Author Topic: Advice for my MMM curious 78 year old godmother  (Read 717 times)

pbdupatree

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Advice for my MMM curious 78 year old godmother
« on: March 28, 2019, 06:31:51 PM »
I guess I’ve been talking about Vanguard a lot in front of my 78 year old god mother.
She’s finally so curious she’s asked me how she could move her stock investments from the two money managers she’s paid significant percentages annually  for many many years to low fee index funds or something similar.
As all of my own investments with Vanguard started as cash I have no idea how to advise her.
She’ll certainly need some hand holding and to be educated on potential tax consequences. Would you recommend reaching out to a fee based financial advisor to help?
Or?
We’re in Los Angeles.
Thanks guys.

markbike528CBX

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Re: Advice for my MMM curious 78 year old godmother
« Reply #1 on: March 28, 2019, 09:51:29 PM »
IF your godmother did specify a low cost index fund then calling Vanguard with the account info should be sufficient.

The asset allocation could vary between high stock (Social Security > typical expenses AND 98+ life expectancy) or mostly bonds for shorter time frames, less risk tolerance.

Sibley

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Re: Advice for my MMM curious 78 year old godmother
« Reply #2 on: March 29, 2019, 12:56:07 PM »
If she wants to make a change, then you can help her call Vanguard and they'll walk you through the process. But yes, discuss with her what kind of risk she wants to take on. I would recommend some combo of the bond and stock market index funds, keeps it simple.

Tax impacts - capital gain/losses from selling the old investments.

However, this could be considered high risk for elder financial abuse.

BicycleB

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Re: Advice for my MMM curious 78 year old godmother
« Reply #3 on: March 29, 2019, 01:11:10 PM »
In your shoes, I'd consider the amount of the accounts. A couple thousand dollars to get a professional opinion from a worthy fiduciary is a cheap move to ensure safety if she's talking about seven figure sums. If the accounts are in the $5,000-15,000 range a fee based advisor might be a high cost percentage wise.

The actual transfers are fairly easy if she has online skills. I did one recently. Vanguard has a department for specialized transfers. I phoned them, they prepared a couple forms online, then they walked me through the process of me accessing the forms online to complete and verify them. Mechanically, they required that I first have the company being transferred from convert all the assets in the old accounts into cash. Then the cash was transferred in kind to Vanguard. When that process is completed, I can then invest the cash into other Vanguard investments. If Godmother is not computer savvy, the experience might be different, perhaps involving paper forms, but I suspect the fact of selling the old assets and then transferring cash will be similar.

As @Sibley implied, helping her online involves risk of being blamed for transactions that other people don't like, or anything that goes wrong somehow. Less so if don't inherit anything ever and you make no profit, but still. 

bacchi

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Re: Advice for my MMM curious 78 year old godmother
« Reply #4 on: March 29, 2019, 01:39:18 PM »
If the money isn't in tax-deferred accounts, then she'll probably get taken to the cleaners by capital gains tax.

Unless Vanguard can do a transfer-in-kind. Vanguard can tell her/you if they'll accept those assets (individual stocks are easy) or if they need to be in cash first.

Get the latest statement, call up Vanguard, and ask them if they'll accept a transfer of HLMFX (High Load Mutual Fund), etc.

And +1 on finding a sensible fee-only fiduciary.