This is cross-posted from our
case study as it looks like it's not going to get any more replies, and this is a better forum for it anyway.
My wife has two IRAs currently. They were previously managed by her dad; we are only beginning to look at them now. I'm kind of new with investments so please bear with me.
The first (a Roth IRA) is from a settlement from a dog bite as a child, and is actively managed by a financial advisor (to whom I have never talked). The account is at Schwab.
The financial advisor is charging what appears to be 1%. We are invested in:
DIISX - ~15% - International Stock Index - Net expense ratio 0.60%
HLEMX - ~65% - Emerging Markets - Net expense ratio 1.46%
PTTDX - ~20% - Intermediate Term Bond - Net expense ratio 0.75%
This seems like an odd mix to me, and the expense ratios are concerning. I can trade directly through Schwab but it does tell me to "contact my financial advisor" before I do. This is my wife's IRA and only holds ~$1000.
Would it make sense to do any or all of the following?
- Fire the financial advisor and convert accounts to straight Schwab accounts
- Alternatively, call the financial advisor and seek advice
- Sell out of existing mutual funds
- Switch to something like
MMM's asset allocation recommendation (but using
equivalent low-cost Schwab funds as they have no trade cost) or a variation on a
Couch Potato portfolio, rebalancing every few months
The second account (traditional IRA) is a Principal Bank Safe Harbor IRA, which apparently was an automatic rollover from a previous 401k that she left at an employer. It appears to have no investments and looks to be a straight savings account, and is apparently being charged $30 / year in fees.
Do these sound like decent plans for the account?
- Transfer account to Schwab (or possibly Vanguard? It only has ~$1400 in it)
- Combine the IRA with her other Schwab IRA
- Invest as above
I'd love to hear any other suggestions you had as well. She does have a 401k; is it possible to roll an IRA into the 401k account at her current employer?