Leaving Ameriprise - One Year Later

[JBmadera]

Thank you for posting, what an inspiring story. Congrats!!

 

[FinanceDude]

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........

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?

 

[MichaelB]

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.

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.

 

[samclem]

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 . . . ")

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]

 

[donheff]

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.

 

[FinanceDude]

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.......

 

[donheff]

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.

 

[FinanceDude]

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........

 

[Achiever51]

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.

 

[aida2003]

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.

 

[Lisa99]

+?? 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?

 

[travelover]

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.

 

[samclem]

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.

 

[Nords]

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.

 

[travelover]

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.

 

[67walkon]

Very cool! I met a guy this weekend who retired, starting riding a bike again and lost 60 or 70 pounds in 1.5 years.

If you guys really like cycling, check into some of the week long organized rides. BRAG (Georgia) is my favorite. Florida has one. Virginia, NC and Tennessee each have one. The granddaddy is RAGBRAI (Iowa). It is really fun to spend a week doing nothing but riding, eating and sleeping with a thousand or more like minded souls, moving from one small town to the next. My goal when I hit ER, or relatively so since I'm older than you, is to ride a couple of those a year. Unfortunately, my wife isn't into cycling, so I probably won't be doing a century in every state!

Good inspiration!

 

[Lisa99]

Very cool! I met a guy this weekend who retired, starting riding a bike again and lost 60 or 70 pounds in 1.5 years.

If you guys really like cycling, check into some of the week long organized rides. BRAG (Georgia) is my favorite. Florida has one. Virginia, NC and Tennessee each have one. The granddaddy is RAGBRAI (Iowa). It is really fun to spend a week doing nothing but riding, eating and sleeping with a thousand or more like minded souls, moving from one small town to the next. My goal when I hit ER, or relatively so since I'm older than you, is to ride a couple of those a year. Unfortunately, my wife isn't into cycling, so I probably won't be doing a century in every state!

Good inspiration!

I've never heard of week long rides but that sounds like a blast! I'm in the process of transitioning from spinning (just for exercise) to riding for real. There are lots of muscles I never knew I had after last weekend's ride....so it may be a bit before I'm ready for a full week.

 

[ERD50]

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.

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.

Well, A few people that I 'really care about' are looking to retire. I've heard some talk about their 'financial adviser said they could'. I'm concerned.

Last time we were together, the opportunity never presented itself for me to delicately approach this. Since then, I've been preparing my little talk.

So I practice in my head while doing the mindless task of cutting the lawn. I've got it down to 3 bite size chunks:

1) In one minute, based on the collective information of hundreds (thousands?) of successively retired people, I can tell you the basics of how to manage your retirement investments yourself. Give me another five if you want more detailed background info.

2) In one more minute, I can explain how much you can spend and provide a high confidence level that you will outlive your portfolio. Give me another five if you want more detailed background info.

3) In one more minute, I can explain why relying on an outside adviser is most likely the most dangerous approach you can take with your retirement portfolio. Give me another five if you want more detailed background info.

If they can't listen to the advice of successfully retired people (walking the walk) presented in three, one-minute chunks, there's no hope for them.

-ERD50

 

[clifp]

1) In one minute, based on the collective information of hundreds (thousands?) of successively retired people, I can tell you the basics of how to manage your retirement investments yourself. Give me another five if you want more detailed background info.

2) In one more minute, I can explain how much you can spend and provide a high confidence level that you will outlive your portfolio. Give me another five if you want more detailed background info.

3) In one more minute, I can explain why relying on an outside adviser is most likely the most dangerous approach you can take with your retirement portfolio. Give me another five if you want more detailed background info.

If they can't listen to the advice of successfully retired people (walking the walk) presented in three, one-minute chunks, there's no hope for them.

-ERD50

What a great approach. If I had to do it over again. I sure try this way with my friend, (I was partly successful with my sister.)

You know one of the things working against me was I wasn't "a professional". My friend's brother argued against me, (we met once decades ago) saying stay with Amerprise cause this guy that goes to Vegas all the time. I said no you should listen to me partly cause I have an MBA which more than your FA has. But mostly cause I've been retired for 10 years and have been investing for 30 years.

I think what this forum needs to give out certificates so we can have a fancy initials behind our name when we dispenses financial advice. (My apologizes to the folks with CFPs, CPAs, and CFAs). Something like a Certified Wise Money Guy/Gal, from the Early Retirement Institute.

 

[Sarah in SC]

I think what this forum needs to give out certificates so we can have a fancy initials behind our name when we dispenses financial advice. (My apologizes to the folks with CFPs, CPAs, and CFAs). Something like a Certified Wise Money Guy/Gal, from the Early Retirement Institute.

Don't worry Clif, I could probably give you a couple of fancy initials behind your name anytime... just guess which ones

 

[Nords]

I think what this forum needs to give out certificates so we can have a fancy initials behind our name when we dispenses financial advice. (My apologizes to the folks with CFPs, CPAs, and CFAs). Something like a Certified Wise Money Guy/Gal, from the Early Retirement Institute.

That'd get just about as much respect as signing my name with LCDR USN RET...

 

[REWahoo]

That'd get just about as much respect as signing my name with LCDR USN RET...

I'm opting for CAPT USAF RESIGNED

 

[Berkshire_Bull]

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.......

Everything I've seen from DFA Funds (both raw performance and risk-adjusted) is seriously badass. I would have no problem sending a friend or family member to their platform even for a marginal wrap fee.

I've met a couple guys who work for RIA's heavy into DFA, and I will say the guys seemed a little bit cultish but definitely smart guys. Probably no more cultish than the VG / Fido guys.

DFA's premise is their unwillingness to sell direct to avoid retail investors greed and panic hurting their performance. Great business model to turn down short term asset in-flows for long term performance and dedication of your investors. Very few fund families are doing that anymore.

And if people get mad about it, ask yourself this: Why would DFA sell their funds retail to a guy doing online trading sitting behind his computer munching cheetos who is consistently subject to greed and panic? Why would they allow diminishing returns for their largely accredited investor clientelle simply to serve retail investors who will jump on the next big thing?

Strategy seems to have worked out for them so far...

 

[DblDoc]

I considered using DFA, and some bogleheads use them and more would use them if they didn't require going through a DFA approved broker (and thus adding to costs). Their ER fees aren't bad at all. Alan Roth wrote an article about comparing Vanguard vs DFA and which was better. The bottom line was "it depends" and "who knows going forward" DFA vs. Vanguard - Which is better? - CBS MoneyWatch.com.

DD

 

[Berkshire_Bull]

I considered using DFA, and some bogleheads use them and more would use them if they didn't require going through a DFA approved broker (and thus adding to costs). Their ER fees aren't bad at all. Alan Roth wrote an article about comparing Vanguard vs DFA and which was better. The bottom line was "it depends" and "who knows going forward" DFA vs. Vanguard - Which is better? - CBS MoneyWatch.com.

DD

Vanguard and DFA aren't competitors. It's a completely different level. DFA wouldnt' want 95% of Vanguard's clientelle.