Fidelity Investments

[SurfDog]

Hi guys... I had my 'one on one' today with Fidelity Investments regarding rolling over my retirement buy-out and 401k moneys. I was really impressed with how thorough they were with my income and expense planning but their fees are .87 of the sum in the account, quarterly (yikes)... Is that about the 'norm' for these investment firms? Apreciate your thoughts... Later, SurfDog (about to be spending as much time in the water as out of it...--Yippee--)

[73ss454]

So, do you think it's OK to spend almost 4% on fees? There's gotta be a mistake and if there's not run as fast as you can.

[MasterBlaster]

Are you refering to Fidelity Advisory service fees or mutual fund expense ratios ?

If you are using their Advisory service then that fee will be on top of any mutual fund expenses.

Per the .87 (% I presume) fee that's fairly typical for a management fee. Depending on your stash size you may be able to find someone to manage it for less. However many firms charge more than that. For amounts over $2MM Vanguard only charges 0.2 % for their management fees.

The management fee may be well worth it if it keeps you from doing foolish things with the portfolio though.

73ss454: With Fidelity I don't beleive any of their funds would have expenses approaching your 4% number. Where did that number come from ?

[73ss454]

He said .87 quarterly.

[MasterBlaster]

No Fidelity Advisor fees are not that high. Here are their (annual fees) for one type of account.

For the first $500,000 1.10% For the next $500,000 or portion thereof 0.80% For the next $1,000,000 or portion thereof 0.70% For the next $999,999 or portion thereof 0.40%

Just for fun I looked up the Vanguard equivalent. They are:

First $1,000,0000 .75% Next $1,000,000 0.35% Subsequent amounts 0.20% There is however a lower bound floor of $4500 for their annual fees.

[MasterBlaster]

While I am at it, I might point out that rather than mutal funds they may buy stocks and bonds directly. So other than some trading fees there shouldn't be much ongoing expense ratio fees and 12-1b fees (as well as transaction fees).

That is especially true for large portfolios.

For large portfolios it just may be that the advisor fees are less than many mutual funds expenses.

[SurfDog]

Quote:

Originally Posted by MasterBlaster Are you refering to Fidelity Advisory service fees or mutual fund expense ratios ? If you are using their Advisory service then that fee will be on top of any mutual fund expenses. Per the .87 (% I presume) fee that's fairly typical for a management fee. Depending on your stash size you may be able to find someone to manage it for less. However many firms charge more than that. For amounts over $2MM Vanguard only charges 0.2 % for their management fees. The management fee may be well worth it if it keeps you from doing foolish things with the portfolio though. 73ss454: With Fidelity I don't beleive any of their funds would have expenses approaching your 4% number. Where did that number come from ?

Yes. I believe it's a Fidelity Management fee. I am assigned an account advisor that calls me via phone, quarterly and includes an annual face to face meeting... I've been told that some places charge $800plus for these meetings... It's part of the package with Fidelity. Of course they are still going to get their money, aren't they? Thanks, SurfDog

[target2019]

Quote:

Originally Posted by SurfDog Hi guys... I had my 'one on one' today with Fidelity Investments regarding rolling over my retirement buy-out and 401k moneys. I was really impressed with how thorough they were with my income and expense planning but their fees are .87 of the sum in the account, quarterly (yikes)... Is that about the 'norm' for these investment firms? Apreciate your thoughts... Later, SurfDog (about to be spending as much time in the water as out of it...--Yippee--)

Normal is about 1-1.5%. That is yearly.

[Koolau]

Surfdog,

Remember how much you are paying me for advice and proceed accordingly, heh heh.

I think you need to ask "WHY" you need an advisor and "WHAT" you think their advice will buy you. If you struggle (as I do) with pulling the trigger on investment ideas (yours or someone else's) maybe it's worth the money to have an advisor to hold your hand. I've strongly considered it, but rejected it since every piece of "paid" advice I've ever received has been a loser in the long (and sometimes short) run.

If I WERE to offer advice (remember, free!) it would be to pick a "target" fund at Vanguard and then forget it. Relatively low fund fees, no advisory fees, it accomplishes the buying and selling to rebalance which most "experts" would suggest anyway. YOU are still responsible for your own results even if you pay for advice, so why not "pay yourself" the fee and just do something very basic but (generally) time tested - keep an asset allocation in balance with a single fund and don't worry too much about it.

My (unpaid) opinion is that fees rarely buy you much performance and you nearly always come out behind vs. a simple AA plan - either one you manage yourself or one you let them manage through a fund of funds (e.g., a Target fund). If you're really ambitious, pick out a total stock mkt. index fund and a total bond index fund, set your AA and then keep it in balance. If you want to get fancy, use separate US and OUS stock and bond funds instead of "total" funds.

Full disclosure - I've never taken my advice on any of this except now I don't pay an advisor. I'm slowly increasing my stock allocation in index funds and reducing my "cash" equivalents portion of my portfolio.

Remember YMMV and I'm no expert and I don't even follow my own advice, so...

[SurfDog]

Hi Koolau and thanks for yours (and the others) replies... Living where you do, I hope that you are into either surfing or windsurfing as I am here in Jax Florida... I have surfed (and windsurfed) Oahu (great place) as well as Kauai and Maui... I started surfing at 13 yrs old (am now 58 and a half) and then added windsurfing in the early 80's. Working for 'Ma Bell' almost 40 yrs has allowed me to do this and I am grateful for it. But it's time for me to spend more time 'in the water' while I'm still healthy enough to do it... Now i'm faced with one of the most important decisions of my life (what to do with this roll-over lump sum $$$) and I have absolutely no 'smarts' when it comes to investments. I did get into the company sponsored 401k (Fidelty) but not until the mid 90's... That is why I want to say a big "THANKS" to all who have posted to my 'shout out' ...
I'm going to call my Fidelty man and question why I should go with them vs going with someone who's fees are less (ie:Vanguard)... I have opened the roll-over IRA with Fidelity but NO funds have been transferred as of yet since my "official" retirement date is set for March 29th (last day on payroll)... So I'm guessing I still have options open (I hope)... Thanks again... SurfDog

Quote:

Originally Posted by Koolau Surfdog, Remember how much you are paying me for advice and proceed accordingly, heh heh. I think you need to ask "WHY" you need an advisor and "WHAT" you think their advice will buy you. If you struggle (as I do) with pulling the trigger on investment ideas (yours or someone else's) maybe it's worth the money to have an advisor to hold your hand. I've strongly considered it, but rejected it since every piece of "paid" advice I've ever received has been a loser in the long (and sometimes short) run. If I WERE to offer advice (remember, free!) it would be to pick a "target" fund at Vanguard and then forget it. Relatively low fund fees, no advisory fees, it accomplishes the buying and selling to rebalance which most "experts" would suggest anyway. YOU are still responsible for your own results even if you pay for advice, so why not "pay yourself" the fee and just do something very basic but (generally) time tested - keep an asset allocation in balance with a single fund and don't worry too much about it. My (unpaid) opinion is that fees rarely buy you much performance and you nearly always come out behind vs. a simple AA plan - either one you manage yourself or one you let them manage through a fund of funds (e.g., a Target fund). If you're really ambitious, pick out a total stock mkt. index fund and a total bond index fund, set your AA and then keep it in balance. If you want to get fancy, use separate US and OUS stock and bond funds instead of "total" funds. Full disclosure - I've never taken my advice on any of this except now I don't pay an advisor. I'm slowly increasing my stock allocation in index funds and reducing my "cash" equivalents portion of my portfolio. Remember YMMV and I'm no expert and I don't even follow my own advice, so...