Author Topic: Creative Planning Firm vs. Vanguard for 1 year?  (Read 746 times)

BethMI

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Creative Planning Firm vs. Vanguard for 1 year?
« on: December 11, 2020, 11:33:34 AM »
Edward Jones has my 3 accounts (SEP, ROTH, Taxable). I have to get out of there.
I was planning on moving it all to Vanguard, but I am so overwhelmed by the prospect of messing it up without any advice. After reading the Tony Robbins book, Unshakable, I talked to an advisor at Creative Solutions - (Peter Mallouk's financial firm who offers a free second option to anyone). They charge less (1% and fee ONLY) than my EJ advisor (1.08 and fee BASED) and they only invest you in ETF's and Index's with very low fees (where EJ picks funds with .5 expense ratios, etc).
They also give you actual tax advice (not just refer you to your accountant like EJ). He said there are things I should be doing, like having a solo 401k instead of a SEP and doing back door Roth contributions (I'm self employed, I have a separate LLC for my rental, and a side business).
I told him I tentatively planned to go to Vanguard because I know how much the 1% will add up year after year and asked what he would do if he were me. He said, If I were you, I would use us for one year then move it to Vanguard.
Thoughts?
PS - the fees to move the accounts from TD Ameritrade (where they hold the accounts) is $50/account - so that's not too bad, compared to EJ.

NotJen

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Re: Creative Planning Firm vs. Vanguard for 1 year?
« Reply #1 on: December 11, 2020, 12:23:52 PM »
I think you should seek tax advice separate from where you invest.

If your goal is to invest in index funds, I think it's pretty hard to "mess up" a transfer to Vanguard (the best thing is to get out of EJ as fast as possible).  Back in the day, I had to transfer everything from EJ to Vanguard - the process was smooth (except for all those EJ fees I had to pay to close my accounts).

What research have you done so far about building a portfolio with index funds?  With the SEP and Roth, you can re-allocate the funds within them with no tax consequences if you need to (except wash sale rules if you sell the same funds in your taxable account for a loss).  You do want to be more careful with your taxable account (to avoid unnecessary taxable events), and you can park it in the money market for a short amount of time while you figure out tax efficient placement.

BethMI

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Re: Creative Planning Firm vs. Vanguard for 1 year?
« Reply #2 on: December 11, 2020, 12:42:35 PM »
The only research I've done about building a portfolio, is the reading I've done here and a couple books. I have a separate Vanguard account already, 100% VTI.
If I bring all my $ to Vanguard I think I'll need to pay the 0.3% to a personal advisor to help me allocate it correctly. That's part of the reason I was thinking of doing one year at Creative Solutions (the 1% fee would be about $2,000 for a year with what I have saved so far) - and they don't have any trading fees either - so once It's moved over - after a year, I can move the 3 accounts to Vanguard, for a total of $150 in transfer fees and I won't have to adjust anything - I can just let it ride.
Do you re-balance your accounts or is that not really necessary?  Thank you so much for your time to write back and help! Much appreciated!

NotJen

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Re: Creative Planning Firm vs. Vanguard for 1 year?
« Reply #3 on: December 11, 2020, 01:26:11 PM »
The only research I've done about building a portfolio, is the reading I've done here and a couple books. I have a separate Vanguard account already, 100% VTI.
If I bring all my $ to Vanguard I think I'll need to pay the 0.3% to a personal advisor to help me allocate it correctly. That's part of the reason I was thinking of doing one year at Creative Solutions (the 1% fee would be about $2,000 for a year with what I have saved so far) - and they don't have any trading fees either - so once It's moved over - after a year, I can move the 3 accounts to Vanguard, for a total of $150 in transfer fees and I won't have to adjust anything - I can just let it ride.
Do you re-balance your accounts or is that not really necessary?  Thank you so much for your time to write back and help! Much appreciated!

Yes, I rebalance.  When I was working, I did most of it with my contributions - my work 401k was in a Target Date fund - so no messing with that, but when I contributed to Roth or taxable, I could allocate based on bringing my AA back in line - and if it got way off or I needed more bonds, I just juggled around the funds in the SEP and Roth.

I did a lot of reading on the Bogleheads site (https://www.bogleheads.org/wiki/Getting_started) when I started investing on my own, and am very happy with my 3-fund portfolio (VTSAX, VTIAX, and VTBLX).  It is very easy to manage.  I started with a Roth at Vanguard only, then transferred SEP and Roth funds from EJ.  Later, I added a taxable account.  This year, I rolled over the 401k from my previous job.

Rob_bob

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Re: Creative Planning Firm vs. Vanguard for 1 year?
« Reply #4 on: December 11, 2020, 02:42:38 PM »
I think you would do well with the three fund portfolio as well.  The only thing you might need advice on is the asset allocation for your age and risk/volatility tolerance.

I would skip the advisor firm and go straight to Vanguard.

BethMI

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Re: Creative Planning Firm vs. Vanguard for 1 year?
« Reply #5 on: December 11, 2020, 03:02:49 PM »
Would it be worthwhile to move it all over to Vanguard and use one of their advisors to get it set up (0.3%) to start with?

NotJen

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Re: Creative Planning Firm vs. Vanguard for 1 year?
« Reply #6 on: December 11, 2020, 03:33:51 PM »
What do you want their advisors to tell you?

Have you looked at flat-fee advisors?  Compare that to the 0.3% fee and see how they compare first.  Also, how do you get out of the advisor services when you no longer want them?

Vanguard has a questionnaire for determining asset allocation (there might be similar calculators elsewhere): https://investor.vanguard.com/retirement/savings/picking-an-asset-mix

theolympians

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Re: Creative Planning Firm vs. Vanguard for 1 year?
« Reply #7 on: December 11, 2020, 04:35:02 PM »
1% is a steep fee. I just moved my roth IRA to vanguard from EJ. Bit of story how I got there:

Not knowing too much went with EJ ten years ago. Whenever they bought anything, they got a commission. That saps over time (though I am mostly buy and hold). Last year or so the advisor sold me and the wife on "guided solutions" a program that charges 1% per year and the trades were free...The same as the poster above. A few months pass and I checked our statements. Like clockwork every month they docked our accounts. My wife's IRA LOST money in the largest runup in years.....We talked to our advisor and he put us back on commission. Anyway, that left a bad taste in the mouth.

Anyhoo, moved my IRA to vanguard. Once you open an account there you have the option for them to automatically contact EJ and transfer the funds. One or two clicks, that simple. It didn't cost my anything to move the funds. Trades are free. Vanguard has lots of investment options. I  believe all there funds have a low expense ratio.

The original poster indicated that the Tony Robbins affiliate charges 1% and the trades are free. That one percent will eat into your gains, see above. The trades have to be free or very little of your money would be left.

Check online and find a financial advisor that charges by the hour or flat fee to recommend funds and set up a financial plan. Pay the person for a couple hours work, then invest your money in vanguard (or like service). I wouldn't use the group that Tony Robbins recommended as they will ultimately hard sell their 1% rate--which sucks.

A the end of the day, if you are are a buy and hold person with a long timeline, pick a couple vanguard funds, sock money into them every pay day, then check back in 10-20 years, or more. You will be good, with the added benefit of a company NOT siphoning off your cash.

Ride out the highs and lows, just keep adding money!

Steeze

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Re: Creative Planning Firm vs. Vanguard for 1 year?
« Reply #8 on: December 11, 2020, 07:41:07 PM »
Throw it all in vanguard, choose a target date fund which is your traditional retirement age. Those funds are properly allocated with slightly higher fees than holding the funds individually. You will only need to buy one fund, easy. It rebalances the allocation automatically.

Then read. Read everything. When you are sick of reading personal finance books, forums, and blogs - then consider doing the allocation and rebalancing yourself to save the 0.05% they charge you in the target date fund, if it is worth it to you.