I would like to reduce our 401(k) contributions and contribute to a non-retirement investment account in order to meet my spouse’s goal of retirement in 11 years. to seek a second opinion on whether to increase the from now.
With this goal in mind, we made a reservation. The online booking process was easy. Reservations were fully available and could be booked in as little as 5 days from the date of booking.
Once you’ve selected your appointment, enter your contact information and answer seven basic personal financial questions. You will also be given the opportunity to explain what you would like to accomplish on the phone.
First call with SoFi Financial Advisor
My first call was with Greg Palmieri, CFP’s Associate Manager of Financial Planning for SoFi. He asked me to clarify what I needed help with and then gave me three options.
- He was able to answer my questions easily. Should I reduce my 401(k) contributions in order to increase my taxable contributions?
- He gave us access to RightCapital, a financial planning tool, so we could try out different donation scenarios and see which gave the best results.
- He collected all of my information, did a more detailed assessment himself, and was then able to schedule a follow-up call with me.
I chose the third option because I wanted a complete overview of the problem at hand from an outsider’s perspective. That way he would be able to answer my question with the big picture in mind.
Palmieri spent the rest of the first call collecting my financial information, but the meticulous planning I did on the phone expedited the process. I’ve shared the spreadsheet I created below.
He asked if there was anything else he needed to know about the data I provided. Not all his CFPs do this, but in my opinion this is a perfect example of the value of SoFi’s services. Among other things, I told him I didn’t keep a large cash emergency fund because I had dozens of buckets to withdraw money in an emergency and my minimum spending was less than 20% of his income. I took the opportunity to tell you.
Palmieri took the time to ask if I had everything I needed and listened so intently to my answer that on the second call I needed to stop investing and build up an emergency fund in cash, etc. I was able to give meaningful advice. .
Personal finances should be personal. If your advisor takes a one-size-fits-all approach without taking the time to listen to you, the quality of your advice will suffer.
RightCapital Financial Planning Software
Another great benefit of the SoFi service is access to RightCapital financial planning software. This alone is worth setting up a call with SoFi CFP.
No financial planning tool is perfect, but RightCapital comes pretty close. This allows you to incorporate virtually any financial variable imaginable, from inflation rates to loan balances, and see how they can impact your financial planning over time.
RightCapital is an independent third-party product used by many financial advisors and financial planners.
Follow-up call with SoFi
What really impressed me was my second phone call with SoFi. I’ve been an advocate for financial independence and early retirement for years and I can’t believe how many advisors think it’s impossible or unwise to withdraw money from your retirement account early. I guess.
Not only did Palmieri know inside and out less common strategies like the Roth IRA conversion ladder and 72
I spent several weeks discussing cutting 401(k) contributions with fellow FIRE enthusiasts. The consensus of the group was that a retirement account should be built. He answered the phone with SoFi hoping I would hear the same thing.
Palmieri put my data into RightCapital and ran Monte Carlo simulations. It is a financial analysis technique that tests different investment portfolios in different historical market scenarios to get an idea of how an investment strategy will perform under different conditions.
He told me that analysis found that not only would we pay more taxes over our lifetimes if we cut our 401(k) contributions, but the risk of portfolio value collapse increased by about 5%. rice field.
Although the calculations supported continuing to maximize contributions to tax-friendly retirement accounts, I was still concerned about the lack of flexibility in this approach. But Palmieri took the time to discuss some of my concerns, imagine a worst-case scenario, and explain the flexibility I already have in my existing retirement account.
After the call, Palmieri gave me access to RightCapital to play with the numbers and explore different scenarios in greater depth. I also had the option to schedule more follow-up calls with him if I wanted to check if there were any changes in my financial situation.
How to Prepare for a SoFi Financial Advisor Consultation
The advice you get during a call with your SoFi Financial Advisor will be much better if you do some preparatory work beforehand. Before making the first call, you should collect at least the following information:
- What are your short-term financial goals?
- What are your long-term financial goals?
- Payslips for you and your spouse (if applicable).
- Current balance of all investment accounts such as 401(k), IRA, HSA, 529. Ideally, you should also know the percentage of stocks and bonds in each balance.
- Total debt balances from all sources, plus their respective monthly payments and interest rates.
- The current balance of your savings account.
- What is your monthly savings and investment contribution?
- Estimated maximum and minimum monthly expenses.
No financial information is known without tracking. If you don’t know how much you spend each month, you should start tracking it now. Without an understanding of your monthly expenses, your financial advisor cannot give you good advice.
Budgeting apps like Mint, Personal Capital, Rocket Money, and You Need A Budget (YNAB) are great tools for tracking spending across multiple accounts and cards. I’ve been using it since 2011, and tracking my spending over time has become the most valuable habit in my personal financial arsenal.
Worksheet for Financial Advisor Consulting
I first interacted with a financial advisor in 2016. Over the years since that first appointment, I have interacted with dozens of advisors. In the process, I created a spreadsheet to store all the data they knew. In one place, please.
Going through the process of gathering this information is almost as valuable as consulting an advisor. Seeing everything in black and white can help you determine where you are already doing well and where you need to focus to improve.
Here’s a downloadable template for the spreadsheet I’m using. Please download it freely and use it according to your purpose.
Download the template here
My Judgment on SoFI’s Free Financial Advisor Service
After two 30 minute phone calls, I was so impressed with SoFi’s free financial advisor service that I would recommend it to anyone. Opening a bank account with SoFi not only gives him a sign-up bonus of $50 to $250, depending on the size of his direct deposit, but also access to consulting, in addition to a high-yield savings account. .
SoFi Financial Advisor will make sure you get the important things right. They want to build an emergency fund, pay off high-interest debt, save for retirement, maximize their employer’s 401(k) match, buy life insurance, and plan their estates. advise to
But the real test for financial advisors is what they say when presented with unique situations that test their knowledge and force them to think outside the box. This is exactly what I did and I was pleasantly surprised by Palmieri’s extensive knowledge and ability to tailor advice to exactly what I needed.
I’ve made every effort to go through this process like any normal person, but I’ve worked as a retiree and personal finance writer for over 10 years to get some regular experience. I spend each day talking about my personal financial situation, financial goals, and strategies, and it’s clear to me that I have a very solid foundation of knowledge.
SoFi Financial Advisor has never tried to persuade me to invest in SoFi or purchase any of their products. We discussed increasing my life insurance, but he didn’t refer me to anyone.
Had I been more of a novice, I can’t guarantee that SoFi wouldn’t have tried to sell me to move their investments to SoFi, but it was never mentioned in my two phone calls with SoFi. But try it yourself and let us know how it went.