Author Topic: Pay 1.5% Annually for Advisor to Manage 60k in IRA's  (Read 1707 times)

AndyV

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Pay 1.5% Annually for Advisor to Manage 60k in IRA's
« on: January 25, 2017, 08:01:09 PM »
I'm new to this community, but very thrilled to have found you all!

My wife and I (both 33) have 2 rollover iras stotaling 60k (Fidelity,Schwab). Only other retirement is 20k currently in active 401k.  Over the last 3-4 years, I've moved things around in the rollover accounts attempting the Dave Ramsey "4 types", but feel that I've simply been bad at picking funds amd the account balances are roughly the same.  I've met with a few financial advisors recently who've offered to manage these accounts for an annual fee ranging from 1.2-1.7% of the total account balances.

My question, is a good advisor worth this type of annual fee?  Is it recommended to use an advisor like this but perhaps under a different (cheaper) pay structure? Or is this taking the easy way out vs really buckling down and really learning about investing in order to do this myself?

Any advice would be much appreciated. Sick of listening to my broke friends bad advice.  :)

RWD

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Re: Pay 1.5% Annually for Advisor to Manage 60k in IRA's
« Reply #1 on: January 25, 2017, 08:15:20 PM »
No, it's a complete rip off. Read the articles here and save yourself tens of thousands of dollars in compounding interest: http://jlcollinsnh.com/stock-series/

Also, Dave Ramsey's advice is only worthwhile for the mentality of spending less than you earn so you can pay off your debt and should be generally ignored otherwise.

Bracken_Joy

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Re: Pay 1.5% Annually for Advisor to Manage 60k in IRA's
« Reply #2 on: January 25, 2017, 08:16:52 PM »
Another voice for 'not worth it' and another for the Stock Series mentioned by RWD.

Also, a good video about how management fees add up: https://youtu.be/gvZSpET11ZY

Another Reader

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Re: Pay 1.5% Annually for Advisor to Manage 60k in IRA's
« Reply #3 on: January 25, 2017, 08:20:33 PM »
Dave Ramsey is good at motivating people to get out of debt.  His investment advice and his "providers" are worthless.  Read some of the simpler investing material and pick an asset allocation and a custodian.  I prefer Fidelity for the website, the broader choice of investments, and the bricks and mortar offices.  Vanguard is fine if you are low maintenance and DIY.  Schwab has a weaker selection of investments, but some perfectly fine very low cost index funds and ETF's plus offices in many areas.

chesebert

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Re: Pay 1.5% Annually for Advisor to Manage 60k in IRA's
« Reply #4 on: January 25, 2017, 08:32:37 PM »
No, it's not worth it.  Why pay $900 for something you can get for free?   Choose one of these asset allocations, move everything to Vanguard, and then rebalance once per year.  None of this is difficult.  If there were any evidence that active managers were more successful than passive indexes, then the decision might be more difficult.  But there's not.

https://www.bogleheads.org/wiki/Lazy_portfolios
Didn't test all but the 4 fund one performed like crap over the recovery period whereas SPY went gain busters over the same period.

To OP, do what's feel right to you. Ask a lot of questions and make the call yourself.

JLee

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Re: Pay 1.5% Annually for Advisor to Manage 60k in IRA's
« Reply #5 on: January 25, 2017, 10:02:20 PM »
Run the math and see what's best.

Generally that means not paying someone else that much. I certainly wouldn't do it!

MDM

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Re: Pay 1.5% Annually for Advisor to Manage 60k in IRA's
« Reply #6 on: January 26, 2017, 12:14:14 AM »
Over the last 3-4 years, I've moved things around....
My question, is a good advisor worth this type of annual fee?
A good advisor might be worthwhile here if the advisor will put you in good funds and keep you in those funds through market ups and downs - and you feel you wouldn't be able to restrain yourself from chasing the "hot funds" without the advisor.

Of course, if you can restrain yourself to 3 or 4 boring (yet profitable), low fee index funds, then....

lost_in_the_endless_aisle

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Re: Pay 1.5% Annually for Advisor to Manage 60k in IRA's
« Reply #7 on: January 26, 2017, 12:18:57 AM »
I'll do it for 1.4%, let me put it that way!