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Old 10-13-2011, 12:45 PM   #61
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It has become clear to me that you assume that the 5% wrap fee is an annual fee. It isn't, it is a one-time fee.
Lisa, I realize this reply is to an old post that has gone kinda cold, but it is important to point out that most wrap accounts charge a percentage of AUM (assets under management) per year (usually paid quarterly). If you paid a one-time fee of 5% that is likely not a wrap fee or a wrap account -- it sounds more like a front-end loaded retail share.

I have seen wrap fees as high as 3% (but not in this century) . . . and most are much much lower these days. 1% seems fairly common, but I don't pay anything remotely close to that.

Would you mind telling us what funds you were in? Then it might be pretty easy to determine if you were in a wrap account or in front-loaded funds (or something else).

Generally, wrap accounts give you access to institutional share classes that have no loads and lower ER's than retail shares of the same funds (retail being A, B, and C shares).

No, I am not telling everybody they should dump their Vanguard funds and open a wrap account. Do whatever you want.

One of the purposes of this forum is education, and there seems to be some misunderstanding, at least with some members, about what a wrap account is and what it isn't.
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Old 10-13-2011, 01:22 PM   #62
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. . .
Aug 2011 - We’re now in a total of five funds across the entire portfolio (qualified and non-qualified), all of which are Index funds. Average expense ratio is 0.09% which is a fraction of last year! Our AA is 60/40 with equities being 35% large cap, 15% small cap and 10% Intl. The bond portion is in a single Fido Total Bond Market Index which is held in my 401K. We also cashed out all of DH’s options and ESPP from CSCO and put them into Vanguard. We made this move because of the ongoing underperformance of the stock.
I am not picking, honestly, but I have another question.

You state that your average expense ratio is 0.09%, your AA is 60/40, and the bond portion is "Fido Total Bond Market Index".

According to Fidelity's FTBFX prospectus, this fund has an expense ratio of 0.45%.

If 40% of your portfolio has an ER of 0.45%, what is the other 60% invested in that brings the average portfolio ER to 0.09%?

Congratulations on the positive things happening in your life. Keep it up.
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Old 10-13-2011, 01:40 PM   #63
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I am not picking, honestly, but I have another question.

You state that your average expense ratio is 0.09%, your AA is 60/40, and the bond portion is "Fido Total Bond Market Index".

According to Fidelity's FTBFX prospectus, this fund has an expense ratio of 0.45%.

If 40% of your portfolio has an ER of 0.45%, what is the other 60% invested in that brings the average portfolio ER to 0.09%?

Congratulations on the positive things happening in your life. Keep it up.
The bond fund is in my 401k and is an institutional fund that mirrors Vanguard's Total Bond Market Fund. The expense ratio of the fund is .04%. I also have a US Small/Mid-Cap Index fund in the same 401k with an expense ratio of .03%. So you can see that the ERs are MUCH lower than what one can generally get directly from Vanguard or Fidelity.

Our funds with Vanguard are all in Admiral funds so the ERs are also lower than what can be found in the standard index funds.
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Old 10-13-2011, 01:44 PM   #64
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Lisa, I realize this reply is to an old post that has gone kinda cold, but it is important to point out that most wrap accounts charge a percentage of AUM (assets under management) per year (usually paid quarterly). If you paid a one-time fee of 5% that is likely not a wrap fee or a wrap account -- it sounds more like a front-end loaded retail share.

I have seen wrap fees as high as 3% (but not in this century) . . . and most are much much lower these days. 1% seems fairly common, but I don't pay anything remotely close to that.

Would you mind telling us what funds you were in? Then it might be pretty easy to determine if you were in a wrap account or in front-loaded funds (or something else).

Generally, wrap accounts give you access to institutional share classes that have no loads and lower ER's than retail shares of the same funds (retail being A, B, and C shares).

No, I am not telling everybody they should dump their Vanguard funds and open a wrap account. Do whatever you want.

One of the purposes of this forum is education, and there seems to be some misunderstanding, at least with some members, about what a wrap account is and what it isn't.
Thanks for reading Rustward. There was an exhaustive discussion of wrap fees by another poster earlier in this thread. We had >15 funds with Ameriprise and I'd have to dig out long filed documents to figure out which funds they were...so I'll pass.

Bottom line is that even without the wrap fees and the $750/year in advisor fees, we are saving a bundle of money by managing our own investments due to the significant reduction in ERs.
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Old 10-14-2011, 01:34 PM   #65
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Thanks for reading Rustward. There was an exhaustive discussion of wrap fees by another poster earlier in this thread. We had >15 funds with Ameriprise and I'd have to dig out long filed documents to figure out which funds they were...so I'll pass.

Bottom line is that even without the wrap fees and the $750/year in advisor fees, we are saving a bundle of money by managing our own investments due to the significant reduction in ERs.
OK Fine.

For somebody who uses Quicken for EVERYTHING
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... I use Quicken for EVERYTHING ...
it is difficult to understand how you can't tell what you were invested in just a little over a year ago. There might even be tracks in the 1040 you may have filed earlier this year. I respect your right not to answer a question, but next time it might be better to just say that for undisclosed reasons you prefer not to answer.

Anyway, the account you described in the post opening this thread is absolutely not a wrap account. If you were told it is a wrap account you were misinformed. There is no crime in being misinformed, but to knowingly misinform others is, uh, wrong.

Here is investopedia's definition of a wrap account: Wrap Account Definition

"
What Does Wrap Account Mean?
An account in which a brokerage manages an investor's portfolio for a flat quarterly or annual fee. This fee covers all administrative, commission, and management expenses. Sometimes this also includes funds of funds.

Investopedia explains Wrap Account
The advantage of a wrap is that it protects you from overtrading. This is when your broker trades your account excessively to make more commission. Furthermore, because the broker gets a flat annual fee, then he or she only trades when it is advantageous to you. A traditional wrap typically requires an initial investment of at least $50,000 to $100,000.
"

No, you did not have a wrap account.
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Old 10-14-2011, 02:49 PM   #66
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I use Quicken for all banking and have for years, but investing while with Ameriprise was hard copy. It has now been changed to Quicken.

Not sure why you're being so antagonistic about this, but this will be my last post/reply to your comments.
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Old 10-14-2011, 03:10 PM   #67
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I use Quicken for all banking and have for years, but investing while with Ameriprise was hard copy. It has now been changed to Quicken.

Not sure why you're being so antagonistic about this, but this will be my last post/reply to your comments.
Maybe married to an Ameriprise advisor?
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Old 10-14-2011, 03:26 PM   #68
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Maybe married to an Ameriprise advisor?
that or one of them himself?
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Old 10-16-2011, 07:24 PM   #69
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Lisa you have done your homework and there is no reason to revisit this except to collect our praise for your efforts to take control of your finances.
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Old 10-17-2011, 10:20 AM   #70
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Thanks Sarah!
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