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Index funds (lazy portfolios) vs CFA's
Old 11-10-2013, 04:45 PM   #1
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Index funds (lazy portfolios) vs CFA's

Hi, I'm new to this forum.
I'm 77, have had a CFA for several years. I work part-time still (M.D.) have a nest egg of about 600,000 + house and other minor savings. Thus, this CFA takes 1% of my total and on top of that I pay 12b fees, and maybe others...
I hear that 80% of financial advisors don't beat the S&P 500 index. The question, again, is should I fire him, move all my money to an online discount broker like Scottrade or Schwab, etc. and buy low fees ETF's, index funds, etc.?
Thanks a lot!
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Old 11-10-2013, 04:54 PM   #2
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Originally Posted by alsante1 View Post
Hi, I'm new to this forum.
I'm 77, have had a CFA for several years. I work part-time still (M.D.) have a nest egg of about 600,000 + house and other minor savings. Thus, this CFA takes 1% of my total and on top of that I pay 12b fees, and maybe others...
I hear that 80% of financial advisors don't beat the S&P 500 index. The question, again, is should I fire him, move all my money to an online discount broker like Scottrade or Schwab, etc. and buy low fees ETF's, index funds, etc.?
Thanks a lot!
Welcome to a great forum. 'You know what you think you know'. You're helping finance the FAs life more than they are helping you.

There's a recommended book list here(among a bunch of other great resources). One of my favorite get started books is 'Millionaire Teacher'. Read and learn from others here.

Best wishes,
MRG
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Old 11-10-2013, 05:09 PM   #3
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Based on your OP, these two links might get you started DIY investing.

Bogleheads® investment philosophy - Bogleheads

Lazy portfolios - Bogleheads

Vanguard, Fidelity and Schwab seem to be popular with members here, many whose investing philosophy and asset allocations closely resemble the info in the links above.

If you want more detail (highly recommended), this http://www.bogleheads.org/readbooks.htm may be the reading list MRG was referring to.
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Old 11-10-2013, 05:15 PM   #4
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.......should I fire him, move all my money to an online discount broker like Scottrade or Schwab, etc. and buy low fees ETF's, index funds, etc.?......
Yes. And we can help you do it.
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Old 11-10-2013, 05:18 PM   #5
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Welcome, Alsante1. Glad to have you here.
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Old 11-10-2013, 09:27 PM   #6
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No brainer IMHO unless you like giving money away. Do a little analysis and see how your portfolio managed by your FA would have done against a Total Stock Market Index fund or even an S&P 500 Index Fund.
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Old 11-11-2013, 05:30 AM   #7
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Well, no: Comparing a reckless 100% equities fund against a responsible asset allocation is comparing apples to oranges. A proper comparison would be against the Three Fund Portfolio.
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Old 11-11-2013, 05:40 AM   #8
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There's a recommended book list here(among a bunch of other great resources). One of my favorite get started books is 'Millionaire Teacher'. Read and learn from others here.
+1 You beat me to it!

Ditching your CFA is one recommendation almost everyone gets that comes here. Does your advisor do anything for you except manage your portfolio of high fee funds and then taking 1% off the top? For most people the answer is no. If so, you can probably get a better return with low cost index funds.

I use Vanguard except for some residual 401k and SERP money that is in S&P500 Index funds. I have 40% in equities and 60% in a CD ladder. My equities are 60% Vanguard Total Stk Mkt and S&P500 Index, 10% Vanguard Small Cap, 20% Developed Mkt Index and 10% Vanguard Emerging Mkt Index. All are admiral shares. I rebalance once per year and it takes about 30 minutes.
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Old 11-11-2013, 07:13 AM   #9
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Quote:
Originally Posted by alsante1 View Post
Hi, I'm new to this forum.
I'm 77, have had a CFA for several years. I work part-time still (M.D.) have a nest egg of about 600,000 + house and other minor savings. Thus, this CFA takes 1% of my total and on top of that I pay 12b fees, and maybe others...
I hear that 80% of financial advisors don't beat the S&P 500 index. The question, again, is should I fire him, move all my money to an online discount broker like Scottrade or Schwab, etc. and buy low fees ETF's, index funds, etc.?
Thanks a lot!
Yes. I suggest Vanguard - good products at a good price and with your nestegg they would also provide you with a free financial plan if you want/need one.
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