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Old 08-08-2011, 10:01 PM   #21
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A wrap fee is annual, a sales load is not. My accusation of you lying is detracted as well. It is unlikely, but not impossible, that your broker could have sold you a sales load and then sometime thereafter moved you into a wrap account at 1.99% in which case you may re-apply the "thief" label as that would be appropriate
Thank you for the retraction...bottom line is we were paying a lot of money for the FA to underperform the market, so we chose to take our money and leave. The people here (and on Bogleheads) helped me develop a simple index-based portfolio that works for our needs for which I am grateful for their help and guidance.
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Old 08-08-2011, 10:08 PM   #22
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Thank you for the retraction...bottom line is we were paying a lot of money for the FA to underperform the market, so we chose to take our money and leave. The people here (and on Bogleheads) helped me develop a simple index-based portfolio that works for our needs for which I am grateful for their help and guidance.
I'm not paying a broker for my funds either, although I'm only indexing with about 10% and the other 90 is split evenly between actively managed T. Rowe and my Ameritrade / DRIPs with individual stocks. I'm a student of the profession and not affraid to commit the time and every day I learn something new.
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Old 08-08-2011, 10:40 PM   #23
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Wrap fees on mutual funds is so 1990's..........Ameriprise needs a new tactic........
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Old 08-08-2011, 11:24 PM   #24
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I'm not paying a broker for my funds either, although I'm only indexing with about 10% and the other 90 is split evenly between actively managed T. Rowe and my Ameritrade / DRIPs with individual stocks. I'm a student of the profession and not affraid to commit the time and every day I learn something new.

One of the reasons I'm gratified for Lisa escape from the evil clutches of Amerprise, is about the same time she joined the forum. I was in the process of trying to convince one of my best friends to leave Amerprise.

I looked at his statement and even met his adviser twice. It is truly remarkable the amount of money that Amerprise can suck out of their clients.

For instance, his adviser was selling him a variable annuity in their roll over IRA with heft surrender fee and high expense for the mutual funds.. For his taxable account, she had the money divided about among 1/2 dozen load mutual funds. The load was typical 5-6%.Each of the funds had 1-2% ER ratios. In addition Amerprise was charging a $250 quarterly fund administration fee, and all assets were charged a 1% wrap. Of course the good news is that Amerprise was NOT charging commission (at least none I could see) for the handful of individual stock in the account which is why his adviser recommended that he go with a wrap account.

All of you folks in the financial industry could learn a trick or two from Amerprise's fee structure. Amerprise is as greedy as Goldman Sachs.

Anyway I borrowed liberally from the info on Lisa thread to convince my friend to switch. Sadly, he didn't because his late wife had chose the adviser and he liked her.
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Old 08-09-2011, 06:48 AM   #25
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... For his taxable account, she had the money divided about among 1/2 dozen load mutual funds. The load was typical 5-6%.Each of the funds had 1-2% ER ratios...
...Sadly, he (leave) didn't because his late wife had chose the adviser and he liked her.
I switched to indexing after coming here. Before that DW and I used a FA who kept us in a bunch of load mutual funds. We didn't have wrap fees and other charges like the rip off I am reading about here but we did face large loads and high expense ratios. Once I took the time to focus and started listening to folks on this board, I realized I should handle things myself. Interestingly, the most difficult thing about leaving was that, similar to clifp's friend, DW and I liked our FA. While we learned that we could do better on our own, she did have us in a fairly balanced AA, she didn't churn, and she kept me from diving headlong into tech funds in 1999 (probably saving us a fortune). It was very difficult to tell her we were bailing on her since it was impossible to explain our leaving without essentially saying she was not serving our interests.

One of the most surprising things to me looking back is how many highly educated, successful people drift into investing through firms like ours that manage your money less effectively than you could do for yourself in something as simple as a lifestyle fund. We felt safe going with our FA because she was recommended by a friend who is a very bright lawyer at one of the top NY mega firms. Several of our friend's partners (in the $1M+/yr strata) used the same FA. We simply assumed that people that successful knew what they were doing. But you know what they say about assume.
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Old 08-09-2011, 07:35 AM   #26
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Thank you for posting, what an inspiring story. Congrats!!
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Old 08-09-2011, 08:23 AM   #27
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While we learned that we could do better on our own, she did have us in a fairly balanced AA, she didn't churn, and she kept me from diving headlong into tech funds in 1999 (probably saving us a fortune). It was very difficult to tell her we were bailing on her since it was impossible to explain our leaving without essentially saying she was not serving our interests.
So, she saved you a fortune by keeping you from doing stupid investing, and you rewarded her by leaving? Uh, ok........

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We simply assumed that people that successful knew what they were doing. But you know what they say about assume.
How did your FA not know what she was doing?
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Old 08-09-2011, 08:45 AM   #28
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So, she saved you a fortune by keeping you from doing stupid investing, and you rewarded her by leaving? Uh, ok........
My take was that she saved him some money but still had him in expensive investments. A better advisor would have saved more.

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How did your FA not know what she was doing?
I understood the FA knew what she was doing (charging high fees) but the friends that recommended her did not.
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Old 08-09-2011, 08:49 AM   #29
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So, she saved you a fortune by keeping you from doing stupid investing, and you rewarded her by leaving? Uh, ok........
Here's my advice: Don't drink Drano and don't jump in front of the subway. Please send me $50. And keep sending me the money every year (otherwise, I guess you'll be an ingrate and worthy of an "uh, ok . . . ")
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How did your FA not know what she was doing?
Please reread the post. Donheff said his friends didn't know what they were doing [implied: by wasting their money through an expensive management structure rather than finding a lower-cost one--or doing it themselves]
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Old 08-09-2011, 09:19 AM   #30
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So, she saved you a fortune by keeping you from doing stupid investing, and you rewarded her by leaving? Uh, ok........



How did your FA not know what she was doing?
Both questions were answered by others but I will add my ditto. Since I had no idea what I was doing, my FA did save me a good deal of money by steering me toward a diversified portfolio keeping me from jumping heavily onto the tech bandwagon. And she didn't abuse me in the manner described for Ameriprise. Nevertheless, once I learned just a little about investing I realized she had me in too many funds with redundant assets. She periodically switched to new funds for incoming $ which insured a steady flow of commissions and loads, and they all carried substantial expenses for that helpful management they exercised. My conclusion was that I could do better in a diversified set of index funds, i.e., she was not (or at least no longer) serving my interests. I like her and didn't feel she was abusing me so I felt bad when I left since the implicit message was clearly that I had concluded that a financial ignoramus (me) could do better than her after a few months of reading. Sadly, I believe that conclusion was accurate.

Ditto to the comments on the other question. I was surprised that successful law partners making mega bucks were as ignorant of personal finance as I was, i.e. "didn't know what they were doing.".

As to FAs, I am not opposed to using them. I would recommend that people who feel they need one select a fee only adviser and focus on passive funds, something like DFA. When I started moving out on my own, I researched and selected a local fee only FA to evaluate my investment plan since I was still worried that maybe in my newbie enthusiasm I was missing something important. The FA found my plan, funds and AA to be solid but still thought I would be better served with some managed funds under her 1%/year tutelage. Of course, like me, anyone who gets that far will quickly realize they can skip the FA and do it themselves earning an extra 1%/yr out of the gates. But don't worry Dude, there are a lot of people like DW and I were to keep you gainfully employed for the long term. And I will even guess, based on your long term participation here, that you steer them as best you can without churning or reaching for commissions. On the other hand, to the extent that you educate them about what you are recommending, don't be surprised to periodically loose a few who realize they can DIY.
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Old 08-09-2011, 09:37 AM   #31
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As to FAs, I am not opposed to using them. I would recommend that people who feel they need one select a fee only adviser and focus on passive funds, something like DFA.
Frankly, most folks on here wouldn't pay for an advisor that offers DFA. I have a relationship with a DFA advisor and refer business to him, but I share in a percentage of the management fee......

I do recall an impassioned post or two from nun that was chastising DFA for not selling to the VG/Fido crowd, but they have no plans to do it in the foreseeable future, and their growth in assets seems to speak that their business model is working, since they manage $160 billion or so.......
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Old 08-09-2011, 10:02 AM   #32
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Frankly, most folks on here wouldn't pay for an advisor that offers DFA. I have a relationship with a DFA advisor and refer business to him, but I share in a percentage of the management fee......
And I would agree with them that there is no need to spend your money with DFA - DIY instead. But I think you are better with them than with someone picking and choosing managed funds. We will never know for sure.
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Old 08-09-2011, 10:03 AM   #33
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And I would agree with them that there is no need to spend your money with DFA - DIY instead. But I think you are better with them than with someone picking and choosing managed funds. We will never know for sure.
Well, you could always buy ETFs in an Ameritrade account and keep expenses low too........
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Old 08-09-2011, 10:19 AM   #34
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Ditto to the comments on the other question. I was surprised that successful law partners making mega bucks were as ignorant of personal finance as I was, i.e. "didn't know what they were doing.".

I know a hugely successful attorney who is married to another high powered attorney. They have no children. I attended a workshop with him recently where the speaker was discussing using estate planning to benefit charities. I nearly fell off my chair when my attorney friend leaned over and admitted that neither he nor his wife had a will, much less any estate plan in place! unbelievable.
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Old 08-09-2011, 12:53 PM   #35
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One year already? I remember your first post like it was yesterday!

Congratulations on all your successes.
+?? I too remember your first post and it's unbelievable it was already 1 year ago. I'd love to read more such 'turn-around' stories either financial or personal especially when knowledgeable people spend time advising for FREE.
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Old 08-09-2011, 12:57 PM   #36
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+?? I too remember your first post and it's unbelievable it was already 1 year ago. I'd love to read more such 'turn-around' stories either financial or personal especially when knowledgeable people spend time advising for FREE.
It makes you wonder how many people who ask for help/advice actually do anything with the information and advice they've been given....maybe we need a poll?
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Old 08-09-2011, 01:25 PM   #37
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I've sure had lousy luck, even when advice was sought. Someone made the decision to go with the current FA, and I've found that this person shoots the messenger.
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Old 08-09-2011, 01:31 PM   #38
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I've sure had lousy luck, even when advice was sought. Someone made the decision to go with the current FA, and I've found that this person shoots the messenger.
Even when you can make a good case (with real numbers, etc)?
That's a tough situation. If you get only a grudging OK for a DIY approach and there's any adverse result (whether or not the FA would have prevented it) you can be in a bad spot.
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Old 08-09-2011, 01:51 PM   #39
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Sadly, he didn't because his late wife had chose the adviser and he liked her.
I know a couple who are still with Edward Jones because that's where Grandpa bought his stocks. The account has been through probate not once but twice, and that's where it still is today.
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Old 08-09-2011, 02:13 PM   #40
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Even when you can make a good case (with real numbers, etc)?
That's a tough situation. If you get only a grudging OK for a DIY approach and there's any adverse result (whether or not the FA would have prevented it) you can be in a bad spot.
Right. There seems to be no real upside, unless it is someone that you really care about.

Some time ago I posted about nephew paying over 3 percent ER in a 403(b) - still there as far as I know.
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