Author Topic: Breaking up with my "financial advisor" today.  (Read 4367 times)

Better Change

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Breaking up with my "financial advisor" today.
« on: December 15, 2014, 07:55:20 AM »
Punch me hard in the face, but I've had an Edward Jones financial advisor since I started investing in 2009.

It was all cute fun and games when I had a rather small investment fund ($30k), but it's downright appalling right now how bad the situation is getting.  I have my update meeting with my advisor today, and I just checked the document we're about to discuss.  My return this year is 2.68%.

I doubt I will break even by 2015 with all the goddamn fees.

I feel totally stupid to have let it gone on this long.  Thankfully I wizened up this weekend and opened a Mint account to discover that I'm underperforming the S&P by a huge margin.  Uff, I feel sick.  What a painful financial lesson.

At least give me the thumbs up for transferring my accounts shortly? 

Sadly, my parents are still joined at the hip to this advisor, who's become a family friend. 

welliamwallace

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Re: Breaking up with my "financial advisor" today.
« Reply #1 on: December 15, 2014, 08:01:36 AM »
You are disappointed in your annual return of 2.68%, a significant under performance compared to the S&P 500. But does your asset allocation match the S&P 500? Or are you invested more conservatively, or more diversified? If you have foreign stock, or bonds, both have done worst than the S&P 500 this year.

Now, granted, there is a 99% chance that you are getting fucked by your "advisor" in fees. But you should make that decision by LOOKING AT THE FEES, not by looking at your annual performance (vs an arbitrary index), which depends mostly on asset allocation.

MDM

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Re: Breaking up with my "financial advisor" today.
« Reply #2 on: December 15, 2014, 08:03:03 AM »
Thumb somewhat above horizontal just for you getting to a lower fee situation, but waiting on your new asset allocation before going completely vertical.

In other words, how is your money invested now and how (if at all) do you plan to change when not using Edward Jones?

ioseftavi

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Re: Breaking up with my "financial advisor" today.
« Reply #3 on: December 15, 2014, 08:10:27 AM »
You are disappointed in your annual return of 2.68%, a significant under performance compared to the S&P 500. But does your asset allocation match the S&P 500? Or are you invested more conservatively, or more diversified? If you have foreign stock, or bonds, both have done worst than the S&P 500 this year.

Now, granted, there is a 99% chance that you are getting fucked by your "advisor" in fees. But you should make that decision by LOOKING AT THE FEES, not by looking at your annual performance (vs an arbitrary index), which depends mostly on asset allocation.

This is the correct way to view this.  Your fees are high compared to what you could pay managing the funds on your own.  Your return is going to be determined by your asset allocation, less fees, less any behavioral mistakes you make (market timing, etc).

Don't look at your return to decide if your advisor is doing a good job.

Le Barbu

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Re: Breaking up with my "financial advisor" today.
« Reply #4 on: December 15, 2014, 08:12:20 AM »
Sadly, my parents are still joined at the hip to this advisor, who's become a family friend.

I can probably become friendly with worthy people giving me 2% of their net worth every year! With only 2 milionnaire friends, I would be already FIRE

Better Change

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Re: Breaking up with my "financial advisor" today.
« Reply #5 on: December 15, 2014, 11:36:46 AM »
I got suckered into opening an Advisory Solutions account in the summer.  The fees on that account alone (not including the expense ratios of the associated funds) are 1.5%.  Bah.  I'll have paid ~25% of my return in fees this year.

This "breaking up" event is me finally opening my eyes and beginning the process of educating myself.  I naively assumed that a managed account meant that it was, uh, actively being managed to my financial benefit.

I think Edward Jones tends toward the more conservative side; I'm 73% stock/27% bonds, which is probably low for my age (30).  And some normally "reliable" money makers tanked pretty hard this year (yep, small cap and international assets).  Not my advisor's fault, admittedly.  But she was really shocked when I told her I wanted more growth-based investment.

tl;dr.  I'm still learning.  But it's a fun new challenge!



GoldenStache

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Re: Breaking up with my "financial advisor" today.
« Reply #6 on: December 15, 2014, 12:17:25 PM »
Congrats PalladiumVI!!!

I think EJ is a great stepping stone for many people but most can do it themselves and save a ton in fees. 

Investing with EJ is better than putting it under your mattress, or not saving at all.  Don't beat yourself up for the things that you should have done, be proud of the things you are doing now. 

fmzip

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Re: Breaking up with my "financial advisor" today.
« Reply #7 on: December 16, 2014, 08:51:50 AM »
Congrats!

I broke up with mine about seven months ago :)

Unless you are 100% invested in the S&P, don't use that as your gauge of performance.

I've had negligible returns thus far since my move but the money I saved in fees made it a very worthwhile. My small allocation in Vanguards total international index dragged my performance down considerably.

But, in comparing the protfolio of what I had versus what I have now, my performance is in the lead. Regardless of how I fir over the long-term, I am happy that I am handling my finances for the duration :)

FIRE in 10 years :)

Zamboni

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Re: Breaking up with my "financial advisor" today.
« Reply #8 on: December 16, 2014, 09:02:44 AM »
Whoo-hoo, Pd(VI)!  Kick 'em to the curb!

And they do try to "befriend" clients.  Ugh, makes me kind of sick to think about it.  My EJ guy would chat it up, recommend people to do work on our house on the cheap, ask after our kids and parents, etc.  But then he was actually really rude to me when I decided to transfer my money to Vanguard . . . and there I was thinking he was my friend.  It was like real break up.

Le Barbu

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Re: Breaking up with my "financial advisor" today.
« Reply #9 on: December 16, 2014, 09:27:37 AM »
Whoo-hoo, Pd(VI)!  Kick 'em to the curb!

And they do try to "befriend" clients.  Ugh, makes me kind of sick to think about it.  My EJ guy would chat it up, recommend people to do work on our house on the cheap, ask after our kids and parents, etc.  But then he was actually really rude to me when I decided to transfer my money to Vanguard . . . and there I was thinking he was my friend.  It was like real break up.

They always think about their own interest.

I once think about freelancing and my title would haven been "Clueless Helper" (a kind of "poor at $$math and bad decisions takers" agent) but then realized this job would have to be done for free or very low rate (in my clients best interest) and finaly leave me with peanuts! I gave up...