Author Topic: Dear Financial Advisor, it's over and I'm going steady with Vanguard  (Read 3645 times)

eddieryan

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Yeah, I know, this subject comes up a lot, but the thing is, my FA is legitimately a very dear friend going back many years. Thinking about how to break things off with him causes anxiety and is the sole reason I haven't ended things sooner. He set me up with some funds 38 months ago with 5.5% front loaded fees and these funds are getting laughed at by the major indexes. It's simple, really, I need to just pull the plug right away and move them into VTSAX. What I need is just a nudge that I shouldn't wait any longer and some pointers on a good way to do this from someone who has been down this road. I'm thinking a friendly email that I'm a newly indoctrinated Boglehead is the reason for this. I'll keep it short and change the subject to another matter towards the end of the email. It would really be just a heads up courtesy email before I contact Vanguard to handle the transaction.

It's easy to look at this situation and make fun of it, but this is truly an emotional subject and I've had this discussion with friends who have also not ditched their high cost funds for this reason.

Vindicated

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #1 on: March 02, 2017, 06:46:13 AM »
Is your friendship with your FA worth the 3-5% you're paying to be friends with him?  I doubt it.

Send something like this:

Good morning, Bobby.

First I want to thank you for all the work you've done for me for the past X years.  You have provided some great advice, and helped me to get to where I am now.

Unfortunately, my financial situation has matured, and my goals for growth are not being met to my expected level.  To get me out of this rut, I'm going to explore new investment strategies on my own.

I greatly appreciate your service, and I hope that we can keep in touch over lunch or drinks in the future.

Best Regards,
Eddie

Car Jack

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #2 on: March 02, 2017, 06:49:32 AM »
Just buy him a new BMW every year.  If your portfolio is big enough, that's what you're already doing.

You don't have to talk with him at all.  Wherever you're going, have them pull out all the money.  You'll find out if your "friend" is really a friend or not.  Most sales and multi-level marketing companies tell new sales people to pedal their crap to family and friends.  Edward Jones sales training material specifically says to do this, for example.

NoStacheOhio

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #3 on: March 02, 2017, 06:50:24 AM »
Any friend who puts you in funds with a 5.5% front load (and presumably high ongoing management fees) isn't a very good friend. Either that or he's stupid.

SweetLife

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #4 on: March 03, 2017, 05:43:12 AM »
If this is an important relationship to you your idea in your first post seems like the best way to go. Or just tell him the truth you are in love with MMM's advice and want to "do it all yourself" :)  He may think your crazy but that's ok and then go out for drinks with him/invite him over (more mustachian) and give him the low down :)

Good luck .

Rubic

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #5 on: March 03, 2017, 06:57:11 AM »
Just fill out the paperwork with Vanguard and the transfer will proceed.

You don't need to talk to your "friend" about this until he brings up the
subject and then you'll be discussing an action that has already been taken.

Your friend has already managed to screw you over with the front loaded
fees which resulted in him getting a fat commission, so there's no reason
for him to act to be the one acting butt hurt.

Nangirl17

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #6 on: March 03, 2017, 09:48:17 AM »
This is me.

One of my financial goals this year is to start a Vanguard account, but I'm dreading the conversation, because my FA truly got me off to a good start when I was fresh out of school. I'm hoping she will agree to stay on as fee for service to help me out, as there is lots I need to learn, especially as I retire.

mpcharles

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #7 on: March 05, 2017, 04:17:50 PM »
Jesus, if you can't stand up to your FA good luck defending your wife, kids, sister from an home intruder. Don't be a coward.

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MOD EDIT: Please don't be rude.
« Last Edit: March 06, 2017, 02:45:49 AM by arebelspy »

Nangirl17

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #8 on: March 05, 2017, 04:41:50 PM »
Jesus, if you can't stand up to your FA good luck defending your wife, kids, sister from an home intruder. Don't be a coward.

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If you can't be civil, good luck having friends. Don't be a jerk.

Rocket

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #9 on: March 05, 2017, 06:17:24 PM »
A good lesson to take from this would be to keep business and friendship/family separate.

Mr Mark

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #10 on: March 05, 2017, 09:25:27 PM »
Just fill out the paperwork with Vanguard and the transfer will proceed.

You don't need to talk to your "friend" about this until he brings up the
subject and then you'll be discussing an action that has already been taken.

Your friend has already managed to screw you over with the front loaded
fees which resulted in him getting a fat commission, so there's no reason
for him to act to be the one acting butt hurt.

^ this

You don't have feel any guilt. Business is business. 

bacchi

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #11 on: March 06, 2017, 08:27:22 AM »
Just fill out the paperwork with Vanguard and the transfer will proceed.

You don't need to talk to your "friend" about this until he brings up the
subject and then you'll be discussing an action that has already been taken.

Your friend has already managed to screw you over with the front loaded
fees which resulted in him getting a fat commission, so there's no reason
for him to act to be the one acting butt hurt.

^ this

You don't have feel any guilt. Business is business.

Yep. Like Chris22 mentioned, you're paying your FA-friend every year. That's business. Separate it from the friendship and start the Vanguard transfer. Don't let your FA-friend guilt you into staying.

PhoenixHeat

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #12 on: March 06, 2017, 08:13:58 PM »
Jesus, if you can't stand up to your FA good luck defending your wife, kids, sister from an home intruder. Don't be a coward.

Sent from my ASUS_Z00AD using Tapatalk

If you can't be civil, good luck having friends. Don't be a jerk.

I found mpcharles post creative. Accurate and agreeable too. 

NWOutlier

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #13 on: March 07, 2017, 12:02:29 AM »
When I made the change from Morgan Stanley - I didn't even call him.  I setup the xfer via Vanguard... and he called me  :)  "I wish you would have told me, etc.. yadda yadda yadda"...

but some context; I started with MS and my broker left after a few years (not making me any money during that time) ... so I was about to leave, so they sent me an experienced broker...  He conviced me to stay for a while longer, it was a good opportunity to start a test...  MS started with 100k of my money... I had just started a job with zero in my 401k... I gave him 5 years.  After 5 years, my fidelity 401k exceeded my MS account... and actually between the 1% fee and letting the professionals manage my money, they suceeded in losing 16k of the money over 5 years.

bottom line, they just don't have a vested interest in your success... YOU do.. so self direct, use low cost index funds (like Vanguard) and you will crush their performance over time.  now today, I'm WAY up, WAY WAY up - happy, boring investing, investing everything I get my hands on; Vanguard, VTSAX.. it goes up, it goes down - but the time horizon is always up...

excuse any typo's or grammar - whipped this one up fast due to the reminder or frustration for trusting my money to the professionals.  so, that's the context... one day, after reading many MMM, Mad Fientist, JLCollins and more - I emptied the account in 1 swoop coupled it with some other money I had and put it ALL in VTSAX... and I still continue to buy VTSAX (approx 20-25k/yr) .. if my 401k allowed it, I would do it there as well.. but Fidelity has a VTSAX equivelant (FSTVX).  so part of my yearly savings goes there.  Even my HSA (health savings account is FSTVX)...

The only thing I wish, was that I followed through the first time I wanted to leave MS - it was 2009, I opened a Vangaurd account, VTSAX was at 16 dollars a share... I didn't because the Morgan Stanley rep sold me on having the professionals manage my account for me...  when I finally figured it out it was 2013 and VTSAX was 43 dollars a share... but I bought it... and kept buying it.

4500+ shares and counting... I've come to a conclusion that it's more about number of shares now for me, than the dollar amount... the dollar amount or income created from it is based on shares... so I keep buying... 

My vanguard still has that 2009 cancelled transaction to remind me of my biggest mistake every made.  (I've attached it for your enjoyment) - but remember, I didn't come back to Vanguard until Sept 2013... 

Best Regards,   

NWOutlier (Steve)

« Last Edit: March 07, 2017, 12:09:10 AM by NWOutlier »

Retire-Canada

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Re: Dear Financial Advisor, it's over and I'm going steady with Vanguard
« Reply #14 on: March 07, 2017, 08:58:07 AM »
He set me up with some funds 38 months ago with 5.5% front loaded fees and these funds are getting laughed at by the major indexes.

He's not your friend. You are his meal ticket.