AggiEE said:

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Baby Billy said:

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AggiEE said:

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Their fees before looking at mutual funds are around 1.5%

This is enormous. On a $1M portfolio that's $15,000 per year. If your real returns are estimated at 4%, they are taking nearly 40% of your expected returns every year. Highway robbery unless without them you'd be unable to stay the course or know how to allocate to basic index funds.

Are you getting that level of service?

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There's a hell of a lot more that goes into your total return over the course of your life than baseline account performance. Asset location, tax efficiency/loss harvesting, distribution order, avoiding planning mistakes, behavior during down markets, etc. All of these things impact your total return and are completely separate from how the actual investments performed. If any combination of these is at least 1% better than you could do on your own, then a 1% AUM fee could make sense for that person.

Time, record keeping, and coordination with your CPA and Estate Attorney on your behalf is also worth something to some.


Again, if you want to stick everything into the S&P 500 and are capable and have the desire to do all of these things yourself, then don't bother with an FA. If you want that type of advice but want to handle all the execution on your own, find someone that charges a flat fee.


Bottom line, there is plenty of value in a *good* FA that is actually doing all of these things. Some people are willing to pay for that and others aren't. Just like any other service on the planet.

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The biggest driver of returns will be asset allocation, behavior, and time.

These other factors such as tax optimization, tax loss harvesting, etc come nowhere close to 1.5% annually.

Secondly, why should advice on what accounts to prioritize and funds to use cost an annual fee if all you need advice on is how to set things up?

It is not difficult to tell somebody to prioritize tax sheltered accounts and invest in index funds and don't market time….and that is one sentence that covers almost all of what you actually need to know

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Yes, the overwhelming majority of people on the Texags Investing board are fully capable of making rational decisions, which is why the conversation always goes this way when it's brought up here. The average person is not. There are plenty of studies that prove this.

Frok…

Where is the portfolio YTD? S&P is up 15% as a gauge.

I've had my portfolio managed by Schwab, and I terminated them after a year. I'm not criticizing managed portfolios, it's just different for each individual.

Can you provide some info please? TY.

Frok said:

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Hey all, looking for some advice.

Five years ago, a friend convinced me to consolidate my old 401(k)s into an IRA. I wasn't managing my money strategically, so I agreed.
He later left Edward Jones, and now I have an advisor I don't know. This advisor keeps asking for in-person meetings to keep managing my account. I'm too busy, so now the account is "unmanaged"whatever that means.
Now I'm wondering:

Should I leave the money where it is?
Or move it to a new IRA and manage it myself?

I'm also switching jobs in January, which means I'll have another 401(k) sitting idle with no new contributions.

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Fire his ass tomorrow morning.

I'd probably do one of a few things OP:

1) Manage the money yourself. If you don't want to pay any fees you can probably put it in an index fund like VTI or many other options and you'll do as good or better performance wise than most people do. You won't get much in the way of strategic planning and tax advice though.
2) Change to a fee only firm that offers more investment options and tax advice and preparation. You'll probably pay 1% or more but you'll have access to more investment options and get proactive tax advice and planning. Also no commissions or mutual fund or annuity sales etc if you choose a fee only advisor so generally less conflict of interest.

But I wouldn't just sit on your hands and do nothing.

OP is missing in action on this thread but I would love to know two things:

1) what funds your friend put you in (don't need to see balances just a list of the funds)
2) is your friend still a financial advisor just working for a different company

S&P is up 16.2% YTD.

If the portfolio is up 10+ percent there's no issue in my opinion. But that's just me.

I'm still here, I haven't done anything due to Christmas and closing my old job out. I'm going to pull up some details in my account to look at the performance per the comments here.

The reason I don't want to go in person is exactly as some have stated, it's more of a sales pitch and by being there he can control the message. I don't want to be upsold, I want advice and help.

However, I will do it and hear the guy out, probably report back here for advice.

You should just go there with a list of questions. But if you're already starting out with the bad feelings like you're dealing with a sale pitch you may want to look elsewhere.

Please post the mutual funds he put you in

Frok said:

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I'm still here, I haven't done anything due to Christmas and closing my old job out. I'm going to pull up some details in my account to look at the performance per the comments here.

The reason I don't want to go in person is exactly as some have stated, it's more of a sales pitch and by being there he can control the message. I don't want to be upsold, I want advice and help.

However, I will do it and hear the guy out, probably report back here for advice.

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Nothing wrong with hearing the guy out.
Worst case is that you lose a few hours of your day dealing with his sales pitch. Your perfectly reasonable answer at the end of this should be that you need to discuss it with the spouse and you'll sleep on it.