Author Topic: Should I Fire My Financial Advisor?  (Read 10596 times)

StubbleinOhio

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Should I Fire My Financial Advisor?
« on: March 01, 2016, 05:48:47 PM »
I'm furious at the moment. I need help not making a terrible decision. My brain is telling me "don't sell when the market is down" but my heart is telling me "he can't out perform the Vanguard Index Fund".

Here's the scoop:

In 2013, when the wife and I were new to investing, we did our research and found a "good" fiduciary financial advisor in town. After checking multiple references, we gave him all of our savings at the time and crossed our fingers. I also rolled in my SEP IRA to him too. He had all the fancy charts and graphs that showed his wealth managers have averaged 10%+ over their lifetime and although "past results are not an indication of future gains" he was confident we should see good returns. We've been throwing him good chunks of money here and there and tried not to look at it.

Then today, after the http://www.mrmoneymustache.com/2016/02/29/what-to-do-about-this-scary-stock-market/ post, I looked a bit closer at the Vanguard Total Stock Market fund and saw that last year it returned -8%. Then I decided to really dig into my portfolio with this advisor just to see if he really was doing better than the market. Come to find out, one account returned -15.9% and the other is just as bad. I knew they weren't doing well but I didn't know that the index fund was doing that much better. I assumed the high risk of the index fund would have cost us more than I was already losing.

He's been sending multiple emails saying "stay the course. In 2009 our advisors saw 40%+ gains. This is normal." And while I agree that the market goes up and down, when I see that a person I've paid $2,000 last year lost me almost double what the index fund would have, it makes me think.

I don't want to sell when everything is down and lose all that stash but I also want to stop the bleeding.

What do I do here?

Interest Compound

  • Pencil Stache
  • ****
  • Posts: 658
Re: Should I Fire My Financial Advisor?
« Reply #1 on: March 01, 2016, 06:00:26 PM »
If you're going to switch to the index, it can't be because you feel it's doing better lately than your current investments. That will simply result in jumping into a different fund next year. It has to be because you understand the reasoning behind indexing.

Do you?

nereo

  • Senior Mustachian
  • ********
  • Posts: 11313
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Should I Fire My Financial Advisor?
« Reply #2 on: March 01, 2016, 06:05:20 PM »
Something to consider.  When you rebalance your portfolio you don't consider it "selling," regardless of whether the market is up, down or sideways.  That's because you are selling one thing to purchase something else. 

Similar forces are at work here.  If you move all of your money held by your financial guy into (for example) Vanguard, you're not selling when the market is down - you're still invested - you're just shifting what you own and who controls it.

The real question here is whether you have faith that he will have outsized returns going forward.

What would be a really BAD idea is if you sold all your equities and decided to start holding cash. That's exactly how you "sell low" and lock in your losses..

deeshen13

  • 5 O'Clock Shadow
  • *
  • Posts: 93
Re: Should I Fire My Financial Advisor?
« Reply #3 on: March 01, 2016, 06:34:16 PM »
Yes you should.  You want to hold productive assets (stocks) in an ownership capacity so as to take part in their earnings.

Currently, you are doing so by hiring FA guy (1% fee), so he can put you in his favorite mutual funds of the day (0.5-1% fee), which then purchase the companies you are trying to own (Apple, Google, Whole Foods, British Petroleum, etc. etc. etc.).  That is 1.5-2% in completely unnecessary frictional costs.  1.5-2% is not insignificant, it's 1/4 of your expected long-term return!

Instead, you could buy Vanguard index funds (0.05% fee) in order to have the same ownership in these companies.

There's really only two reasons to keep FA guy: 1) You need the hand holding to stay invested in the market because left to yourself you will market-time, panic-sell, etc. 2) He is providing exceptional planning expertise you would have to pay an equivalent amount elsewhere to get (taxes-CPA, social security, insurance, etc).  Again, even with 2), you can and should be learning about this stuff yourself, or it isn't hard to hire out on one-time basis if badly needed.

Finally, the SP500 had a total return in 2015 of 1.28%.  If he returned -15.9%, he is taking on an unreasonable level of tracking error, and uncompensated risk.  That is obscene under performance for a FA, but also not surprising.

I work at an Registered Investment Advisor firm in the investments and planning groups.  Good luck.

EDIT: Oh, and as a poster above mentioned, you're not selling at a bottom or w/e.  You're simply allocating the same holdings to a different custodian (FA guy to Vanguard).  You will own a relatively similar (or most likely improved) basket of stocks.
« Last Edit: March 01, 2016, 06:36:17 PM by deeshen13 »

Seppia

  • Pencil Stache
  • ****
  • Posts: 616
  • Age: 39
  • Location: NYC
Re: Should I Fire My Financial Advisor?
« Reply #4 on: March 01, 2016, 06:46:25 PM »

The answer should be split in two parts:

1
Yes of course if the advisor charges a fix fee you should cut bait ASAP, as in the long term you would certainly do significantly better without him.
Only if an advisor presented himself as such:
"I have all my holdings into the fund I manage, I will charge you no fix fee, only X% of the profits I make" would I ever maybe possibly give him a chance with a small percentage of my money.

2

If you're going to switch to the index, it can't be because you feel it's doing better lately than your current investments. That will simply result in jumping into a different fund next year. It has to be because you understand the reasoning behind indexing.

Do you?

This part is key
You cannot base your decisions on anything that's shorter than 10-15 years

PhysicianOnFIRE

  • Bristles
  • ***
  • Posts: 452
  • Location: Up North
    • Physician On FIRE
Re: Should I Fire My Financial Advisor?
« Reply #5 on: March 01, 2016, 10:05:46 PM »
in 2015 the Vanguard Total Stock Market Index was not down 8%, it was up 0.3% 

You should dump the fiduciary when you have a better understanding of your finances.  If you are ready to jump ship now, there is nothing wrong with "selling low" unless you stay out of the markets entirely.  Buying into TSM now will have you "buying low" as well, or at least at the same level as you sold.

Finally, I'll give my standard answer to questions like this, which is You need an Investor Policy Statement (see my signature).  Or at least an asset allocation that works for you.  Congrats on seeing the light... take your time and get on the right path.

Best
-PoF

StubbleinOhio

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Should I Fire My Financial Advisor?
« Reply #6 on: March 02, 2016, 06:38:16 AM »
It has to be because you understand the reasoning behind indexing.

Do you?

When I read that, my first reaction was, "Maybe?"

My thoughts in a small, small nutshell are that buying an index fund is buying into the stock market as a whole which over the long term, has always gone up. Long term being the key. Index funds are also much cheaper to own than an actively managed portfolio which again, over the long term, adds up.

I understand that we've only given this advisor just under three years. Over that time we've seen -12.5% returns. With FI hopefully only 12 (of our planned 15) years away, I am having trouble thinking that I'm 20% of the way there but moving away from my goal.


1
Only if an advisor presented himself as such:
"I have all my holdings into the fund I manage, I will charge you no fix fee, only X% of the profits I make" would I ever maybe possibly give him a chance with a small percentage of my money.

2

You cannot base your decisions on anything that's shorter than 10-15 years

So with that, I haven't given this guy long enough to prove himself. BUT, should I be giving him more time? He is invested in the same things we are but charges a fee based on assets under management, not just on profits. That seems off to me. He loses money with the same managers but still makes money from us for getting us access to these managers that are losing us money.

The money managers my advisor uses are all based on the past ten years. Anyone can show a graph of what they've done but I'm concerned about the next 10-15 years. History is not on the manager's side. It's on the stock market's side. The stock market has always gone up over the long term. There are very few managers who have been able to consistently beat the stock market. That's the very simple reason why I'm now leaning towards index funds being the way to go over a manager.

Am I on the right track here?

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5145
Re: Should I Fire My Financial Advisor?
« Reply #7 on: March 02, 2016, 07:14:43 AM »
What funds has the FA invested your money in?

StubbleinOhio

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Should I Fire My Financial Advisor?
« Reply #8 on: March 02, 2016, 07:26:11 AM »
What funds has the FA invested your money in?

Right now they have us 50% cash. The rest is spread between: ABHIX, ATCSX, FHYTX, WHIAX and LAHYX. Only ATCSX is positive and has 40% of our total investments at the moment.
« Last Edit: March 02, 2016, 07:31:01 AM by StubbleinOhio »

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5145
Re: Should I Fire My Financial Advisor?
« Reply #9 on: March 02, 2016, 07:38:01 AM »
I would fire this guy immediately.  As in this morning.  He has your invested money in high-yield junk bonds.  WTH?  50 percent in cash and the rest in high-yield?  There is not a stock position in the portfolio unless I missed a fund.  I would call Vanguard or Fidelity and get the money moved ASAP, but make him get out of the junk bonds today.

FreeWheel

  • Stubble
  • **
  • Posts: 131
  • Location: Chicagoland
Re: Should I Fire My Financial Advisor?
« Reply #10 on: March 02, 2016, 07:40:34 AM »
I recently transferred my high expense ratio, actively managed funds with an advisor over to VG index funds. I knew it was the wisest decision and so do you. Just do it and don't look back. You won't regret it. What you will regret is staying where you're at!

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5145
Re: Should I Fire My Financial Advisor?
« Reply #11 on: March 02, 2016, 07:48:26 AM »
I don't know what credentials this guy has or how he represented himself to you, but this is the most egregiously inappropriate portfolio of investments I have seen in a long time.  I'm not convinced this portfolio even meets the "suitability" standard.  Did he explain the risks he was taking on your behalf?

Aphalite

  • Bristles
  • ***
  • Posts: 425
Re: Should I Fire My Financial Advisor?
« Reply #12 on: March 02, 2016, 07:53:52 AM »
So, the reason why you are down so much is because a lot of those funds you listed are FRONT LOADED funds

ATCSX, for example, is Anchor Tactical Credit Strategies Fund Class A, which has a front load fee of 5.75%, it is also entirely inappropriate for your situation since the fund is allocated 55/45 to cash/bonds. This makes up 40% of your portfolio?

Your advisor likely took a commission for putting you into that fund, I would run away as quickly as possible. The front loaded fees are gone, you can't get it back, best to take your losses as a very expensive lesson and start over on your own, without the "helpers"

Aphalite

  • Bristles
  • ***
  • Posts: 425
Re: Should I Fire My Financial Advisor?
« Reply #13 on: March 02, 2016, 07:58:13 AM »
Another Reader is right - the more I look at it - nothing but rage

Do you have the documentation he gave you in your first meetings? I'm not sure if you have any recourse, but could be worth it to research (at least surface level) cost/benefit as well as probability of success via legal action

plainjane

  • Handlebar Stache
  • *****
  • Posts: 1675
Re: Should I Fire My Financial Advisor?
« Reply #14 on: March 02, 2016, 08:02:34 AM »
ATCSX, for example, is Anchor Tactical Credit Strategies Fund Class A, which has a front load fee of 5.75%, it is also entirely inappropriate for your situation since the fund is allocated 55/45 to cash/bonds. This makes up 40% of your portfolio?

WTF?!?!?  They're taking your money to put you into cash and bonds?  Horrific.

50% cash
and 40% that is split 55/45

That would put you at 72% pure cash.

Heckler

  • Handlebar Stache
  • *****
  • Posts: 1347
Re: Should I Fire My Financial Advisor?
« Reply #15 on: March 02, 2016, 08:13:06 AM »
Sounds like you'd best start learning to manage your own future.  Fast.

https://www.bogleheads.org/wiki/Bogleheads#Investing_philosophy
« Last Edit: March 03, 2016, 08:46:09 AM by Heckler »

capitalninja

  • Stubble
  • **
  • Posts: 102
  • Know what the other guy is making on the deal...
    • Entrepreneur, Investor, Life Advice
Re: Should I Fire My Financial Advisor?
« Reply #16 on: March 02, 2016, 09:24:19 AM »
What funds has the FA invested your money in?

Right now they have us 50% cash. The rest is spread between: ABHIX, ATCSX, FHYTX, WHIAX and LAHYX. Only ATCSX is positive and has 40% of our total investments at the moment.

Fired, Fired, Fired, Fired and Fired. He has you "invested" in trash with an average expense ratio of 1.3% PLUS a 4% front end load in the case of ABHIX. Let's not also forget that he gets his commission for AUM which I imagine is at least 1%. So you're effectively paying AT LEAST 2.3% compounded to lose money in what amount to speculations.

Also why is he holding half of your investible capital in cash? The past 6 months (Late Aug, Sept, Jan, Feb in particular), have been some of the best buying opportunities in recent years.

This guy is either getting kickbacks from these funds or is truly an idiot. Either way, he's not someone that I would let handle my money.

He is the weakest link... Goodbye.
« Last Edit: March 02, 2016, 09:31:05 AM by capitalninja »

BFGirl

  • Pencil Stache
  • ****
  • Posts: 719
Re: Should I Fire My Financial Advisor?
« Reply #17 on: March 02, 2016, 09:44:46 AM »
I also have a financial advisor who takes a percentage.  I am willing to do this until I am comfortable investing for myself (got large cash lump sum and IRA as part of divorce).  However, I have full say so over the investments and my advisor answers all my questions.   I am 35% stocks, 60% bonds and 5% cash.  Whether you keep an advisor or not, you need to be responsible for knowing what you are invested in and you need to realistically look at what your returns are projected to be less the fees.  I started investing at the high end of the market, but am only down less than .5% currently after fees.  I will see what the next year or so brings, but I am eventually planning to try and manage my own investments and cut out the fee. For now, I feel like I am benefiting by paying the fee, because my advisor takes time to go through charts with me and explain various strategies to me.  I would refuse to pay a fee and give someone else carte blanche over my money.
« Last Edit: March 02, 2016, 09:53:32 AM by BFGirl »

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: Should I Fire My Financial Advisor?
« Reply #18 on: March 02, 2016, 09:49:55 AM »
Yikes. You would be better off using something like Personal Capital than using this guy. I would have a hard time being in the same room as him. What a scumbag.

BlueHouse

  • Magnum Stache
  • ******
  • Posts: 3275
  • Location: WDC
Re: Should I Fire My Financial Advisor?
« Reply #19 on: March 02, 2016, 10:23:46 AM »
... am only down less than .5% currently after fees.

You may want to stop focusing on counting your earnings "after fees".  You need to measure success by what the end result is to you, not to your advisor. 

Travis

  • Magnum Stache
  • ******
  • Posts: 2692
  • Location: South Korea
Re: Should I Fire My Financial Advisor?
« Reply #20 on: March 02, 2016, 12:23:05 PM »
Yikes. You would be better off using something like Personal Capital than using this guy. I would have a hard time being in the same room as him. What a scumbag.

If you need any more convincing than what previous posters have said, make a free account in Personal Capital and upload your portfolio. PC will track it by ticker name and tell you everything you need to know about your portfolio.  The robo-adviser will give you face punches for what you're into.  Before I got into Vanguard and rebalanced to something reasonable, I did this and found out over a 20 year horizon I was going to lose 19% of my net worth to fees. I had a paid adviser charging me 1% and he had me in 20 mutual funds with expenses from .3% all the way up to 1.3%.  Two years ago when the total market did 13% I was flat due to this portfolio.

You're in junk bonds ranging from .8 to 1% fees. Add in his 1% fee, and you're losing 2% off the top just for the privilege of showing up. ATCSX is a brand new fund (created in September), has at least a 1% expense fee, a 5.75% front load, and his 1% fee. This fund will have to make over 6% for you to break even. Every year.

Quote
"stay the course. In 2009 our advisors saw 40%+ gains. This is normal."

Is he saying 2009 was normal? Or stay the course because it gets better?  If the latter, that is true; however, you can do what he's doing for free.  If the former, he's out of his mind and being criminal.

Get out. Get out yesterday.  I'm pretty sure you don't even need to be the one to fire him.  You can talk to Vanguard or Fidelity and they can do most of the work for you.
« Last Edit: March 02, 2016, 01:10:27 PM by Travis »

deeshen13

  • 5 O'Clock Shadow
  • *
  • Posts: 93
Re: Should I Fire My Financial Advisor?
« Reply #21 on: March 02, 2016, 12:58:03 PM »
Holy shit balls.  Worse than we could have imagined.  FA's like this really need to be reprimanded by FINRA.

He has half your money in cash, and 40% in ATCSX.  ATCSX is a tactical bond fund.  You are in the accumulation point of your life; you shouldn't be half cash/half bonds.  Bizarre.

Worse yet, ATCSX has a 5.75% front load-fee, Management Fee of 1.6%-2.89%, and a 12b-1 fee (the back scratching fee your advisor got for putting you in this shit) of 0.25%.

You basically are paying management fee (1.0%) + front-load fee (5.75%) + 12b-1 fee (0.25%) + mutual fund fee (1.6-2.89%) in order to own cash+bonds.  It really is insane out there.  This guy is the antithesis of fiduciary.

To be honest, you may be able to take legal action regarding the final point. He's supposed to be meeting a fiduciary standard, and he's not even meeting the suitability standard.  He would lose his license quite likely.
« Last Edit: March 02, 2016, 01:04:25 PM by deeshen13 »

Kaspian

  • Handlebar Stache
  • *****
  • Posts: 1536
  • Location: Canada
    • My Necronomicon of Badassity
Re: Should I Fire My Financial Advisor?
« Reply #22 on: March 02, 2016, 01:26:35 PM »
Come to find out, one account returned -15.9% and the other is just as bad. I knew they weren't doing well but I didn't know ...
What do I do here?

Here's a question for you:  Would you buy more of it?  If no, then why?  Because what you're saying is you expect huge recoveries from the fund so then why wouldn't you put even cash in if you think it's going to do so extremely well in the future?  Money is money--it's only worth what it is at this very moment, not what it once was.  If you wouldn't buy more then get rid of it.

Eric

  • Magnum Stache
  • ******
  • Posts: 4061
  • Location: On my bike
Re: Should I Fire My Financial Advisor?
« Reply #23 on: March 02, 2016, 01:39:27 PM »
I'll echo everyone else.  There's absolutely no way what you're invested in aligns with your goals.  It's impossible.  And those fees and front end loads.  Ugh. 

You can do this!  Move your money to Vanguard or Fidelity right now.  Today.  Then either pick a target date fund (choose the date that you'd reach "normal" retirement age, not your early retirement date since these funds don't know about FIRE) and put everything in that, or pick a lazy portfolio allocation and put everything towards that.

If you want a real world example, I hold 3 funds.  50% VTSAX, 30% VTIAX, and 20% VBTLX.  That's an 80/20 stock/bond portfolio with a nice mix of domestic and international.

This guy is either getting kickbacks from these funds or is truly an idiot. Either way, he's not someone that I would let handle my money.

Agreed.

steveo

  • Handlebar Stache
  • *****
  • Posts: 1944
Re: Should I Fire My Financial Advisor?
« Reply #24 on: March 02, 2016, 01:46:26 PM »
I recently transferred my high expense ratio, actively managed funds with an advisor over to VG index funds. I knew it was the wisest decision and so do you. Just do it and don't look back. You won't regret it. What you will regret is staying where you're at!

I saw this thread topic and my answer before reading this thread was yes you should fire your advisor.

This post is spot on. Get the odds in your favour but getting the costs as low as possible and diversifying your investments in an index fund. You do need to pick an asset allocation but that doesn't have to be complex. I think a simple 3 fund portfolio on bogleheads will serve you well. It doesn't require a tonne of thought prior to investing and it doesn't require a tonne of oversight from yourself.


ysette9

  • Walrus Stache
  • *******
  • Posts: 5962
  • Location: Bay Area, CA
    • Insert Snappy Title Here (Journal)
Re: Should I Fire My Financial Advisor?
« Reply #25 on: March 02, 2016, 01:48:10 PM »
Holy bajesus - this is quite the train wreck of a financial adviser story. I can't wait to hear what the OP does and how this unfolds. Get thee to Vanguard immediately!

BlueHouse

  • Magnum Stache
  • ******
  • Posts: 3275
  • Location: WDC
Re: Should I Fire My Financial Advisor?
« Reply #26 on: March 03, 2016, 06:32:48 AM »

In 2013, when the wife and I were new to investing, we did our research and found a "good" fiduciary financial advisor in town. After checking multiple references, we gave him all of our savings ...

What do I do here?

Frankly, I'd be tempted to redact any specific info about who and then take the responses to your post in their entirety and send them to your town newpaper. Not about punishing the guy, but to make other people in town think about their own finances and rethink recommending advisors when they haven't done their own homework.
Imagine the shock when "regular" people read these actionable comments.

Heckler

  • Handlebar Stache
  • *****
  • Posts: 1347
Re: Should I Fire My Financial Advisor?
« Reply #27 on: March 03, 2016, 08:46:31 AM »
Sounds like you'd best start learning to manage your own future.  Fast.

https://www.bogleheads.org/wiki/Bogleheads#Investing_philosophy

Fixed the link.

acroy

  • Handlebar Stache
  • *****
  • Posts: 1702
  • Age: 42
  • Location: Dallas TX
    • SWAMI
Re: Should I Fire My Financial Advisor?
« Reply #28 on: March 03, 2016, 08:51:56 AM »
ALWAYS fire the FA
They 'skim the cream'. They are in business for themselves, not for you.
Yes there are some good ones, but the other 99.9% are legalized, regulated, professional scam artists.

BFGirl

  • Pencil Stache
  • ****
  • Posts: 719
Re: Should I Fire My Financial Advisor?
« Reply #29 on: March 03, 2016, 10:16:40 AM »
... am only down less than .5% currently after fees.

You may want to stop focusing on counting your earnings "after fees".  You need to measure success by what the end result is to you, not to your advisor.

Yes, currently, it is worth the fees for the advice I am getting.  Not just looking at my returns.

Nickels Dimes Quarters

  • Stubble
  • **
  • Posts: 152
  • Location: Near the Middle
    • Nickels, Dimes & Quarters ~ It All Adds Up
Re: Should I Fire My Financial Advisor?
« Reply #30 on: March 04, 2016, 04:58:34 AM »
This is a sad thread to read, but if the OP takes control it may not be too late. I hope the OP comes back and let's us know what he choose to do.

NDQ

bnoooogers

  • 5 O'Clock Shadow
  • *
  • Posts: 4
Re: Should I Fire My Financial Advisor?
« Reply #31 on: March 04, 2016, 05:43:19 AM »
Other responses have justifiably gathered enough pitchforks to handle this particular scenario, but some are getting a bit carried away with hate for front end fees - they are a perfectly viable alternative to annual fees. When you have both front end load AND annual fees... get out.

Rufus.T.Firefly

  • Bristles
  • ***
  • Posts: 268
Re: Should I Fire My Financial Advisor?
« Reply #32 on: March 04, 2016, 06:41:09 AM »
YES and do it today.


StubbleinOhio

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Should I Fire My Financial Advisor?
« Reply #33 on: March 07, 2016, 12:07:15 PM »
Holy shit balls.  Worse than we could have imagined.  FA's like this really need to be reprimanded by FINRA.

He has half your money in cash, and 40% in ATCSX.  ATCSX is a tactical bond fund.  You are in the accumulation point of your life; you shouldn't be half cash/half bonds.  Bizarre.

Worse yet, ATCSX has a 5.75% front load-fee, Management Fee of 1.6%-2.89%, and a 12b-1 fee (the back scratching fee your advisor got for putting you in this shit) of 0.25%.

You basically are paying management fee (1.0%) + front-load fee (5.75%) + 12b-1 fee (0.25%) + mutual fund fee (1.6-2.89%) in order to own cash+bonds.  It really is insane out there.  This guy is the antithesis of fiduciary.

To be honest, you may be able to take legal action regarding the final point. He's supposed to be meeting a fiduciary standard, and he's not even meeting the suitability standard.  He would lose his license quite likely.

OP checking back in.

tl;dr - Our funds are being moved to Vanguard as I write this.

Here's what's happened:

We've tried to have a few conversations with our FA but haven't been able to connect. We were able to exchange some emails in which he explained his fees a bit more:

"The fees associated with the managed accounts are .6875% quarterly which equate to 2.75% annually.  Since we are a licensed Fiduciary we are not allowed to charge on loaded funds such as ATCSX.  ATCSX is a fund that is owned and managed by Anchor.  If an individual wanted to purchase ATCSX outright from a commissioned advisor than Anchor would charge them the front load - we do not charge any loads.  Anchor manages the credit strategies within ATCSX"

So while we weren't paying the front load fee, his management fee is still quite high to be performing so poorly.

We wanted to at least give him a chance to talk us through our positions and his reasons but our emails from him were defensive, short and a little rude.

We're done. Transfers have been initiated through Vanguard and we're no longer his clients.

Thank you to everyone on here for helping us realize this problem was even a bit worse than it seemed on the surface. We've been deep into the Bogleheads wiki ever since and re-reading everything on this forum in our spare moments. Thank you from our future selves too. On the day we reach our FI, we'll certainly remember this thread and how it reshaped our future.

Seppia

  • Pencil Stache
  • ****
  • Posts: 616
  • Age: 39
  • Location: NYC
Re: Should I Fire My Financial Advisor?
« Reply #34 on: March 07, 2016, 01:05:58 PM »
Great news, congrats on the move

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5145
Re: Should I Fire My Financial Advisor?
« Reply #35 on: March 07, 2016, 01:12:03 PM »
He's a LICENSED FIDUCIARY???  And he put you in JUNK BONDS? 

All I can say is I'm relieved you are getting out.  The portfolio he has you in may not even be suitable, but as a fiduciary, he has to adhere to a higher standard.

I would certainly talk to the people that recommended him in a friendly, non-confrontational way.  I would tell them that he put you in unsuitable, high-risk investments and charged you an outrageous fee to do so.  If they have not looked carefully at the fees and investments, you recommend that they do so.

Eric

  • Magnum Stache
  • ******
  • Posts: 4061
  • Location: On my bike
Re: Should I Fire My Financial Advisor?
« Reply #36 on: March 07, 2016, 02:13:07 PM »
Our funds are being moved to Vanguard as I write this.


steveo

  • Handlebar Stache
  • *****
  • Posts: 1944
Re: Should I Fire My Financial Advisor?
« Reply #37 on: March 07, 2016, 02:19:36 PM »
Well done.

Rufus.T.Firefly

  • Bristles
  • ***
  • Posts: 268
Re: Should I Fire My Financial Advisor?
« Reply #38 on: March 07, 2016, 06:55:39 PM »
Awesome! Major congrats on moving quickly and efficiently to correct the situation.

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 5707
  • Age: 1
  • Location: Earth
  • K Thnx Bye
Re: Should I Fire My Financial Advisor?
« Reply #39 on: March 07, 2016, 07:56:27 PM »
Great choice. If you are scared about being completely DIY Vanguard has an advisory service that is a mere .3% annually. I personally am 100% DIY but have recommended the service to friends who need to be saved from themselves in terms of investment behavior. 

Vertical Mode

  • Pencil Stache
  • ****
  • Posts: 510
  • Location: Boston, MA
Re: Should I Fire My Financial Advisor?
« Reply #40 on: March 07, 2016, 11:21:36 PM »
Sometimes, if you have to ask...

I'm glad the pitchfork brigade showed up to lay into this FA's BS. 5.75% Front-loaded junk bonds for someone in your position are indefensible.

powersuitrecall

  • Pencil Stache
  • ****
  • Posts: 514
  • Location: Ontario, Canada
Re: Should I Fire My Financial Advisor?
« Reply #41 on: March 08, 2016, 07:51:10 AM »
I went through something similar years ago. 

I handed the reigns to my FA after the 2009 crash when I lost my job.  Although he was wise enough to keep me in the market, everything was scattered about in a handful of high fee funds and a mish mash of energy/financial stocks.  Things went well for a while (how could it not!) but when I started pushing for a low cost / diversified mix there was a fair bit of resistance (or in some cases, my emails were met with crickets). 

I calculated the fees we were paying this guy and said enough is enough.  We managed to cut loose and properly diversify before the big oil correction in 2014 (lucky).  We haven't looked back since.

Congrats!  It takes some courage to make this kind of change.  You did it!

PARedbeard

  • Stubble
  • **
  • Posts: 152
  • Location: Pennsylvania
Re: Should I Fire My Financial Advisor?
« Reply #42 on: March 08, 2016, 08:17:17 AM »
Good call, OP.