Author Topic: Thinking of leaving my financial advisor, what do you think?  (Read 5085 times)

Habilis

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I've worked with this financial planner for a few years, she's helped allocate an inheritance IRA into a bunch of relatively high cost funds, and she charged 1% per year. I'm not seeing the value and I'm thinking of managing my investments myself. Here's what I'm looking at

$100k inheritance IRA
$38k Roth IRA
$125k 401k

This would be my investment approach:
Asset allocation: 40% SP500 index, 50% small cap index, 10% international index
Low cost: index funds with .05% expense ratios or lower
Annual or quarterly rebalancing to maintain desired allocaiton

Am I missing something? 1% a year doesn't seem worth it for things I can do myself. I'd love to hear your thoughts and opinions.

waltworks

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #1 on: July 08, 2014, 11:14:13 AM »
Yup, ditch her. If you know what an index fund is, you know enough not to get yourself in trouble, IMO.

-W

Mr. FI

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #2 on: July 08, 2014, 11:23:23 AM »
Agreed. Few if any advisor is worth the fees they charge. And keep educating yourself on investing, it will save you loads of money going forward.

matchewed

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #3 on: July 08, 2014, 11:26:13 AM »
Percent based financial advisors aren't necessary IMO. Unless they can prove that their performance has consistently been greater than the fee the charge versus what you could get elsewhere by managing your own through index funds... I'm pretty certain few financial advisors can prove that.

soccerluvof4

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #4 on: July 08, 2014, 11:29:39 AM »
Yep...ditch her. I agree with the reasons matchewed stated.

Numbers Man

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #5 on: July 08, 2014, 11:56:21 AM »
Go for it. I see a breakup in your future, lol.

GGNoob

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #6 on: July 08, 2014, 01:35:31 PM »
I'd move that money to lower cost index funds as soon as you can.

My younger half-brother got a lot of money when his dad passed away. At age 20, he's reading and understanding more and more about investments. Just yesterday he withdrew $75,000 from his account with his financial advisor because he was being charged 1.35% for the advisor fee on top of expensive funds. He's moving it over to a couple of Admiral Shares funds at Vanguard.

Maybe its just me, but I'd do some more research to picking the right allocation. You may want to be have more stocks in international markets. Personally, I went with the Total Stock Market Index Admiral Shares  (VTSAX) and Total International Stock Index Admiral Shares (VTIAX) with a 50/50 split for the stocks in our HSA. The overall HSA account is 45%/45%/10% with the 10% being in the Total Bond Market Index Admiral Shares (VBTLX). Most Vanguard Target Date funds have roughly 30% in international stocks/bonds and the Vanguard Total World Stock Index has only 52% North America with the other 48% international. Just a thought, but of course the asset allocation comes down to whatever you are comfortable with.
« Last Edit: July 08, 2014, 01:40:11 PM by logant1337 »

forestbound

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #7 on: July 08, 2014, 03:49:41 PM »
I ditched my financial advisor about 2 years ago. I only wish I had done it sooner. Do it!

Check this site for other investment ideas:
http://jlcollinsnh.com/stock-series/

Mr. Frugalwoods

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #8 on: July 08, 2014, 07:18:57 PM »
Make her take you out to lunch and then ditch her.  Order lots of wine.

Habilis

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #9 on: July 08, 2014, 07:22:02 PM »
Thanks to all for the advice. You're reinforcing what I was already feeling in my gut.

About the wine, that's funny, but I could never do that! She's an honest professional and so am I and I've already told her I'm weighing the decision to leave, so it won't come as a surprise. It really does feel like breaking up with a girlfriend :)

Frankies Girl

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #10 on: July 09, 2014, 09:39:12 AM »
I had managed professional fees when I first inherited because I was still trying to learn as well. Once I figured out what I wanted to do, I pulled everything out and now manage it myself due to learning how to set up a lazy/passive portfolio. As long as you have a good idea of what you want to be invested in, and basic understanding (which if you're reading on here and learning, you should be good) totally ditch the managed fees and adviser and do it yourself.


nereo

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #11 on: July 09, 2014, 10:15:09 AM »
Look at it this way.  You are paying her $2,630 per year, and that amount is only going to go up as your 'stach gets larger.

Are her services worth $2,600 to you? Will she be worth $4-5,000 in a couple of years to you?

frugalnacho

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #12 on: July 09, 2014, 02:20:16 PM »
Thanks to all for the advice. You're reinforcing what I was already feeling in my gut.

About the wine, that's funny, but I could never do that! She's an honest professional and so am I and I've already told her I'm weighing the decision to leave, so it won't come as a surprise. It really does feel like breaking up with a girlfriend :)

...she's helped allocate an inheritance IRA into a bunch of relatively high cost funds, and she charged 1% per year.

:O

I'm not so sure about that honest professional part.  Sounds like she is knowingly fleecing you for profit. 

Habilis

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Re: Thinking of leaving my financial advisor, what do you think?
« Reply #13 on: July 09, 2014, 05:34:19 PM »
I guess it's impossible to know, but my read is that her intentions are good. I just have to do the best thing for myself.