Hi! I need help sorting out my finances. I have a taxable investment account and a Roth IRA that are managed by my family's financial adviser. Some of the money was invested by the current adviser and some by a previous adviser (who was an idiot). I don't think the current adviser is doing a terrible job, but I also don't think he's adding enough value to be worth the approx 0.7% fee I'm paying. The problem is, while I feel confident of my ability to invest the new money I deposit (in low-cost index funds of course) I feel much less confident about sorting out the mix of stock, bonds and various funds that my money is currently in (a nice problem to have, I know).
The way I see it, I have the option to sell my current holdings and buy index funds, or leave them as they are and just invest the new money in index funds, or something in the middle. This account was set up by my parents ages ago, and some of the stocks and funds are mostly capital gains. Based on my tax bracket I would pay 15% on capital gains now, plus state income tax; I anticipate being in a lower bracket when I FIRE, so I think it may make sense to keep those funds even though they have higher expense ratios, but I'm not sure. Obviously for the stuff in my Roth there aren't tax implications so I want to sell the high-cost funds asap. But the whole situation is a bit overwhelming to be and I've been hesitating to actually fire the guy and take over.
I plan to FIRE in 5-10 years (I know this is not very precise--it depends a lot on whether my income stays the same or increases, and how the market does). At that point I would sell my highest-cost holdings first and make sure I'm in a tax bracket where I don't have to pay capital gains.
Here is a summary of my current investments (both in Schwab):
Taxable Account: $150,000
$60,000: various individual stocks, all large well-known companies
$10,000: Short term US treasury ETF (0.08% expense ratio)
$10,000: US TIPS ETF (0.07% expense ratio)
$6,000: Short-term bond fund (0.1% expense ratio)
$25,000: American Fund New Prospects (0.76% expense ratio, but cost basis is only $8,000, so it's mostly cap gains)
$10,000: "fixed income," I don't know what this means
$29,000: Cash (mostly recently deposited, to be invested over time for dollar-cost averaging)
Roth IRA: $35,000
$1,000: American Fund Europacific (0.87%)
$1,500: American Fund New World (1.02%)
$1,500: Oppenheimer Developing Markets Fund (1.32%)
$2,000: International Index Fund (0.19%)
$14,000: S&P 500 Index Fund (0.09%)
$3,000: Small Cap Index Fund (0.17%)
$500: Bond Fund (0.55%)
$11,500: Cash
I also have about $40,000 invested with a family member in bonds (no fee); he's very good at bond trading so I think it makes sense to keep most/all of the money I have in bonds with him, and have my other accounts be mostly or all stock.
Anyone have any advice?