The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: OzzieandHarriet on May 25, 2018, 03:37:15 PM
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We went to talk with a financial advisor firm today that works with a lot of people at my husband's workplace. They offer all kinds of great-sounding things: investment management, financial planning, and tax services, and can hook you up with people to do estate planning (wills, etc.). But the fees they charge, though I know they are standard for the industry, seem like a lot of money: more than $20k per year for what we have currently. When we were listening to the sales pitch today, it all sounded good, but the actual dollar amounts it would cost are giving me pause. They do offer financial planning for a straight fee (~$5k).
My question is: do any of you savvy people use any services from one of these firms, and if so, has it been worth it?
We are 60 and 58, I'm essentially retired, husband is hoping to go to some sort of part-time status this year and ease out of his job over next couple of years. We have about $2 million in retirement savings, a paid-off house, and no debts. No kids.
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No way I'd ever pay a percentage-based fee for financial advice. I'm sure you can find a fee-only fiduciary for much less than $5k too. Steer well clear of that firm!
See also: JL Collins on advisors (http://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/)
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I'll call myself savvy and say no, I don't use them and wouldn't at that rate. I do everything myself, although I'll probably pay for some fee-only tax planning advice from a CPA at probably $250 per hour.
If your situation is simple, then I think you can do it yourself too. Read books, research things, and over time you'll figure out a good plan. And at that point, if you still want to hire help, you'll at least know better what questions to ask and what products and services you need and those you may wish to avoid.
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Several years ago we paid a flat fee for a one time review of our situation.
They did a fine job, but from our perspective it gave us the confidence that we really did have things set up well and could handle our own.
And $5K does seem unnecessarily high, unless you have family owned businesses or other complications.
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Okay, but if ALL of these companies charge similar fees, some people must find what they do useful.
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Waste of money.
Doing the math, it sounds like your portfolio size is similar to mine. I would never consider one of these clowns to do the 15 minutes worth of rebalancing needed a year that I do myself. That's like $80k per hour.
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Okay, but if ALL of these companies charge similar fees, some people must find what they do useful.
I don't follow this logic. I think this just informational asymmetry. Fear of the unknown is big for business in financial circles. Your demand curve is opposite of normal for this product! If the going fees were 10k instead of 5k, would that make you more anxious you need advice? If the same advice is $500, do you then feel more secure or to look into it yourself?
Others have pointed out if your situation is complex paying by the hour could be a good move. And do similarly (paying for an hour or two of time) if it makes you feel better just to have someone in a suit tell you "you're good" rather than Internet strangers.
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I would never pay the flat 1% of assets under management (AUM) that has been pretty standard in the past. I think this model is going away, especially with all the Roboadvisor services charging much less (I believe Betterment is around 0.25%, for example).
I personally use a firm that is a member of the Alliance of Comprehensive Planners (https://www.acplanners.org/about-us/acp-planners). They use a Retainer Model which includes many factors, but you pay a set fee per year with unlimited consultations. In my case it works out to about 0.5% of AUM. They are fee-only, so they don't get paid to sell you anything. 0.5% is still a lot, but my tax situation is complex, and the retainer includes tax planning, financial planning, tax return preparation, investment management, etc, so I find it worthwhile for now.
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Some firms are "fee only firms", and their advice has a fixed price. The advantage there is they won't try to "up sell" you into a percentage fee plan.
I suspect the estate planning is the key detail. But if you are taking a package deal, how can you select the best lawyer? That should be something where you shop around and decide for yourself. Maybe with estate planning out of the way, you'll feel more relaxed? Many lawyers offer reduced fees for the initial consultation (or free) so you can find one you like.
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I would never pay the flat 1% of assets under management (AUM) that has been pretty standard in the past. I think this model is going away, especially with all the Roboadvisor services charging much less (I believe Betterment is around 0.25%, for example).
I personally use a firm that is a member of the Alliance of Comprehensive Planners (https://www.acplanners.org/about-us/acp-planners). They use a Retainer Model which includes many factors, but you pay a set fee per year with unlimited consultations. In my case it works out to about 0.5% of AUM. They are fee-only, so they don't get paid to sell you anything. 0.5% is still a lot, but my tax situation is complex, and the retainer includes tax planning, financial planning, tax return preparation, investment management, etc, so I find it worthwhile for now.
Betterment is .25% up to 2 million. So they never charge more than 5k. I'm sort of on the fence for this since that is 8% of what you could take out by then.
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If you have $2million in assets, there is a chance that you could get your money's worth -- if you get free trust and estate advice, CPA advice, cross border tax advice, excellent financial planning and management, including access to private equity funds / tax advantaged funds not available on the general market, for your situation.
There is a reason people with $20 Million in assets hire dedicated firms to manage their money, after all.
At the end of the day, however, the 1% fee you were quoted is likely just industry standard, and not reflective of $250/hr of effort that they would do on your behalf. Use that as your benchmark. Are you getting at least 80 hours of effort PER YEAR for your 1% fee?
Reference:
-- Currently, I charge flat rate, at $150/hr startup, moving to $200/hr whenever I can --
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Okay, but if ALL of these companies charge similar fees, some people must find what they do useful.
The average consumer is stupid. They THINK that advisors are supposed to time the market. Timing the market is a fools game. Don't pay for an asset manager to constantly hold your hand because all you do is hold and rebalance when your bond / stock allocation ration become out of wack. Asset managers also try to make investing seem complicated. It isn't. Nothing wrong with picking 2 index funds -- total bond market and total stock market. Done.
So if you need money help you should be paying on a one-time basis just to come up with a "game plan" -- No hand holding over time. If you pay them 1% over them then the 4% rule becomes the 3% rule. Then you run out of money. 1% makes a huge difference down the line.
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These 'advisors' are generally parasites, albeit sometimes well meaning.
If you have such a large stache you'll get free advisory services from Vanguard directly, and it sounds like you have a lot more than $1 million.https://investor.vanguard.com/investing/benefits/flagship (https://investor.vanguard.com/investing/benefits/flagship)
Investors with $1 million to $5 million*
You're a Flagship client at Vanguard, which means you get personalized services reserved for our high-net-worth investors.
Helping you look at your wealth holistically is important to us. As a Flagship client, you'll have exclusive resources available to you, including Vanguard professionals who can help you meet your investment and wealth management needs.
These include specialists in areas like estate planning, trust services, financial planning and advice, and philanthropy.
Exclusive benefits
When you call, you'll speak with an experienced Flagship representative who will act as your guide to all the services we offer our high-net-worth clients. Whenever you're facing a complex situation or change in circumstances, a dedicated representative will coordinate personalized, expert help that's tailored to your needs.
In addition to commission-free Vanguard mutual funds and ETFs (exchange-traded funds), you'll also have access to these important benefits:
• Financial advice from a Certified Financial Planner™ professional through Vanguard Personal Advisor Services®—anytime. Our advisors can help you with specific investment questions or provide ongoing advisory and portfolio management services.
• Even bigger discounts on your brokerage costs, including 25 commission-free trades for stocks, options, non-Vanguard ETFs, and transaction-fee funds.**
The whole "1%" fee thing is so clever in it's deception. If we assume average nominal portfolio returns pretax of ~9% per year, then that actual advisory fee is over 11% of your returns. Every year.
If I signed you up, I'd be popping champagne with my sales colleagues and regaling them on how I managed to land such a big fat fish.
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You got to $2mm in assets, presumably without one of these fancy 1% advisors. Why do you need one now?
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I would never pay the flat 1% of assets under management (AUM) that has been pretty standard in the past. I think this model is going away, especially with all the Roboadvisor services charging much less (I believe Betterment is around 0.25%, for example).
I personally use a firm that is a member of the Alliance of Comprehensive Planners (https://www.acplanners.org/about-us/acp-planners). They use a Retainer Model which includes many factors, but you pay a set fee per year with unlimited consultations. In my case it works out to about 0.5% of AUM. They are fee-only, so they don't get paid to sell you anything. 0.5% is still a lot, but my tax situation is complex, and the retainer includes tax planning, financial planning, tax return preparation, investment management, etc, so I find it worthwhile for now.
Betterment is .25% up to 2 million. So they never charge more than 5k. I'm sort of on the fence for this since that is 8% of what you could take out by then.
.25% is a lot of money to pay over your life time- if you retired with 2MM and withdraw 80k per year and put your money in betterment - you would pay
30 years - 514k
40 years - 1.1MM
50 years - 2.2MM
So most here who are FIREing in their 30's or 40s will likley need their money to last over 50 years. you would pay betterment more than what you saved to manage your money for you - its completely not worth using.
https://www.begintoinvest.com/expense-ratio-calculator/
here is a calculator you can go see what you're wasting.
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I would never pay the flat 1% of assets under management (AUM) that has been pretty standard in the past. I think this model is going away, especially with all the Roboadvisor services charging much less (I believe Betterment is around 0.25%, for example).
I personally use a firm that is a member of the Alliance of Comprehensive Planners (https://www.acplanners.org/about-us/acp-planners). They use a Retainer Model which includes many factors, but you pay a set fee per year with unlimited consultations. In my case it works out to about 0.5% of AUM. They are fee-only, so they don't get paid to sell you anything. 0.5% is still a lot, but my tax situation is complex, and the retainer includes tax planning, financial planning, tax return preparation, investment management, etc, so I find it worthwhile for now.
Betterment is .25% up to 2 million. So they never charge more than 5k. I'm sort of on the fence for this since that is 8% of what you could take out by then.
.25% is a lot of money to pay over your life time- if you retired with 2MM and withdraw 80k per year and put your money in betterment - you would pay
30 years - 514k
40 years - 1.1MM
50 years - 2.2MM
So most here who are FIREing in their 30's or 40s will likley need their money to last over 50 years. you would pay betterment more than what you saved to manage your money for you - its completely not worth using.
https://www.begintoinvest.com/expense-ratio-calculator/
here is a calculator you can go see what you're wasting.
Yeah but if betterment gets me to save more, save a bit with their features, and just enjoy the process a bit moar, I say its worth it. The other caveat you would have to calculate is how much you earn overall. If my life time returns are like 10 - 20 mill, and I have to pay 2 mill. I won't mind.
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I would never pay the flat 1% of assets under management (AUM) that has been pretty standard in the past. I think this model is going away, especially with all the Roboadvisor services charging much less (I believe Betterment is around 0.25%, for example).
I personally use a firm that is a member of the Alliance of Comprehensive Planners (https://www.acplanners.org/about-us/acp-planners). They use a Retainer Model which includes many factors, but you pay a set fee per year with unlimited consultations. In my case it works out to about 0.5% of AUM. They are fee-only, so they don't get paid to sell you anything. 0.5% is still a lot, but my tax situation is complex, and the retainer includes tax planning, financial planning, tax return preparation, investment management, etc, so I find it worthwhile for now.
Betterment is .25% up to 2 million. So they never charge more than 5k. I'm sort of on the fence for this since that is 8% of what you could take out by then.
.25% is a lot of money to pay over your life time- if you retired with 2MM and withdraw 80k per year and put your money in betterment - you would pay
30 years - 514k
40 years - 1.1MM
50 years - 2.2MM
So most here who are FIREing in their 30's or 40s will likley need their money to last over 50 years. you would pay betterment more than what you saved to manage your money for you - its completely not worth using.
https://www.begintoinvest.com/expense-ratio-calculator/
here is a calculator you can go see what you're wasting.
Yeah but if betterment gets me to save more, save a bit with their features, and just enjoy the process a bit moar, I say its worth it. The other caveat you would have to calculate is how much you earn overall. If my life time returns are like 10 - 20 mill, and I have to pay 2 mill. I won't mind.
how would it get you to save more i litterally just showed you what it cost and that it would be more
i dont even know what to say to someone who cares this little about money. if your returns are 10MM and you pay someone 20% of that you're happy
this is just an absurd statement.
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You got to $2mm in assets, presumably without one of these fancy 1% advisors. Why do you need one now?
Well, I'll tell you why: my husband is very nervous about leaving his job and living off of our savings. He at least wanted to check out what this type of service was all about, but he decided it's too expensive. (I agree.)
Saving up the stash was pretty easy, but figuring out how to maintain it and spend it while no longer adding to it is new territory.
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You got to $2mm in assets, presumably without one of these fancy 1% advisors. Why do you need one now?
Well, I'll tell you why: my husband is very nervous about leaving his job and living off of our savings. He at least wanted to check out what this type of service was all about, but he decided it's too expensive. (I agree.)
Saving up the stash was pretty easy, but figuring out how to maintain it and spend it while no longer adding to it is new territory.
https://www.madfientist.com/how-to-access-retirement-funds-early/
https://www.madfientist.com/safe-withdrawal-rate/
This is a fun tool to play with different withdrawal strategies.
http://www.cfiresim.com/input.php
Personally i'm planning a variable withdrawal method for the first 5-10 years where we only adjust our withdrawals down if its a bad market - the other good withdrawal strategy is reverse equity glide path where you start with 50-70% bonds and slowly move to 100% stocks over a certain number of years.
at the end of the day you're probably perfectly safe withdrawing 80k a year from you 2MM stash. You likely have SSA coming in short order as well. If you arent spending 80k a year then you're going to be even safer
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You got to $2mm in assets, presumably without one of these fancy 1% advisors. Why do you need one now?
Well, I'll tell you why: my husband is very nervous about leaving his job and living off of our savings. He at least wanted to check out what this type of service was all about, but he decided it's too expensive. (I agree.)
Saving up the stash was pretty easy, but figuring out how to maintain it and spend it while no longer adding to it is new territory.
Kicking the tires of a financial advisor is normal. Many people have taken a look at it at some point (myself included). I currently have some money with an adviser; my wife has been dealing with him for 20? years. I'm not proud of it, its just how we live our lives, . Several years ago I made a reasonable compromise, I would compare accounts over a 5 year period and see who did better. This satisfied my spouses concerns and my own, the argument boiled down to emotional concerns which are hard to resolve instantly. Its well under 10% of our investments with a financial adviser, I'm not aware of any rule saying you have to give them 100% of your investments.
For all those suggesting its going to cost $20,000/year, thats called exageration. Its 1% of whatever you transfer in; so it will cost up to $20k but could be $1000. I'm not suggesting you take this route, I just don't like exageration.
If you struggle with budgets, maintaining asset allocation, self control in downturns (a good advisor will talk you out of selling in 2008), or otherwise exhibit behaviour that is potentially self destructive; then get an advisor. An advisor takes the role of a parent when it comes to money, some people need that (even at 60 years old, we're all still kids at heart). Requiring parental hand holding is necessary for some people, the worst is the people who skip an advisor and show up on the Antimustachian wall of Shame.
I don't think you show any signs of needing an advisor. However, feel free to check a couple more out and see for yourself that they all say the same things and won't offer you much. I highly recommend multiple free consultations to talk yourself out of it.
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You got to $2mm in assets, presumably without one of these fancy 1% advisors. Why do you need one now?
Well, I'll tell you why: my husband is very nervous about leaving his job and living off of our savings. He at least wanted to check out what this type of service was all about, but he decided it's too expensive. (I agree.)
Saving up the stash was pretty easy, but figuring out how to maintain it and spend it while no longer adding to it is new territory.
Kicking the tires of a financial advisor is normal. Many people have taken a look at it at some point (myself included). I currently have some money with an adviser; my wife has been dealing with him for 20? years. I'm not proud of it, its just how we live our lives, . Several years ago I made a reasonable compromise, I would compare accounts over a 5 year period and see who did better. This satisfied my spouses concerns and my own, the argument boiled down to emotional concerns which are hard to resolve instantly. Its well under 10% of our investments with a financial adviser, I'm not aware of any rule saying you have to give them 100% of your investments.
For all those suggesting its going to cost $20,000/year, thats called exageration. Its 1% of whatever you transfer in; so it will cost up to $20k but could be $1000. I'm not suggesting you take this route, I just don't like exageration.
If you struggle with budgets, maintaining asset allocation, self control in downturns (a good advisor will talk you out of selling in 2008), or otherwise exhibit behaviour that is potentially self destructive; then get an advisor. An advisor takes the role of a parent when it comes to money, some people need that (even at 60 years old, we're all still kids at heart). Requiring parental hand holding is necessary for some people, the worst is the people who skip an advisor and show up on the Antimustachian wall of Shame.
I don't think you show any signs of needing an advisor. However, feel free to check a couple more out and see for yourself that they all say the same things and won't offer you much. I highly recommend multiple free consultations to talk yourself out of it.
20k per year is 1% of 2MM this is in no way shape or form an exaggeration.
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You got to $2mm in assets, presumably without one of these fancy 1% advisors. Why do you need one now?
Well, I'll tell you why: my husband is very nervous about leaving his job and living off of our savings. He at least wanted to check out what this type of service was all about, but he decided it's too expensive. (I agree.)
Saving up the stash was pretty easy, but figuring out how to maintain it and spend it while no longer adding to it is new territory.
Kicking the tires of a financial advisor is normal. Many people have taken a look at it at some point (myself included). I currently have some money with an adviser; my wife has been dealing with him for 20? years. I'm not proud of it, its just how we live our lives, . Several years ago I made a reasonable compromise, I would compare accounts over a 5 year period and see who did better. This satisfied my spouses concerns and my own, the argument boiled down to emotional concerns which are hard to resolve instantly. Its well under 10% of our investments with a financial adviser, I'm not aware of any rule saying you have to give them 100% of your investments.
For all those suggesting its going to cost $20,000/year, thats called exageration. Its 1% of whatever you transfer in; so it will cost up to $20k but could be $1000. I'm not suggesting you take this route, I just don't like exageration.
If you struggle with budgets, maintaining asset allocation, self control in downturns (a good advisor will talk you out of selling in 2008), or otherwise exhibit behaviour that is potentially self destructive; then get an advisor. An advisor takes the role of a parent when it comes to money, some people need that (even at 60 years old, we're all still kids at heart). Requiring parental hand holding is necessary for some people, the worst is the people who skip an advisor and show up on the Antimustachian wall of Shame.
I don't think you show any signs of needing an advisor. However, feel free to check a couple more out and see for yourself that they all say the same things and won't offer you much. I highly recommend multiple free consultations to talk yourself out of it.
20k per year is 1% of 2MM this is in no way shape or form an exaggeration.
1% of $100,000 is $1000... Where did it say that the entire portfolio needs to be with a single advisor? Where did it say that the OP couldn't put 5% with an advisor, I pointed out that I did something similiar.
I agree with you, $20k is substantial. I just showed how to do it for a fraction of the fees...so if I can do it for $1000, so can the OP.
I agree its not a great idea. I think the OP should examine all options and come to a conclusion for their specific situation. Jumping to the assumption that they had to transfer 100% of their retirement is incorrect.
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Wtf is the point in putting 100k with an advisor.putting a small portion with an advisor makes 0 sense. You either think they are going to be better for you or not putting 5-10% of your money with them accomplishes next to nothing.
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This is litteraly the worst argument I think I've ever heard. See it's cheaper. Yeah if you put one cent with them you pay a fraction of that a year so why not do that.
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TheHusbandHalf and I, (62, 60) 9 years ago hired Fidelity to take care of things. It's under 1% but I don't know off hand what the fee is. He handled stuff up until then. He can do many things well, carpentry, plumbing, HVAC, electrical. siding, etc, almost to the expert level, but he is no where near that level taking care of our money. Plus, he does not have the time to learn to the level a professional does.
We thought, one wrong move we made would more than be worth the pay they get. Their fee goes lower as our money goes higher. We have been very happy with them.
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Hey WifeHalf. It is time to take a look. You could be paying a low advisor fee, but then you get put into higher MER funds with Fidelity, as well, creating much more than 1% fees, net.
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You got to $2mm in assets, presumably without one of these fancy 1% advisors. Why do you need one now?
Well, I'll tell you why: my husband is very nervous about leaving his job and living off of our savings. He at least wanted to check out what this type of service was all about, but he decided it's too expensive. (I agree.)
Saving up the stash was pretty easy, but figuring out how to maintain it and spend it while no longer adding to it is new territory.
A short, readable book that you might find useful is Darrow Kirkpatrick's "Can I Retire Yet?" You can buy it through Amazon, or through his website of the same name, which has clearly written posts on all kinds of decisions that early retirees face.
(I agree with most everyone here: I've heard those pitches too, but I think 1% is too much to pay, and with some study, you can probably figure out how to manage your money very well yourself. I would hire a good lawyer to help with your estate planning, a good CPA to help with tax planning, and a fee for service financial advisor as needed.)
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If one really must have someone managing their funds, Vanguard Personal Advisor Services only charges .30% of your portfolio.
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So we recently paid $2500 for a "second opinion" well a third opinion actually. So even though I've been managing our finances for the past 20 years with no issues, now with pending ER hubby doesn't believe me or has doubts, whatever. So a year ago I pay a visit to our free Fidelity guy at my workplace (we have free access to Fidelity person on staff at work by appt). He runs all of our numbers, is impressed, says we are good. That wasn't good enough so this year we hire a financial adviser, they do the whole in-depth work up and tell me what I already knew, we're good. So of course they want us to move assets to them to be managed - they must be high !!! 1.75% annually !! LOL - Even on $1M - $17,500/year?? Please - that's three European vacations right there!! Trying now to convince hubby that it's a complete waste and to not proceed.
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So we recently paid $2500 for a "second opinion" well a third opinion actually. So even though I've been managing our finances for the past 20 years with no issues, now with pending ER hubby doesn't believe me or has doubts, whatever. So a year ago I pay a visit to our free Fidelity guy at my workplace (we have free access to Fidelity person on staff at work by appt). He runs all of our numbers, is impressed, says we are good. That wasn't good enough so this year we hire a financial adviser, they do the whole in-depth work up and tell me what I already knew, we're good. So of course they want us to move assets to them to be managed - they must be high !!! 1.75% annually !! LOL - Even on $1M - $17,500/year?? Please - that's three European vacations right there!! Trying now to convince hubby that it's a complete waste and to not proceed.
paying 2500 for a second opinion to convince SO makes a ton of sense. seems like you've done your diligence not sure why you're husband isnt onboard with you continuing to run the finances vs paying some one almost half your SWR.
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DH likes credentials I guess?? I honestly don't know what's up I think its just cold feet. I also think with time he'll come around. Things need to sink in with him if they weren't originally his idea.
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TheHusbandHalf and I, (62, 60) 9 years ago hired Fidelity to take care of things. It's under 1% but I don't know off hand what the fee is. He handled stuff up until then. He can do many things well, carpentry, plumbing, HVAC, electrical. siding, etc, almost to the expert level, but he is no where near that level taking care of our money. Plus, he does not have the time to learn to the level a professional does.
We thought, one wrong move we made would more than be worth the pay they get. Their fee goes lower as our money goes higher. We have been very happy with them.
Bullshit
Taking care of retirement investments is way easier than electrical, plumbing, brushing your teeth or tying your shoes. Look to Fidelity's own study of it's 401k holders. They wanted to know what things those with the best outcomes (most gain) over time did. Those with the absolute gains........were dead. You don't think your husband can act like a dead person and just leave the investments alone? Ok then.....pay money for some clown to pick out his next BMW that you'll be paying for.
Sorry for such a rant, but the whole thought that managing money is this big complicated thing is just so wrong. I'm no financial wizz (I'm an engineer), and the only things I needed to know was to look at the expense ratios, decide what asset allocation I wanted and then place investments appropriately (aka, you put bonds and international in tax advantaged accounts and equities in taxable). If you want, rebalance to your AA once a year. That's all of 15 minutes. Or do nothing. And when I die? My instructions to my wife are: When you need money, take it out of whatever account you want. Take RMDs as the institutions' letters tell you to. The end. It's not optimal, but who cares. Even if she takes money out of the worst possible accounts, it's cheaper than hiring a clown to "manage" (steal) your money.
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yep i find it incredibly hillarious people think some person is actually benefitting them.. the number one and number 2 things you can do is not change your AA due to market conditions and minimize your fees - depending on the level of those fees it could be number 1 or number 2 - how exactly does an advisor help you out in either of these cases.
fees- 0% chance they fail here only negative value add
not selling - market crashes and you want to sell - most advisors will just do what you say they dont care they'll move your money to a fixed asset class or less risky and keep their 1% commission.
so your advisor benefits you how exactly?
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It seems like you'd be much better off just finding experts to handle these issues for you?
Find a lawyer to draft wills and trusts.
Get a CPA.
At worst, you're looking at a few hundred per hour, but likely under 5 hours a year total (unless you've got some complicated issues you haven't mentioned). At worst you're out a couple thousand dollars, but you were able to pick your own expert as opposed to whatever roulette wheel you get with the advisory package.
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Why do we stay with them?
It's been growing more than twice what we spend each year and add another year with the money from TheHusbandHalf's paycheck - we're happy. (what we actually spend is kept in a savings/checking account)
See, that's enough. We don't join in to the 'whoever dies with the most wins' game. We watch what they do, talk to them 4/yr scheduled, more if WE want.
I have relatives that have lost big time to financial planners they have chosen, and a couple of guys THH works with, same thing. I do not have a fear of something like that happening. We sleep well.
Something the guy asks every year, is the % growth we want. He's spot on each time.
Really, that's enough.
By chance we learned that they hire from this podunk school system, and the county over, and to be honest, that moves them up a notch in our eyes. These people are not involved in any way with OUR money, they are in some other department.
THH and I have talked about some of the issues that have been mentioned. One of the things we talked about was having money left to give to a charity, to our kids, or having little left. The way we looked at it, sure, they're making $ from us, but we are happy with the amount. Helping to pay people that lived around here when they were younger, and I'm sure others from little towns, so they are employed vs a charity when we die? It's one of the choices we made. We have a few charities mentioned in our will, if there's ANYTHING LEFT.
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Why do we stay with them?
It's been growing more than twice what we spend each year and add another year with the money from TheHusbandHalf's paycheck - we're happy. (what we actually spend is kept in a savings/checking account)
See, that's enough. We don't join in to the 'whoever dies with the most wins' game. We watch what they do, talk to them 4/yr scheduled, more if WE want.
I have relatives that have lost big time to financial planners they have chosen, and a couple of guys THH works with, same thing. I do not have a fear of something like that happening. We sleep well.
Something the guy asks every year, is the % growth we want. He's spot on each time.
Really, that's enough.
By chance we learned that they hire from this podunk school system, and the county over, and to be honest, that moves them up a notch in our eyes. These people are not involved in any way with OUR money, they are in some other department.
THH and I have talked about some of the issues that have been mentioned. One of the things we talked about was having money left to give to a charity, to our kids, or having little left. The way we looked at it, sure, they're making $ from us, but we are happy with the amount. Helping to pay people that lived around here when they were younger, and I'm sure others from little towns, so they are employed vs a charity when we die? It's one of the choices we made. We have a few charities mentioned in our will, if there's ANYTHING LEFT.
the bolded parts in this statement make no sense.
and the second bolded part i'd love to be your financial advisor if you're not making out landish requests.
ie 2013 we'd like our money to grow at 10% - see look it grew at 10% i got 23%
2008 - well it lost 39% sorry its just what the market did.
how one can spend all their life learning how to make money and then just thinking some other human being taking 1% has their best interst in mind is maybe the dumbest move one can make financially.
1% effectively lowers the SWR by 1% so now you're at a 3% SWR just b/c you didnt want to learn - and as stated above its something that takes little to no effort or time.
and from your statements its clear you have no idea whats going on with your money or a true understanding for how it grows or what happens to it.
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the bolded parts in this statement make no sense.
I'm sorry, I did not make myself clear. I forget sometimes others do not have a brain that works like mine does. We spend x each year. Our Fidelity account value grows AT LEAST 2 x, + 1x that THH has put in from his paycheck. Plus, we get x, or a little more, from his paycheck in our checking/savings account.
and the second bolded part i'd love to be your financial advisor if you're not making out landish requests.
I think this is another case of our brains thinking differently, this sentence was not clear to me.
I should have typed that it's usually that percent, if not more.
ie 2013 we'd like our money to grow at 10% - see look it grew at 10% i got 23%
2008 - well it lost 39% sorry its just what the market did.
how one can spend all their life learning how to make money and then just thinking some other human being taking 1% has their best interst in mind is maybe the dumbest move one can make financially.
I would not expect the F guy to know how to manage the board at an oil refinery, but he pays for my husband every time he buys gas. He is not just 'some other human being', he has training, like my husband has training to sit in front of 5 computers and tell people what to do.
1% effectively lowers the SWR by 1% so now you're at a 3% SWR just b/c you didnt want to learn - and as stated above its something that takes little to no effort or time.
Like I said, it's not 1%. F has combined our accounts because they know I am not employed, and the money I have comes from THH, so the % is lowered as if it was one account.. On some accounts, we are at 4, others, 7. Really, that's enough. There's enough there, assuming it never gained or lost, to last us 120 years. Really, that's enough.
and from your statements its clear you have no idea whats going on with your money or a true understanding for how it grows or what happens to it.
That is precisely why we hired Fidelity to manage it. The things we know how to do, we do ourselves, in general. Those we don't know, we hire someone who does.
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LAS made my point for me above in a better way - just b/c your accounts are growing 2x what you're spending really means jack shit in the grand scheme of things esp with the bull market we have - again thats why i said the statement is non sensical and contains 0 context - the percent ROI each year or avg YoY would be a better statement to determine what you're making.
and LAS also filled you in on the fees you're really paying which are over 1% most likely. so you'd better be planning on a sub 3% SWR with that advisor "helping" you. advisors are such a joke.
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Just thought I'd chime in...
First, no one can tell you what to do with your money. That being said I think you are making a few unsupported assumptions and have an incomplete view of what a financial advisor actually does.
First, I have first hand knowledge of the Fidelity fee structure for PAS managed accounts (I helped a relative get out of managed accounts). Essentially fidelity charges a an annual marginal rate on the value of the account just like a tax system. You are charged 1.7% for the first 200K, 1.6% for the next 100K, and on down the line to 0.85% for amounts over $2M. I think most folks will have gross fee somewhere in the range of 1.25-1.55% for PAS. However, the way fidelity hides this is that the rebate you the ER for the funds that they invest in which comprise fidelity funds and SAI funds (which has a fee sharing relationship with Fidelity). So although you look at your account and they are only withdrawing say 0.6-0.75% in cash, this is only part of your total fee. You must include also the fees of the underlying funds to determine your true total investment fees. Also, with the relative I was working was a couple and the H&W were being treated as separate clients, so their fee structures and accounts were basically being managed separately even though they had a combined conference.
Further the fact that your accounts have been growing at "twice what you spend each year" does not instill confidence. Over the past 10 years we have had an amazing bull market, and virtually no inflation. However, the bull market sours or inflation picks up, you could find that you are consuming much more of your pie than you had thought. In no way will the added draw of fees help you with this.
That your guy asks you the % growth you want each year and is spot on is a little fishy, to me. It is not possible for an investment advisor to predict the future and tell you what your returns will be. Perhaps he is estimating within a range? Also markets produce returns, investment advisors don't.
Thank you for the information. You are getting into some things that are beyond my comprehension.
Please know, we are happy with how our F accounts are managed. Really, it's enough. These accounts are part of our retirement money so we did not want to take the chance at managing it ourselves. Of course we expect them to make money, with the info you've given, it's probably .85% - not unrealistic to me - really, it's enough.
Someone above said they would love to be our financial planner. We are happy with the growth of the accounts and when people say they would love to be our planner, my thoughts go to the relatives and THH coworkers that had their money stolen - just makes me feel more secure with our choice.
Like I said, thank you for the info
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Wtf is the point in putting 100k with an advisor.putting a small portion with an advisor makes 0 sense. You either think they are going to be better for you or not putting 5-10% of your money with them accomplishes next to nothing.
Slow down a second. The point is psycholgical, not mathematical.
What some people need is a demonstration, the advice isn't intended for you, but I'll try to explain it. If a person has a psychological hangup, repeatedly telling them they're wrong or crazy or make no sense is not going to help. What does help is trying to understand their views and working with them. If the husband feels that strongly, then moving $100,000 and paying $1000 in fees over a year would demonstrate its useless. Its not about being optimal, its about getting past the hangup so the couple in question can retire already. If they had done this 3 years ago, they would alreay have the experiment finished and the husband would already be retired.
Instead, the OP paid $2500 to attempt to accomplish the same thing. Whats better, spending $2500 or doing a trial and spending $1000? How much more money will be wasted in the convincing? As the story unfolds it sounds like my advice would have saved $1500; I'll agree with boarder that its still a waste but the point is to minimize damage.
OP - try to understand your husbands hangup and work with him. He's not ignorant, he understands the math. Often in the quest for perfection we overlook mediocre solutions that will work. My solution is mediocre, but its one path towards the real goal which is to get you retired in the shortest time possible.
Talk it over with the husband, if it gets him to retire, its the best $1000 you'll ever spend. In all the arguments, lets not overlook the purpose of all the discussion, its not about spending, its about getting the husband to retire. I fail to see how this entire discussion about fees will convince him to retire, if he were to read this thread, how would that help him retire sooner?
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My husband is a smart engineer who is on board with FIRE, but he too wants the second opinion of someone professional to make sure we aren’t missing anything. Several years ago we tried a phone consultation with a USAA advisor (since we are members). Most of the time was spent trying to hack the advisor’s online retirement calculator to account for the fact that our savings rate was higher than the max the took would go. In the end he told us we were doing great and asked if we were interested in adopting a 40-year old man. :) Flattering, but not helpful.
Now I’d like to find someone who know the idea of FIRE and can help with specifics on when to execute a bond tent and isn’t going to tell us that we have to reach a 3% WR or the sky will fall. I’m considering someone for a one-off consultation through XY Planning network (started by Kitces, I believe) because that might fit our needs. I’m open to recommendations though. As much as I agree with others that we can do this ourselves, I need an independent feel-good check to make my husband comfortable, and that is worth spending a little money on.
TheWifeHalf: another way to think of it is that you are doing your charity now. You just happen to be donating large sums of money to a white-collared professional. :)
If I do my online interest calculator correctly, if you moved from Fidelity to Vanguard’s managed account service at 0.3% fees instead of 1%, you could save $300k over the next 20 years. That is a lot of money you could give to a true charity, if you were interested.
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Wtf is the point in putting 100k with an advisor.putting a small portion with an advisor makes 0 sense. You either think they are going to be better for you or not putting 5-10% of your money with them accomplishes next to nothing.
Slow down a second. The point is psycholgical, not mathematical.
What some people need is a demonstration, the advice isn't intended for you, but I'll try to explain it. If a person has a psychological hangup, repeatedly telling them they're wrong or crazy or make no sense is not going to help. What does help is trying to understand their views and working with them. If the husband feels that strongly, then moving $100,000 and paying $1000 in fees over a year would demonstrate its useless. Its not about being optimal, its about getting past the hangup so the couple in question can retire already. If they had done this 3 years ago, they would alreay have the experiment finished and the husband would already be retired.
Instead, the OP paid $2500 to attempt to accomplish the same thing. Whats better, spending $2500 or doing a trial and spending $1000? How much more money will be wasted in the convincing? As the story unfolds it sounds like my advice would have saved $1500; I'll agree with boarder that its still a waste but the point is to minimize damage.
OP - try to understand your husbands hangup and work with him. He's not ignorant, he understands the math. Often in the quest for perfection we overlook mediocre solutions that will work. My solution is mediocre, but its one path towards the real goal which is to get you retired in the shortest time possible.
Talk it over with the husband, if it gets him to retire, its the best $1000 you'll ever spend. In all the arguments, lets not overlook the purpose of all the discussion, its not about spending, its about getting the husband to retire. I fail to see how this entire discussion about fees will convince him to retire, if he were to read this thread, how would that help him retire sooner?
2500 one time review is better than moving 100k in for 1k to be lost annually. B/c a one year study proves nothing.
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I can't stop laughing at the angry responses to this thread!
Investment management fees =/= financial planning fees. They are completely different. Just because some folks are comfortable spending considerable time on the internet researching their investment strategies (most likely during one of the strongest bull runs in all of history), doesn't mean others have the same personality.
Do some institutions create a conflict of interest by paying commissions on products rather than advice? Yes. Does that mean all financial planning is a waste of money? No.
Believe it or not, outside of this MMM 'bubble', there are individuals with millions of dollars who do not know the difference between a bond and a preferred share. They do not grasp the concept of asset allocation and rebalancing. They do not know how to perform an insurance needs analysis, a pension analysis, a taxation analysis. They do not know how to create an estate plan, or open a trust for their disabled grandchild with government benefits. And guess what? They have NO interest in learning about it.
These otherwise intelligent investors are willing to a pay a premium to have their finances taken care of by a professional who is also a fiduciary. Payment for these services is obviously required - how that payment is made is what I believe is under scrutiny here.
I wholeheartedly agree with Prairie Stash in the recommendation to have the minimum amount managed by a fiduciary (i.e. $100k at 1% = $1,000 per year) as they are obligated to provide professional advice on your WHOLE financial situation. IN ADDITION, if you find their risk-adjusted returns are underperforming that of your Vanguard portfolio - BRING IT UP! Explaining that you are getting better returns on your 0.05% MER portfolio than their recommendations is not a slap to the face, it is an honest discussion that any REAL financial planner would welcome.
Interesting Fact: Wealthy clients pay LESS to hire a financial planner and buy the individual securities in the index, than to buy an index ETF or mutual fund. That's right, they are paying less than investors holding an S&P500 Index Fund.
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Preach!!
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I can't help but point out that this is quite a disingenuous post. By your handle I assume you're a financial adivsor? Let me go grab my grain of salt.
I can't stop laughing at the angry responses to this thread!
Investment management fees =/= financial planning fees. They are completely different. Just because some folks are comfortable spending considerable time on the internet researching their investment strategies (most likely during one of the strongest bull runs in all of history), doesn't mean others have the same personality.
A fee is a fee. So in that respect if someone is paying for something they don't need to then it is a waste of money whether it is on investment management or financial advising. And under and AUM model, most brokers/financial advisors/customers men (or women) do not break out their charges and allow folks to pick what they want. If someone is planning on using a 4% withdrawal rate, a 1% fee is equivalent to the financial advisor consuming 25% of what a person can comfortably spend. Sounds like a mooch if you ask me....
Do some institutions create a conflict of interest by paying commissions on products rather than advice? Yes. Does that mean all financial planning is a waste of money? No.
This is a straight up straw man. Logically flawed.
Believe it or not, outside of this MMM 'bubble', there are individuals with millions of dollars who do not know the difference between a bond and a preferred share. They do not grasp the concept of asset allocation and rebalancing. They do not know how to perform an insurance needs analysis, a pension analysis, a taxation analysis. They do not know how to create an estate plan, or open a trust for their disabled grandchild with government benefits. And guess what? They have NO interest in learning about it.
Your third argument is a straight up appeal to popularity. So whatever.... lots of people can be wrong all at once. Also you do not get estate planning, and trust set-up for the cost of financial advisor fees, as these usually require the services of an attorney. Perhaps you meant something else? Or just that the financial advisor suggests them and puts people in touch with "their" lawyer? Lawyers in most states are forbidden from splitting fees received from their clients with a non-lawyer, so I think bundled legal services in this context, if actually offered as such, are probably a violation of the state bar ethical rules where the lawyer is practicing. More than likely though financial advisory fees do not cover these legal services -- I've never heard of it.
These otherwise intelligent investors are willing to a pay a premium to have their finances taken care of by a professional who is also a fiduciary. Payment for these services is obviously required - how that payment is made is what I believe is under scrutiny here.
No we are arguing that over 1% is too high. Don't try to change the subject. The fact that the financial advising industry needs to resort to hidden, layered fees, talking out of both sides of their mouth, and microscopic fonts in important disclosures such as expense ratios speaks volumes to whether they can be trusted. Imagine if all brokerage houses were required to post their gross fees in 6 ft letters by the side of the road the way gas stations do with gas prices? Perhaps people would shop around...
I wholeheartedly agree with Prairie Stash in the recommendation to have the minimum amount managed by a fiduciary (i.e. $100k at 1% = $1,000 per year) as they are obligated to provide professional advice on your WHOLE financial situation. IN ADDITION, if you find their risk-adjusted returns are underperforming that of your Vanguard portfolio - BRING IT UP! Explaining that you are getting better returns on your 0.05% MER portfolio than their recommendations is not a slap to the face, it is an honest discussion that any REAL financial planner would welcome.
OR INSTEAD OF BRING IT UP, JUST FIRE THE ADVISOR! In my experience and opinion, financial advisors are trained to keep people at the trough. There will be an answer for every question....full of half truths and weasel words. Financial advisors will work to sow fear, uncertainty, and doubt in clients, and work to pit spouses against each other so that the resistant one finally gives in and agrees to the services. Further, I do not believe you that hiring a financial advisor for a small portion of an account requires them to give detached and disinterested advice on the whole financial situation. I mean why would it? They are not responsible for it. And, I'm sure lots of sales pitches for management and other products such as annuities and life insurance policies will ensue if a person only rolls 10-20% of their net worth under a financial advisor who bills under the AUM model.
Interesting Fact: Wealthy clients pay LESS to hire a financial planner and buy the individual securities in the index, than to buy an index ETF or mutual fund. That's right, they are paying less than investors holding an S&P500 Index Fund.
Huh? This is a bit irrelevant to the discussion at hand. I assume you included it to take a swipe at index funds. I mean I guess if someone has high 8 or 9 figures to invest they would be able to beat a 3.5 or 4 basis point fee that Vanguard or Fidelity charge for an index fund. But excluding ultra-high net worth individuals, pension funds, and institutional investors, etc, this is basically false for most individual investors. An index fund with a 3-4 basis point (0.03-0.04%) ER is cheaper to manage that buying all of the individual securities on an index such as the S&P 500 or Total Market Index. And furthermore, when a person hires a financial advisor, my experience has been they do not get direct purchase of all the securities on index. Instead they get 20-30 bullshit high-fee actively managed mutual or ETF funds which in aggregate all cancel each other out and provide no better results than the portfolio benchmark results minus all of the fees.
L.A.S,
Firstly, I am not a financial advisor. Perhaps your incorrect assumption persuaded your defensive response?
I never once mentioned the AUM model of fees when explaining the difference between investment management and financial planning, but you happily grasped on that fact as if it was set in stone. Are you aware of something called fee-for-service?
You may want to check out something called 'Google' for the definition of straw man! Nowhere in my sentence did I try and create such an argument. The reality is that some institutions which should be AVOIDED are focusing on commission based advice. However, that doesn't warrant throwing the baby out with the bathwater when it comes to FINANCIAL PLANNING advice.
To be honest, your further replies aren't worth a response. It's clear you or someone you know has dealt with an 'Advisor' who was NOT a fiduciary in the past because YES THEY ARE REQUIRED TO GIVE HOLISTIC ADVICE ON YOUR WHOLE PORTFOLIO REGARDLESS OF WHAT % IS BEING MANAGED !
And lastly, the fact about wealthy clients paying less than index fund holders is 100% true and is proven by mathematics. If you really want to dispute that, you are essentially disagreeing with a calculator :)
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We need to clearly distinguish between fiduciary fee-for-service/fee-only advisors and the 1% AUM model. The first has its place for some people. The second is pretty much universally (around here, TheWifeHalf notwithstanding) derided as rife with conflict of interest, and something between highway robbery and a scam.
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Look to Fidelity's own study of it's 401k holders. They wanted to know what things those with the best outcomes (most gain) over time did. Those with the absolute gains........were dead.
Do you have a link for this study? I tried to google but could not find it. Would love to show some people so please share if you can.
edit: found these two links:
http://www.businessinsider.com/forgetful-investors-performed-best-2014-9
https://twocents.lifehacker.com/the-best-investors-literally-forget-about-their-portfol-1782581085
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http://www.businessinsider.com/forgetful-investors-performed-best-2014-9 (http://www.businessinsider.com/forgetful-investors-performed-best-2014-9)
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http://www.businessinsider.com/forgetful-investors-performed-best-2014-9 (http://www.businessinsider.com/forgetful-investors-performed-best-2014-9)
Interesting, this page claims that Fidelity said the study does not exist:
Here’s how to get better returns in your retirement account: Pay as little attention to it as possible.
That was the conclusion of a study by the investment giant Fidelity, according to a 2014 article on Business Insider. The article relayed the transcript of a Bloomberg program in which the well-known money manager Jim O’Shaughnessy said that people who had forgotten that they had accounts outperformed everyone else.
Fidelity, which has received inquiries about the study ever since, without knowing why, told me this week that it had never produced such a study.
https://mobile.nytimes.com/2016/08/06/your-money/401k-retirement-plan-investment-stock-markets.html
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Firstly, I am not a financial advisor.
I'm a Certified Financial Planner in Ontario
?
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That was the conclusion of a study by the investment giant Fidelity, according to a 2014 article on Business Insider. The article relayed the transcript of a Bloomberg program in which the well-known money manager Jim O’Shaughnessy said that people who had forgotten that they had accounts outperformed everyone else.
Fidelity, which has received inquiries about the study ever since, without knowing why, told me this week that it had never produced such a study.
https://mobile.nytimes.com/2016/08/06/your-money/401k-retirement-plan-investment-stock-markets.html
Aw damn. It was such a great story too.
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I used a Fidelity financial advisor for a few years. It was a debacle. The funds slogged their way up each stock market rally like a tortoise on prozac, always arriving last at the summit. When the markets tanked they dropped like said tortoise from the clutches of a bird of prey hoping to crack its shell.
I finally got a clue and went solo. I've made some grievous mistakes over the years but overall it went well and I FIRE'd. And if nothing else when I fucked up it was a lot easier to kick the ass of the person responsible.
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Firstly, I am not a financial advisor.
I'm a Certified Financial Planner in Ontario
?
Ouch
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I have read from sources I believe that many people can't or won't manage their own money even though they have lots. But in those cases the way to go is to pay by the hour or a flat rate, and not AUM. If you pay like that at least you know exactly what you pay and what you get.
Interesting Fact: Wealthy clients pay LESS to hire a financial planner and buy the individual securities in the index, than to buy an index ETF or mutual fund. That's right, they are paying less than investors holding an S&P500 Index Fund.
Hmmm what is the least amount you'd have to pay someone for this? I guess $40k/year. VTSAX costs 0.04%, $40k/0.0004 = $100,000,000. So let's say you'd need to have about $300,000,000 for a "three-fund" managed portfolio that is similar to and cost competitive with Vanguard and attempts to track an index. Even then you'd more likely be looking at 500 securities in each rather than thousands.
I have heard this as a compelling DIY option though. Buy 100 shares of every company in the S&P and live only off the dividends forever without touching anything again (you may be down to only 100 companies or so after 50 years). No costs, and no advisor needed.
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TheWifeHalf: another way to think of it is that you are doing your charity now. You just happen to be donating large sums of money to a white-collared professional. :)
If I do my online interest calculator correctly, if you moved from Fidelity to Vanguard’s managed account service at 0.3% fees instead of 1%, you could save $300k over the next 20 years. That is a lot of money you could give to a true charity, if you were interested.
This is exactly how we look at it. F obviously hires younger white professionals that come from farmland. They are kids my kids went to school with, some with parents I went to school with. That says a lot to us.
We have a 'buy American' and 'buy local' way of purchasing anything of substantial value if possible. Sure, we might pay a little more, but we sleep well at night doing what we feel is our obligation to paying back the good fortune we've had in the car accident we were in 10 years ago.
I am going to show TheHusbandHalf all the info in this thread, but will wait until after he retires in January. F has our 'Personal Financial Power of Attys' on file, something I learned by reading this forum. 70% of our assets are with F, 70% of that in THH's name, so that info was very helpful.
Since the kids moved out 8-9 years ago, we have tried to simplify our lives a bit. THH's employer must have some deal with F, everything seems to go there. They even have a separate page, in THH's name, for his pension. I think it would not be 'simplifying' to change all that now.
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F obviously hires younger white professionals that come from farmland.
woah, back up. They do? Why is this obvious?? And why are they white? Or do you mean their collars?
It sounds like you wouldn't mind if someone stole your car every month either, after all you'd be supporting a young, local professional..
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F obviously hires younger white professionals that come from farmland.
woah, back up. They do? Why is this obvious?? And why are they white? Or do you mean their collars?
It sounds like you wouldn't mind if someone stole your car every month either, after all you'd be supporting a young, local professional..
this is why this site needs a like button. man that was great! only they're probably stealing more than the value of the car each month with the management and expense ratios. THIS IS NOT THAT FUCKING HARD PEOPLE .... all you have to do is listen to the most brilliant investor of all time
(https://steemitimages.com/0x0/https://steemitimages.com/DQmXdCqi5ZYpfa2swS1Eu5LoBK71UMrtbw1MkQ1dcogmbYS/warren-buffett.png)
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THH and I have talked about some of the issues that have been mentioned. One of the things we talked about was having money left to give to a charity, to our kids, or having little left. The way we looked at it, sure, they're making $ from us, but we are happy with the amount. Helping to pay people that lived around here when they were younger, and I'm sure others from little towns, so they are employed vs a charity when we die? It's one of the choices we made. We have a few charities mentioned in our will, if there's ANYTHING LEFT.
Fidelity CEO Abigail Johnson is worth an estimated $16.8 Billion. I'm sure she appreciates your sacrifice to keep her in the lifestyle to which she has become accustomed.
https://www.forbes.com/profile/abigail-johnson/
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you can cut your lifestyle as much as you want and live on rice and beans but if you're paying 1% of your stashe to an advisor man you're just missing the lowest hanging fruit - shit anything more than .1% to an advisor and you're really missing the low hanging fruit.
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F obviously hires younger white professionals that come from farmland.
woah, back up. They do? Why is this obvious?? And why are they white? Or do you mean their collars?
It sounds like you wouldn't mind if someone stole your car every month either, after all you'd be supporting a young, local professional..
2 that work for F in Cincinnati went to school with my kids (same school I, and my Dad, went to) and when we went up to the F office in Michigan, the man we talked to was from the next school system over, same county. The first 2, my sons told me where they worked, I went to school with their Moms (one Mom was a preschool teacher for all 3 of my kids) and one Dad was a year ahead of me in the same school. Their employment was verified by their Facebook pages. I believe them, don't if you don't want to. So, to me, it is obvious.
I meant their collars, I didn't even think of another definition.
If what I typed sounded like that, I suggest you get a hearing test, because I think maybe you're assuming things that are just not true.
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Hmm... I could be wrong, but I think that @ysette9 was poking fun and being facetious.
Maybe, but it IS how we think
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F obviously hires younger white professionals that come from farmland.
woah, back up. They do? Why is this obvious?? And why are they white? Or do you mean their collars?
It sounds like you wouldn't mind if someone stole your car every month either, after all you'd be supporting a young, local professional..
2 that work for F in Cincinnati went to school with my kids (same school I, and my Dad, went to) and when we went up to the F office in Michigan, the man we talked to was from the next school system over, same county. The first 2, my sons told me where they worked, I went to school with their Moms (one Mom was a preschool teacher for all 3 of my kids) and one Dad was a year ahead of me in the same school. Their employment was verified by their Facebook pages. I believe them, don't if you don't want to. So, to me, it is obvious.
I meant their collars, I didn't even think of another definition.
If what I typed sounded like that, I suggest you get a hearing test, because I think maybe you're assuming things that are just not true.
you clearly missed the joke about the car - he was saying just the fees you're paying them make them criminals on the level of someone stealing your car every month. i'm all for the to each their own do what works for you thing but when it comes to paying someone over 1% of your money its just the worst possible thing you can do in life - and then to consistently defend it likes its no big deal when its clearly been shown to not be a big deal but a HUGE deal is just like putting your head in the sand and saying i dont hear you.
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Hmm... I could be wrong, but I think that @ysette9 was poking fun and being facetious.
Maybe, but it IS how we think
Guilty as charged. I am an engineer so I was speaking literally there, though the intended tone was gentle ribbing.
I think your goal of giving back to the local community and supporting people you know finding productive careers, TheWifeHalf. I just wonder if there aren’t more effective ways of doing it for the same money. Just some random ideas, but what about a small scholarship or paying tuition for kids in junior college? Paying living expenses for unpaid summer internships for underprivileged youth? Jobs training program, apprenticeships, school supplies, cash grants to homeless shelters, battered women shelters, food banks....
Anyway, I’ll stop. We are all free to do whatever we want with our money. It is just the nature of the beast (this forum and my engineering training) to want to find the optimized path of achieving a stated objective.
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you clearly missed the joke about the car - he was saying just the fees you're paying them make them criminals on the level of someone stealing your car every month. i'm all for the to each their own do what works for you thing but when it comes to paying someone over 1% of your money its just the worst possible thing you can do in life - and then to consistently defend it likes its no big deal when its clearly been shown to not be a big deal but a HUGE deal is just like putting your head in the sand and saying i dont hear you.
We do not pay 1%
The totals they list are already with the fees subtracted from it. We are happy, which I guess was the reason for my original post in this thread. I am happy that all our accounts are figured into the lower fee, even though mine is so small..
The way I look at it, F employees went to school to learn, and paid for that. We have met with financial planners, not managers, who list all these letters behind their names, but when we ask, very little schooling. And their fees are over 1 %. I really don't know if that's possible or not.
To put it in a way that is relative to me - I used to work for a vet. Right about that time there were schools opening up that one could go to to get a vet tech degree. I was grandfathered in, no schooling, just on the job training. Now, all vet techs have school and degrees, if I was still working, I would be paid less, and should be. (in my brain that story is related)
I do not consider the people we deal with at F to be criminals. We were told, before they got one penny of our money, what their fees would be. A criminal would have not told us, or told us a lie.
I am only defending what works for me, I am not defending it as a way for everyone. I am reading this forum to learn. As is my usual way, I read, take in the info, put it in the same pot as the things that we are doing, make a decision to use it or not, and then keep reading. As I said before, I will show all this to THH after he retires.
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F obviously hires younger white professionals that come from farmland.
woah, back up. They do? Why is this obvious?? And why are they white? Or do you mean their collars?
It sounds like you wouldn't mind if someone stole your car every month either, after all you'd be supporting a young, local professional..
2 that work for F in Cincinnati went to school with my kids (same school I, and my Dad, went to) and when we went up to the F office in Michigan, the man we talked to was from the next school system over, same county. The first 2, my sons told me where they worked, I went to school with their Moms (one Mom was a preschool teacher for all 3 of my kids) and one Dad was a year ahead of me in the same school. Their employment was verified by their Facebook pages. I believe them, don't if you don't want to. So, to me, it is obvious.
I meant their collars, I didn't even think of another definition.
If what I typed sounded like that, I suggest you get a hearing test, because I think maybe you're assuming things that are just not true.
I just find this "logic" baffling. It can be used to defend any spending if the money goes to people who went to the same school as you. Which I find a bizarre way to determine who's worthy of support as well. There are children dying of malaria in africa I've never seen, but I'd rather help them than anyone who went to my school.. Maybe I'm weird.
I hope you don't run into someone from your school who's selling drugs, or you'd have a pretty good argument to take up a coke habit to support their business (though to be fair that would probably cost you less than the 1% fee over time:D
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you clearly missed the joke about the car - he was saying just the fees you're paying them make them criminals on the level of someone stealing your car every month. i'm all for the to each their own do what works for you thing but when it comes to paying someone over 1% of your money its just the worst possible thing you can do in life - and then to consistently defend it likes its no big deal when its clearly been shown to not be a big deal but a HUGE deal is just like putting your head in the sand and saying i dont hear you.
We do not pay 1%
The totals they list are already with the fees subtracted from it. We are happy, which I guess was the reason for my original post in this thread. I am happy that all our accounts are figured into the lower fee, even though mine is so small..
The way I look at it, F employees went to school to learn, and paid for that. We have met with financial planners, not managers, who list all these letters behind their names, but when we ask, very little schooling. And their fees are over 1 %. I really don't know if that's possible or not.
To put it in a way that is relative to me - I used to work for a vet. Right about that time there were schools opening up that one could go to to get a vet tech degree. I was grandfathered in, no schooling, just on the job training. Now, all vet techs have school and degrees, if I was still working, I would be paid less, and should be. (in my brain that story is related)
I do not consider the people we deal with at F to be criminals. We were told, before they got one penny of our money, what their fees would be. A criminal would have not told us, or told us a lie.
I am only defending what works for me, I am not defending it as a way for everyone. I am reading this forum to learn. As is my usual way, I read, take in the info, put it in the same pot as the things that we are doing, make a decision to use it or not, and then keep reading. As I said before, I will show all this to THH after he retires.
pretty sure your fees assumptions were already shown to be incorrect by someone with actual knowledge of how Fidelity works and who also understands finances. What you're paying is high way robbery that fact that youre acknowledging and sticking your head in the sand about it is ignorance for the sake of ignorance.
and WTF would you wait til he retires when people typically get more nervous about money .. instead of defending crazy spending levels which is what this is go read this and come back with questions. Why can YOU be the one who understands the money if he doesnt want to learn b/c of all his plumbing knowledge. There is no knowledge in the world more important than understanding how and why indexing works so you feel confident managing your own money.
http://jlcollinsnh.com/stock-series/
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My MIL has a financial advisor, who takes "good care" of her. She has more money now than when her husband died, and it's all because of good ole "Ruthie." Yup, what would we do without Ruthie?
The first thing I am going to do when W inherits that account (hopefully far off in the future!) is roll that sucker over into Fidelity. "But what about poor old Ruthie?," you may be wondering. We will send her a nice thank you card. Maybe even some flowers. Then we will commence saving 1% per year on fees.
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My MIL has a financial advisor, who takes "good care" of her. She has more money now than when her husband died, and it's all because of good ole "Ruthie." Yup, what would we do without Ruthie?
The first thing I am going to do when W inherits that account (hopefully far off in the future!) is roll that sucker over into Fidelity. "But what about poor old Ruthie?," you may be wondering. We will send her a nice thank you card. Maybe even some flowers. Then we will commence saving 1% per year on fees.
Same goes for my parents. My dad has a financial advisor that he went to high school and college with. He's a nice guy. I've met him. He is now semi retired living in a gated community near Phoenix. My dad feels that this man has really helped him out with figuring out investments. Well, yes he has, at 1% a year, that has helped him buy that big house in AZ. My parents have done well financially, and they are in their 70s so they are pretty set in their ways and won't change now. But that will certainly change in the future in what I see with those investments.
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I never once mentioned the AUM model of fees when explaining the difference between investment management and financial planning, but you happily grasped on that fact as if it was set in stone. Are you aware of something called fee-for-service?
The title is about paying 1% AUM. I think many have agreed that it is ok to pay a fixed amount for advice or a double check. The big issue is paying 1% for a number that continues to grow. The firms also tend to have you buy their proprietary funds that are more challenging to move to another institution. Paying 1% when you have $10k is not a bad deal. When the numbers are getting into the millions, the amount of service you receive to the fees that you are paying are not in your favor. If you are locked in with proprietary funds, then it is expensive to move your money.
To be honest, your further replies aren't worth a response. It's clear you or someone you know has dealt with an 'Advisor' who was NOT a fiduciary in the past because YES THEY ARE REQUIRED TO GIVE HOLISTIC ADVICE ON YOUR WHOLE PORTFOLIO REGARDLESS OF WHAT % IS BEING MANAGED !
This does not make sense. So you are saying that you can have $5 million invested elsewhere. Go to your advisor and deposit $10k and they are required to provide you advice on the full $5 million. I don't think that is accurate. Do you have any support for that? They are there to make money.
And lastly, the fact about wealthy clients paying less than index fund holders is 100% true and is proven by mathematics. If you really want to dispute that, you are essentially disagreeing with a calculator :)
This does not make sense at all. Do you have support for this? Can you show me the mathematics? Are you including the salaries, commissions, and other fees to manage this portfolio. Vanguard is the most efficient as they have trillions invested and they focus on low fees. I can't believe that they can compete with the scale.
I have met with a lot of advisors over the years. What I have found in my sample is that they were all salespeople. They had access to their investment advisors who would send out recommended purchases. Their credentials were not in higher level degrees in finance. No one had a masters and most of them had degrees that were not finance related. They were salespeople. Now that research and information is readily available, I think the value of engaging investment companies becomes less and less.
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Tomsang.... I have received my license and have started a finacial planning consulting buisness. It is absolutely true that you pay a financial advisor to give advice on the whole picture -- need to design an asset strategy that includes all accounts, your home, your estate planning, tax planning, whether you have business or a blended family with elder care, that sort of thing.
Financial planners spend time on what to invest in as only 20% of their work. The rest is creating a life strategy to meet a financial goal (like retirement, but could be parental leave, etc). They may not tell you specifics stock strategies for the investments outside of them, but they should use it to influence the recommendations.. eg., if you have all your other savings in municipal bonds, maybe having more than usual of the money with the advisor in international equities is merited.
Note -- I do not sell investment products or insurance. I am only fee for service, like a lawyer, engineer or accountant.
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Tomsang.... I have received my license and have started a finacial planning consulting buisness. It is absolutely true that you pay a financial advisor to give advice on the whole picture -- need to design an asset strategy that includes all accounts, your home, your estate planning, tax planning, whether you have business or a blended family with elder care, that sort of thing.
Financial planners spend time on what to invest in as only 20% of their work. The rest is creating a life strategy to meet a financial goal (like retirement, but could be parental leave, etc). They may not tell you specifics stock strategies for the investments outside of them, but they should use it to influence the recommendations.. eg., if you have all your other savings in municipal bonds, maybe having more than usual of the money with the advisor in international equities is merited.
Note -- I do not sell investment products or insurance. I am only fee for service, like a lawyer, engineer or accountant.
How hard/expensive was that to get? And how are you going about setting up your own shop. This is one thing i plan to do in FIRE and as i think its actually a beneficial service for many plus i can convert some people to FIRE
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Series 6, 63 and 65 securities licensed here. Send me all your money, I will happily manage it for a fee. /s
In truth, I passed the tests. But I know more now after joining this site than I ever did after passing those tests and working in the industry. I worked in the private sector retirement plans industry for years and just about anyone can pass those tests and become an "advisor". I left the industry, but still today am horrified by some of the idiots who are trusted with retirees accounts and fund selections.
Most of the time they are sales people who happened to pass some fancy tests. That's what I was. Thankfully, I worked WITH the advisors, I wasn't one. So, I wasn't given the chance to handle anyone's account directly. I thank the good Lord for that every day. I'm more confident in my ability to do that today than I was when I had the opportunity even though I had all the licensing and street cred required to get it done.
They're typically not worth their price tag. No matter how nice they are.
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Tomsang.... I have received my license and have started a finacial planning consulting buisness. It is absolutely true that you pay a financial advisor to give advice on the whole picture -- need to design an asset strategy that includes all accounts, your home, your estate planning, tax planning, whether you have business or a blended family with elder care, that sort of thing.
I suppose that does not mean that they need to take you on as a client. The ones that I know, require you to move at least a million into their domain. Otherwise, everyone would just dump $5k in an account that they manage, pay them the $50 a year and get all the information for the other $50 million.
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OP here ... for the record, we decided to pass on using this type of service. I already thought it was too expensive but posted here to see if there was something I was missing. Guess not!
Vanguard does offer a once-a-year consultation if you have assets with them over a million dollars, so we are going to do that, but I think the advice will be mostly to keep doing what we're doing, and by the way, for .30% we can manage your money for you. Cheaper than 1%, but still kind of a lot.
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Tomsang.... I have received my license and have started a finacial planning consulting buisness. It is absolutely true that you pay a financial advisor to give advice on the whole picture -- need to design an asset strategy that includes all accounts, your home, your estate planning, tax planning, whether you have business or a blended family with elder care, that sort of thing.
Financial planners spend time on what to invest in as only 20% of their work. The rest is creating a life strategy to meet a financial goal (like retirement, but could be parental leave, etc). They may not tell you specifics stock strategies for the investments outside of them, but they should use it to influence the recommendations.. eg., if you have all your other savings in municipal bonds, maybe having more than usual of the money with the advisor in international equities is merited.
Note -- I do not sell investment products or insurance. I am only fee for service, like a lawyer, engineer or accountant.
How hard/expensive was that to get? And how are you going about setting up your own shop. This is one thing i plan to do in FIRE and as i think its actually a beneficial service for many plus i can convert some people to FIRE
The US system is a bit different.
I am getting my CFP - certified financial Planner, and currently have the level one licenses with FPSC.
There is a competitor designation, mainly used by bank employees, but the CFP is the most widely recognized / used in general. Here it is administered by FPSC. (Financial Planning Standards Council). This is not the securities government body, but it is a widely recognized licensing* body. (*Note, I may be using the term license incorrectly, I am not sure what the underlying legislation is, perhaps "certifying" is a more accurate term).
If you are not a CPA already, or with extensive related work experience, and need to take it from start ---
EDUCATION: there were 5 university level classes, each with exams, a comprehensive final exam to get the education component. Each course is between 100 hours and 150 hours of study, plus self study and homework.
Then I wrote an industry certifying FPSC comprehensive exam, level one.
Then I took a capstone course that combines all the classes into a case study that mimics real life and had to create a financial plan (mine was over 40 pages), that I had to defend at an interview with a CFP / CPA type.
The final two hurdles are to write one more CFP final exam with FPSC (why after I have already written two, I don't know), and to get 3 years full time of Financial Planner work experience, while paying the annual registration dues to FPSC during this time.
The biggest hurdle really is getting the work experience without getting employment with a AUM type firm.
If you don't get hired to assist an independent CFP, then you start your own practice, and getting the insurance can be a challenge.
Oh -- and fee only (hourly no percentage) does not make very much money compared to the AUM model.
In addition, most financial planners get insurance or mutual fund licenses, and securities license, to permit product sales and stock selection advising. These are much easier to get than the CFP designation. With the CFP I can not recommend a specific fund or stock, but need to stick to asset allocation and the class of ETF or mutual fund recommended, etc.
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Tomsang.... I have received my license and have started a finacial planning consulting buisness. It is absolutely true that you pay a financial advisor to give advice on the whole picture -- need to design an asset strategy that includes all accounts, your home, your estate planning, tax planning, whether you have business or a blended family with elder care, that sort of thing.
I suppose that does not mean that they need to take you on as a client. The ones that I know, require you to move at least a million into their domain. Otherwise, everyone would just dump $5k in an account that they manage, pay them the $50 a year and get all the information for the other $50 million.
Yeah, a service that charges you by the hour (like a lawyer or CPA), does not need you to move money to them to give you comprehensive advice.
I actually try to get my clients into couch potato and bond ladder portfolios that they "manage" (look at and adjust twice a year).
Most people that try the small portfolio method you describe for the advice find that it is huge hassle after a year or two. The advisors allow it at first, because it is a great tatic to sell their services. If they do well, they know they will get the larger portion after a while.
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I hope you don't run into someone from your school who's selling drugs, or you'd have a pretty good argument to take up a coke habit to support their business (though to be fair that would probably cost you less than the 1% fee over time:D
Hey, I got that joke! (it was a joke, right?)
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and WTF would you wait til he retires when people typically get more nervous about money .. instead of defending crazy spending levels which is what this is go read this and come back with questions. Why can YOU be the one who understands the money if he doesnt want to learn b/c of all his plumbing knowledge. There is no knowledge in the world more important than understanding how and why indexing works so you feel confident managing your own money.
http://jlcollinsnh.com/stock-series/
I am waiting until he retires because he works 12 hour shifts, in front of 5 (or 6?) computers, relaying messages, responding to buzzes and bells. I always felt one of my jobs at home was to make it a soft place to land. I know him, I know this info would cause more stress, and I won't do that. I am learning, and the source of the info I am learning, though not necessarily retaining, will be given to him to explore on his own, when he retires.
We are NOT typical, we are not nervous about money. You’re going to hate this, but I remember telling someone, I think the F guy, that if the account grew enough to pay the fees, and keep up with inflation, that would make it worth the fees. Really, we have enough. We just can’t sign up for ‘whoever has the most money when he dies, WINS!!!!” game. Every year, the F accounts are worth more on Dec 31 than they were on Jan 1, and that’s after subtracting our contributions.
He definitely has never given me an indication that he does NOT want to learn. Just to describe him a bit, he is very intelligent. And the person you would want to be in charge in the case of an emergency.
I never do anything with our money because I do not have the mental capacity needed to do so. But, we do discuss it, and I learn a bit.
Some people just want to hire a capable person to manage their money for them. That’s us.
I've been known to say "What's his is mine, and what's mine is mine." We both know it's a joke, because in truth, what there is, is ours. I know enough to know I do not have the ability to comprehend all the investing stuff, but every once in a while, info gets put in the right cubicle in my brain, and I think., "Hey THH would like to read this."
I know our lives are hard to understand, but we do what we have to do.
Thank you for your opinions, I am glad for everyone that gives theirs too.
” There is no knowledge in the world more important than understanding how and why indexing works so you feel confident managing your own money. “
I disagree.
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So let me get this straight you stay at home all day while he works 12 hour shift work and I just don't even know what to type here anymore. You completely passed on the point I made that you could learn. Putting all this on the guy working 12hour shifts who could have quit 10 years ago were it not for the fees you've been paying.
Saying you don't have the mental capacity is an excuse. You have the resources you're ignoring them and putting it on him.
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I know our lives are hard to understand, but we do what we have to do.
Not hard to understand at all - I think. If you are assuming you have "enough", then by definition you don't need more. And that's a pretty good place to be.
Now, paying the high(? - have you calculated just how much you are paying each year, compared with doing your own Three-fund portfolio (https://www.bogleheads.org/wiki/Three-fund_portfolio) or similar with Fidelity's or Vanguard's lowest cost funds?) fees to the F guy may still be something that you could stop. But if it takes some time to work through that, no huge harm done.
Good luck!
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The thing that I find strange has nothing to do with paying an excessive fee but that when if comes to the decision making for finances you seem to be at least aware of other strategies listed here and your husband does not.
I never do anything with our money because I do not have the mental capacity needed to do so.
I know him, I know this info would cause more stress, and I won't do that.
You claim that you don't know enough to be able to make financial decisions, yet you are making the decision to withhold information from him about finances (ie these other strategies). That's indirectly influencing your finances and doing so as "the one that doesn't make the decisions" just seems hypocritical to me.
To address the point about it being stressful to learn the advisor isn't necessary, it doesn't have to be stressful. I don't understand why it's stressful in the first place if you as a couple aren't nervous about money. But if you think moving away from the advisor would be stressful for your husband, I would present the strategies others have mentioned as alternative opportunities. They aren't other horses in some hypothetical race towards retirement.
If the source of the stress is regret over past decisions, what I think the worst case scenario is would be you wait until he retires to review these other options, you (royal you) decide to forgo the advisor, and then you conclude you could have done without the advisor all this time. That sounds like the big opportunity for regret.
The other strategies are just options going forward. And hey, it may be that out of the options presented in this thread you both decide that the advisor is the best option for you. But by reviewing the other options now at least the two of you would be going that direction on the same footing.
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We are NOT typical, we are not nervous about money. You’re going to hate this, but I remember telling someone, I think the F guy, that if the account grew enough to pay the fees, and keep up with inflation, that would make it worth the fees. Really, we have enough. We just can’t sign up for ‘whoever has the most money when he dies, WINS!!!!” game. Every year, the F accounts are worth more on Dec 31 than they were on Jan 1, and that’s after subtracting our contributions.
Just my opinion, but barring a huge market downturn, this is typical, and not because you are paying fees to F. The same would happen if you did this yourself, though the returns would be higher.
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if the account grew enough to pay the fees, and keep up with inflation, that would make it worth the fees.
Really, we have enough. We just can’t sign up for ‘whoever has the most money when he dies, WINS!!!!” game.
This is everyone's problem with your lack of logic. It's not "worth the fees", because the fees don't cause the performance! You would have gotten the same (or better) performance without them. The fees (i.e. manager) don't do anything! Hence my joke about having your car stolen; you give away value for nothing. Pointing to your account growing which would have happened in a 3-fund portfolio anyway does not justify the fees.
"Put money in vanguard target date fund. let it sit". That's all the management you'd have to do to get the same performance. Yet on a $1 mill account you're paying an extra $10,000/year to gain nothing beyond that?
I also have plenty of money, but that doesn't mean I feel good about having it stolen by already highly paid charlatans. Then I'd rather keep it and give it to someone more deserving (regardless of which school they went to). And if you have "enough" why is your poor husband working 12 hours days??!! Then give the poor man a break!
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I interpreted TheWifeHalf’s comments to mean that she doesn’t make unilateral decisions about there money, and something as significant as changing advisors would be a joint decision. But maybe I am protecting my own situation on hers.
In our case I have the interest in learning (as evidenced by how much time I waste on this site during the day) and so I educate myself. I then share bits and pieces with my husband, including my proposals for what we do. We talk about big picture goals together and he does some reading that I feed to him when we make big decisions. Mostly I put together a draft proposal, he reads it and some supporting documents (articles online), and then we jointly decide what to do.
I have an idea. What if you talked to a Vanguard financial advisor about their management services, and asked them to build you the business case on why you should switch to them, what your Fidelity fees are actually costing you, and how much you could save by switching? I can’t guarantee they would bite, but that should be up their alley. That is a compromise solution that still gives you hand-holding, but at a significantly lower rate. Then you can spend your time deciding what kind of charitable donations you want to do to improve your community with the $17k or whatever per year you will be saving.
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I have an even better idea. Get out of the active management at Fidelity. Invest everything in a three fund portfolio. Here, I will show you exactly what I, personally, have invested in my very own Rollover IRA:
FSGDX Fidelity Global Ex-US Index (ER 0.1%)
FSITX Fidelity US Bond Index (ER 0.045%)
FSTVX Fidelity Total Market Index (ER 0.035%)
Set your asset allocation. If you don't know what to do, put 1/3 in each. Then forget it. Live life. Enjoy your returns. You need no other special knowledge. These are Fidelity funds. By doing this, you will save a small fortune in fees over the balance of your lifetimes.
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I have an even better idea. Get out of the active management at Fidelity. Invest everything in a three fund portfolio. Here, I will show you exactly what I, personally, have invested in my very own Rollover IRA:
FSGDX Fidelity Global Ex-US Index (ER 0.1%)
FSITX Fidelity US Bond Index (ER 0.045%)
FSTVX Fidelity Total Market Index (ER 0.035%)
Set your asset allocation. If you don't know what to do, put 1/3 in each. Then forget it. Live life. Enjoy your returns. You need no other special knowledge. These are Fidelity funds. By doing this, you will save a small fortune in fees over the balance of your lifetimes.
this it really is that simple thats why everyone here is like HOLY SHIT what are you doing. and the education is reading the jlcollins stock series i posted above.
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A story referencing the Fidelity study finding that those who were dead (or forgot about their accounts) did better than anyone else. I'll look more....I remember someone linking the original Fidelity study in another forum when I mentioned that I could not find it.
https://twocents.lifehacker.com/the-best-investors-literally-forget-about-their-portfol-1782581085
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Another story written about the study that Fidelity supposedly didn't do.....
http://theconservativeincomeinvestor.com/2015/05/26/fidelitys-best-investors-are-dead/
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I came across an interesting fact. The average investment advisor "team" (typically a senior person, an analyst or two and a admin person) has over 521 clients, averaging about $1million in assets each.
Whoa. 521. How can they spend any time on each person?
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I came across an interesting fact. The average investment advisor "team" (typically a senior person, an analyst or two and a admin person) has over 521 clients, averaging about $1million in assets each.
Whoa. 521. How can they spend any time on each person?
Wow, four people managing ~$521 million at 1% fees? Assuming 40 hours/week they are each making an average of $626/hour!