Should we stay

[Whisper66]

NBS54 - Thanks for opening this discussion and providing the followup status posts. Even those of us that haven't contributed to this particular discussion gain knowledge and ideas from reading your thoughts and the advice provided by those in this forum. Good luck wherever you end up in this process.

BTW - I understand the feeling that one needs a FA. Thought when I retired that I would go that way to lower my risk and stress level. I really didn't like spending time on investing and worrying about it and thought a FA would "of course" do better than simple index investing that I would do. But, unfortunately the data doesn't support that as a general rule of thumb. If you have a FA that consistently beats the indexes, he is unusual. Like many here, I've gotten very comfortable taking a minimal amount of time and effort to manage my own investments and pocket the fees I would have paid a FA. This comfort mainly came from the excellent experience level found in this board and the excellent library that the Bogelheads web site has.

Again, wish you the best whatever you end up doing.

 

[chris2008]

Dear OP,
I understand that you feel too intimidated right now to make total changes and trust in those you talked to.
However, take this as a wake up call and start to educate yourself so that you can better understand the performance and recommendations of the FA. Ask regularly for performance reviews, compare to index so that you can see if you are getting enough for your fees.

 

[Taxman59]

I am a long term investor (35+years ) and I still have most of our money with a FA. We are charged the outrageous fee of $29.95 per trade and the asset fee of 0% per year. Not all advisors charge high fees, and not all push high fee products. I can manage our investments quite easily, but DW has no idea of what to do with the $. By using someone I trust, I am putting in place a process for her to make smart decisions in my absence. I applaud the OP for seeing the problem and looking for a better fit. If Vanguard or Fidelity work, great. If the new FA is the best fit, great. The OP now knows to watch their money with whomever they move to.

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[utrecht]

I am a long term investor (35+years ) and I still have most of our money with a FA. We are charged the outrageous fee of $29.95 per trade and the asset fee of 0% per year. Not all advisors charge high fees, and not all push high fee products. I can manage our investments quite easily, but DW has no idea of what to do with the $. By using someone I trust, I am putting in place a process for her to make smart decisions in my absence. I applaud the OP for seeing the problem and looking for a better fit. If Vanguard or Fidelity work, great. If the new FA is the best fit, great. The OP now knows to watch their money with whomever they move to.

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How do they get paid then? If an adviser "only" charges 1% (which is pretty outrageous compared to what you can do yourself), then to make $100,000 per year he has to have $10 million under his management. I doubt that every adviser has anywhere near $10 million under management so they have to charge even more thru commissions and fees collected by putting you in load mutual funds to make a good living.

You could easily set up a trust that allows you to manage your money on your own as long as you are alive but the money goes under professional management when you die so that your wife doesn't have to worry about it. But its your money so whatever.

 

[brett]

Apart from the cost/benefit issue would you still have the same degree of confidence and trust in your advisor? If the answer is NO, then you have to make a change.

We made a change prior to retirement. It was difficult and took a good nine-twelve months to find the right person/firm for us.

What surprised me? I asked a number of my colleagues and friends if they had an advisor, if so were they happy with the results, the advice, and the individual. I would say that the vast majority were not happy for one reason or another not necessarily based primarily on returns.

Fours years later we are happy with our choice and very happy with the outcomes.

 

[H2ODude]

It's frustrating to see intelligent folks who are not willing to learn the basics of investing that could produce superior results to the FA scenarios described in this and other threads. It seems to me some folks just lack the self confidence to commit to the idea that they are capable of beating the vast majority of FA arrangements with simple index and AA strategies. I'm not financially very sophisticated (certainly compared to many on this board) but have done very well primarily by a)using mainly index funds b)setting it and forgetting it. Well, I do check in about daily out of curiosity but rarely change anything.

Perhaps the most significant factor in my and other's success is to stay the course in turbulent times like 07-08. Maybe some folks NEED a FA to help them through such times, but paying 1% or more a year for that is a steep price.

DW and I each have Roth and tIRA's, plus the joint brokerage. All at Fido, and just looked at the performance as reported by Fido. While we've been with them for about 25 years, we reconfigured accounts so longest lived is my tIRA and the brokerage, these hold roughly 75% of our stuff. These two are 10 and 13 years old and F reports slightly over 10% for those periods. And that's 10% a year. I'll take it. Index funds mainly (over half has been in S&P 500 during that time). It's not that hard. Probably hardest is to just set it up and then grit your teeth during the drops. i will admit to using the Fido private client advice occasionally since retiring, mainly as it relates to where assets are divided between brokerage and IRA vehicles.

I post this not to demonstrate my prowess I do so to demonstrate that with no real financial education other than reading boards like this, a couple of books, and in the past magazines like Money and Kiplingers (gave those up years ago) it's pretty easy to beat most FA arrangements. The ability to grit your teeth in bad times is essential (with or w/o a FA).

I will add that I've gotten a kick out of knowing some folks in the past who seemed to enjoy discussing their "financial advisor." As in they were well off enough to need one! These were usually quite intelligent folks (well maybe not financially so) who just seemed to assume that if you had money you needed an advisor and talking about it was a demonstration of one's success!

Anyway, we're all different and I guess you have to follow your own path. It's just frustrating to see some insist on such expensive paths to follow!

 

[bingybear]

I tried looking up wealth enhancement group on the SEC site and got other investment companies that did not seem to match your description. Then I pulled one of the "advisers" from wealthenhancement.com and got a slightly different company name : WEALTH ENHANCEMENT BROKERAGE SERVICES, LLC.
Also the adviser I picked at random came up as
Investment Adviser Rep and Broker, not registered investment adviser.

could you go to IAPD - Investment Adviser Public Disclosure - Sitemap and look up your adviser on this site? See what it says (s)he is. Might be useful to know if this person is a RIA or broker rep.

 

[Sue J]

I said I would give an update from our fiasco. Today my husband and I talked with the Vice President of Compliance and Vice President of Sales from the Wealth Enhancement Group.

It was a good call. They admitted our advisor was wrong but he realizes it and is willing to take us back without converting our 401K to his account. This isn't going to happen but it felt good to know someone higher up in the company acknowledges his bad behavior. I think they knew how mad I was. My husband even told me I was talking in my "mad voice". He was calmer but he is also the one who says there is no way we would continue with the company. He says the advisor probably was saying what he wanted to but only changed his mind when others told him it wasn't a good idea.

This is going to amaze most of you but we have have an appointment to see another financial advisor tomorrow at the local bank which we use. I knew when I posted that this group as a whole doesn't like financial advisors. They have done very well for us. I can't give you detailed year by year returns but I can tell you we have received some great advise and we have made some great returns........

I'm just getting caught up on this topic. I'm glad you posted a followup and that you got a response from your advisors company.

All this is a learning process. You seem to be in the middle of it. You are not quite ready to do it all on your own but are seeing the pitfalls of handing it all over to another advisor. It does not have to be all or nothing. Just like you had your 401K outside the advisor and saw the results compared with the money he handled for you, you can take a portion of your money, invest it with Vanguard and learn about doing it on your own. When you get comfortable then decide what to do with the rest of it.

My investments are quite small compared with many of the more experienced folks here. I started with Vanguard in 2010, and it's just my part-time income in a Roth IRA. I enjoy going to the Vanguard site and learning about what's in the funds and playing with the comparison charts. I've already changed funds a few times just because I learned something knew.

I'd never let anyone else handle my money, especially if they charged a fee and tried to manipulate me. Treat me like I'm stupid and I'm done with you!

 

[MBAustin]

Have you (OP) considered using an FA that you can meet in person (which seems to be what you are looking for) for just part of your investments and managing the rest yourself at Vanguard or Fidelity? This is what we have done for the past 10 years. We have a local FA who did a financial plan for us (for a fee) and now manages a (small) fraction of our investments. We meet with him annually to discuss market trends, etc., and update him on what's going on with us. He knows that we have significant additional investments (since he did the plan originally) but has never pressured us to move more of our $$ to his management. Most of our investments are with VG so we have a Flagship advisor there to also call upon. We feel like this is a great arrangement for us, as I manage all of the investments so if something ever happens to me, he has someone he trusts to call on (FA has already agreed to help him out on an hourly fee basis if needed).

Just a thought...

 

[Texas Proud]

OH... just wanted to throw out that someone at worked used a FA from Fidelity.... they took into account her outside investments when advising her since there is no fee for AUM....

And, it is a person you can sit in front of it that is what you need...

 

[RonBoyd]

Again, let me plug the book, "DIY Financial Advisor," (in which I have no financial or any other similar interest, including any Amazon kickbacks) by quoting from this article:

The book closes by offering three reasons why people won't follow the book and do it themselves: fear of failure, inertia, and not wanting to give up an advisor who is a friend. It also offers three risks for the DIY investor - overconfidence, the desire to be a hero (seems to overlap with overconfidence), and that the theories may be insufficient for future market behavior.

This is where I have the greatest disagreement with the book. I interact with a lot of people. Most of them have no interest in learning the slightest bit about investing. Some have some inclination to learn about investing, but even the simple models of the book would make their heads spin, or they just wouldn't want to take the time to do it. Some of it is similar to seeing a YouTube video on draining and refilling your automatic transmission fluid. You might watch it, and say "I think I get it," but the costs of making a mistake are sufficiently severe that you might not want to do it without an expert by your side. Most will take it to the repair garage and pay up.

I put a knife to my own throat as I write this, as I am an investment advisor, but there is more specialized knowledge in the hands of an auto mechanic than in an investment advisor and the risk of loss is lower to manage your own money than to fix your own brakes. ...

The book isn't wrong. If you are willing to put in the time to follow the instructions of the authors, I think you will do better than most. My sense is that the grand majority of people are not willing to do that. They don't have the time or inclination.

...

This is not a book for beginners and you have to be comfortable with the small amount of math and the tables of financial statistics unless you are willing to trust them blindly. (Or trust me when I say that they are likely accurate.)

 

[UpAnchor]

NBS54 - You’ve received advice from multiple knowledgeable forum members whose only goal is to help you make the right decision. No investment firm in existence could or would offer free, non-self-serving advice by dozens of experienced investors, many of whom are already in retirement and others who are working toward that end. Further, you’ve done some prior reading on this forum and have invested on your own over the years. Yet you feel you are not quite ready to pull the trigger on DIY’ing your “life savings” in retirement. I believe you’ll end up doing just that eventually, but only you can decide when the time is right for you.

Thus, I like Sue J’s advice on taking parallel paths as you build your comfort:

All this is a learning process. You seem to be in the middle of it. You are not quite ready to do it all on your own but are seeing the pitfalls of handing it all over to another advisor. It does not have to be all or nothing. Just like you had your 401K outside the advisor and saw the results compared with the money he handled for you, you can take a portion of your money, invest it with Vanguard and learn about doing it on your own. When you get comfortable then decide what to do with the rest of it.

It took me being with more than one FA over too many years before I finally figured out that no one cared about my money as much as I did. (Call me a slow learner.) Even then I was nervous about taking the reins. The ease of DIY’ing my own investments (Vanguard and Fidelity) did not truly reveal itself until I’d made the switch and found myself doing just that. And then the profound simplicity was a real head-slapper.

So if you feel you need to go with another FA at your bank, then that’s what you need to do for now. But get something started with Vanguard or Fido on the side. And keep self-educating by continuing to digest the discussions on this forum as well as reading the various books discussed herein. (Millionaire Teacher, Four Pillars of Investing, Coffeehouse Investor, Random Walk, the Bogleheads Guide, and a number of others. Or for a quick easy read, any of Dan Solin’s books.) What you ultimately need to do will gradually reveal itself.

I wish you and your DH the best in your retirement!

 

[Markola]

I'm going to be a bit contrarian, even contrary to my comment above saying, like most everyone here, "Get your money to Vanguard - and do it yesterday". The OP gives the impression of complete unanimity with her DH, which might or might not be true. We do know that money is the cause of most marital strife in the world. Maybe the OP and her husband don't want to confront their own money differences so they prefer to pay an intermediary to facilitate their joint decision-making. If so, they are, in fact, exhibiting wisdom about negotiating and protecting their marriage, which is a different kind of financial wisdom than saving fees. The OP's comment that "We did pretty well" with their prior advisor might mean in actuality, "He kept us from fighting each other over money.". If this need for an in-person advisor that I propose is at all on track, then I recommend Schwab because they have offices all over the country where couples can visit an advisor assigned to them. I'd further recommend that one lay a groundwork with one's Schwab advisor on Day 1, which is "You can suggest any fund family you want to us as long as it is Vanguard" because Schwab will push their own mediocre, high fee and active mutual funds. We left Schwab for Vanguard ourselves once we accumulated enough for them to pay attention to us, which ended immediately when our new Schwab advisor insulted our dedication to Vanguard index funds. But I still think Schwab is a good company and better than most of the alternatives if one really wants in-person advice.


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[Markola]

And for gosh sakes, don't go with your bank.


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