Rick_Head
Recycles dryer sheets
I beg to disagree. It is amazingly easy if you have some knowledge and tools.
Should we stay
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+1
Someone who wants to raise their own fees by 40% might also say you agreed to buy some high commissioned thing. At a minimum, I'd find the voice recorder on my phone, call him on speaker, and politely confirm that no transactions are to be done without your approval.
I live in the Twin Cities and my DW and I moved our money to Wealth Enhancement on retirement. From 2009 through 2013 I earned less than a 3% return while the market was doing great. I moved to Fidelity in 2014 and am managing myself. The FA put roughly 20% of our funds in non-trade REITS. I think this was to keep us as clients. As far as ss he advised me to take my money early. He said "I would rather you take the government money rather than your own". Totally self-serving. Take ss so you don't take from your IRA. He also always pushed annuities and life insurance. When the markets tanked in 2008 he said annuities would help us to protect our assets. Every annual review was a churning session - we don't use them anymore, we want to move you to xxxx. Having first hand knowledge of that company I would run away as soon as possible.
ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
These sorts of stories pop here from time to time. What I always find the most interesting is - how do these posters determine they have 'done well' (relative to what? relative to a simple 2-3 fund portfolio?), and why are they happy with the 'advisor', or feel that the advisor has been helpful?
When pressed, the poster typically can't back these statements up objectively, it was just a feeling. It really takes a little DIY knowledge to have a frame of reference for what 'doing well' is, or to know if some one was really helpful, or just going through the motions. And if you know enough to judge that, you know enough to just DIY. It doesn't take much at all.
You'll see
-ERD50
Markola
Thinks s/he gets paid by the post
+1 what Chemist said. You might like the advisor you have as a person but you are unknowingly and unnecessarily driving down the highway shoveling your money out the window in detrimental fees. Now they are even pressuring you. I would only add that Vanguard might even help you with the transfer process, saving you much of the hassle and confrontation with your current firm. I have about the same as you but have left two advisors in my 20 years of investing. The first was Waddell and Reed when I was a true know nothing sucker who wised up after educating myself, and the second Charles Schwab, which was very good to work with for the most part but their advisor rep finally insulted my indexing proclivities and was also just not Vanguard. I am glad I moved in both cases when things no longer smelled right. if it smells like a skunk... Good luck.
RonBoyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Exactly! See my earlier post:
http://www.early-retirement.org/forums/f26/should-we-stay-78933-2.html#post1640752
Depends on your definition of "some knowledge". It doesn't take much time, effort or skill to look around and see that a portfolio of 1/2 Vanguard Sp500 fund and 1/2 Vanguard Total Bond fund will beat just about any adviser's 50/50 portfolio.
I think you're splitting hairs. The point is that you dont have to read a book, study for months or anything like that. Anyone smart enough to amass a million dollar portfolio can manage his/her own portfolio with very little effort.
ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
RonBoyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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.
My husband made a good salary throughout his career but certainly nothing spectacular. I was a SAH mom for many years and worked part time and then full time for about 15 years. I made an average salary. Yet we were still able to accumulate a nice retirement portfolio. We also paid for our three children's four year college tuition. They all graduated with their undergraduate degrees with no student loans. We have given generously to our church and other charities. We live in a lovely home that we had designed and built just for us. I've traveled more than I could have imagined when young. We gave our daughter a big fat mid-western wedding. I'll have to admit that was like driving down the road throwing money out the window but she's still married and we have two grandchildren so we can't complain.
What I'm saying is we could never have accomplished these things without saving and investing and the help we've gotten along the way has made a big difference. I started on my own by joining an investment club and buying DRIP stocks in my 20s. When IRAs started I started buying them on my own.
We began to have enough money that we thought we would like more advice and were clients of Edward Jones for about 25 years. They suggested stocks that made us a whole lot of money. We bought AOL at our broker's suggestion and in the two years we held it we made more money on that than I did at work. And he told us when it was time to sell.
We decided to move to a financial advisor because I had IRAs everywhere. I bought something new every year for years and years. As we got older we thought we needed someone to put everything in one place and we knew we were getting to the point where we needed some more conservative investments. So we ended up with advisor we have now and I can honestly say he gave us some great advice until he got greedy. We were going to take SS when my husband retired but he showed us the advantage of filing and suspending and for him to wait until 70 to receive benefits. Of course he could die early and it won't be that great of a plan but that's a risk we're willing to take as he's in excellent health.
We're also looking into Vangaurd and I will talk to someone there too before we make a final decision of what we're going to do. I feel so much better after talking to someone from the company. We made it clear we wanted no more trading done without our explicit consent and they assured me if we leave the process will go smoothly. We will continue to receive our monthly check until our account is closed. At this point I just want to make the best decision for us and what will make us feel the most comfortable. Everyone has different things they are willing to spend money on. I have friends who spend $1,000 a year in donations to the athletic department at our local university to get good parking places for games and that is small potatoes compared to what they spend on season tickets and traveling to out of town games. I don't think they are stupid, I just think they're spending money on something that's important to them.
I didn't mean to write a novel but I do thank you all for your responses and let you know we did get some results and I feel better. I wish it wouldn't have happened but we'll go on and hopefully make a good decision for us. Remember, what's good for you may not be what's good for us. Thanks again.
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.
My husband made a good salary throughout his career but certainly nothing spectacular. I was a SAH mom for many years and worked part time and then full time for about 15 years. I made an average salary. Yet we were still able to accumulate a nice retirement portfolio. We also paid for our three children's four year college tuition. They all graduated with their undergraduate degrees with no student loans. We have given generously to our church and other charities. We live in a lovely home that we had designed and built just for us. I've traveled more than I could have imagined when young. We gave our daughter a big fat mid-western wedding. I'll have to admit that was like driving down the road throwing money out the window but she's still married and we have two grandchildren so we can't complain.
What I'm saying is we could never have accomplished these things without saving and investing and the help we've gotten along the way has made a big difference. I started on my own by joining an investment club and buying DRIP stocks in my 20s. When IRAs started I started buying them on my own.
We began to have enough money that we thought we would like more advice and were clients of Edward Jones for about 25 years. They suggested stocks that made us a whole lot of money. We bought AOL at our broker's suggestion and in the two years we held it we made more money on that than I did at work. And he told us when it was time to sell.
We decided to move to a financial advisor because I had IRAs everywhere. I bought something new every year for years and years. As we got older we thought we needed someone to put everything in one place and we knew we were getting to the point where we needed some more conservative investments. So we ended up with advisor we have now and I can honestly say he gave us some great advice until he got greedy. We were going to take SS when my husband retired but he showed us the advantage of filing and suspending and for him to wait until 70 to receive benefits. Of course he could die early and it won't be that great of a plan but that's a risk we're willing to take as he's in excellent health.
We're also looking into Vangaurd and I will talk to someone there too before we make a final decision of what we're going to do. I feel so much better after talking to someone from the company. We made it clear we wanted no more trading done without our explicit consent and they assured me if we leave the process will go smoothly. We will continue to receive our monthly check until our account is closed. At this point I just want to make the best decision for us and what will make us feel the most comfortable. Everyone has different things they are willing to spend money on. I have friends who spend $1,000 a year in donations to the athletic department at our local university to get good parking places for games and that is small potatoes compared to what they spend on season tickets and traveling to out of town games. I don't think they are stupid, I just think they're spending money on something that's important to them.
I didn't mean to write a novel but I do thank you all for your responses and let you know we did get some results and I feel better. I wish it wouldn't have happened but we'll go on and hopefully make a good decision for us. Remember, what's good for you may not be what's good for us. Thanks again.
Rick_Head
Recycles dryer sheets
If you are old enough:
"There are 8 million stories in the Naked City, this has been one of them".
"There are 8 million stories in the Naked City, this has been one of them".
Texas Proud
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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If you wish to spend money on a FA, go right ahead....
I do not think that most people here are against anybody who thinks they need one from getting one... it is just that the average FA is really not that great and the cost can be very high...
For most places, the first thing a FA is is a salesman... like any salesman they are told what to push and what to keep from the client unless asked specifically....
I look at the cost of a FA.... if you have $1 mill and the total fees are 1.5% (not uncommon), that is $15,000 per year to them.... if you can get that down to .5% or even .2% that drops it to $5,000 or even $2,000....
So, say it is $10K per year... I calculate that is $150,000 extra fee paid to that FA over only 12 years with a 4% return.... with a higher return it is even worse... (just shy of $300K at 20 years)....
If you believe that spending that kind of money is worth it, then spend it... but be cognizant of the real cost of that FA... do not just gloss over it....
PS... if you have more in assets... that fee goes up.....
I do not think that most people here are against anybody who thinks they need one from getting one... it is just that the average FA is really not that great and the cost can be very high...
For most places, the first thing a FA is is a salesman... like any salesman they are told what to push and what to keep from the client unless asked specifically....
I look at the cost of a FA.... if you have $1 mill and the total fees are 1.5% (not uncommon), that is $15,000 per year to them.... if you can get that down to .5% or even .2% that drops it to $5,000 or even $2,000....
So, say it is $10K per year... I calculate that is $150,000 extra fee paid to that FA over only 12 years with a 4% return.... with a higher return it is even worse... (just shy of $300K at 20 years)....
If you believe that spending that kind of money is worth it, then spend it... but be cognizant of the real cost of that FA... do not just gloss over it....
PS... if you have more in assets... that fee goes up.....
travelover
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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To the OP, glad you are happy. I'll gladly spend the hour a year it takes me to re-balance for the $20,000 it saves me. And I'll buy my own birthday card.
Its hard for me to believe that an obviously intelligent person who can put together such a well thought out post, still would rather spend $10,000s rather than take the hour or two it takes to research what funds to invest their money into and then move their money to a low cost broker like Vanguard or Fidelity.
With the size of OP's portfolio, Vanguard will tell her what to invest her money into for free. There are plenty of people here who gladly give FREE advice on where to invest her money. They have been investing for decades (probably longer than her new advisor). They have also been living successfully off of their portfolios for many years (something very few financial advisors can say).
I just dont get it. I guess because OP doesnt see the fees and lost money due to high expense ratios coming out of her portfolio, she doesnt notice it? I bet if she had to write a check every quarter for the fees, it would come to a screeching halt.
With the size of OP's portfolio, Vanguard will tell her what to invest her money into for free. There are plenty of people here who gladly give FREE advice on where to invest her money. They have been investing for decades (probably longer than her new advisor). They have also been living successfully off of their portfolios for many years (something very few financial advisors can say).
I just dont get it. I guess because OP doesnt see the fees and lost money due to high expense ratios coming out of her portfolio, she doesnt notice it? I bet if she had to write a check every quarter for the fees, it would come to a screeching halt.
nun
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This is a frustrating thread.
To the OP. Just call Vanguard and they will hold your hand through the whole process of moving the money from your current company. Vanguard will then go over your situation and come up with a sensible low cost way to manage your money for income. Also, as you've found, there are plenty of people here that will offer advice too.
To the OP. Just call Vanguard and they will hold your hand through the whole process of moving the money from your current company. Vanguard will then go over your situation and come up with a sensible low cost way to manage your money for income. Also, as you've found, there are plenty of people here that will offer advice too.
Glad you are free of the first FA's clutches.
Do talk to Vanguard for comparison.
Some questions for potential FA's.
- How often do you make trades?
- Do you take tax considerations into account when making trades. (Trades in IRAs don't hurt you tax wise... churning in taxable accounts can have big negative tax consequences.)
- What is the fee structure? Is it based on Assets under Management (AUM)?
- Do the funds have loads? Is there a surrender fee?
- How do the funds compare against index benchmarks. (Look at 1yr, 5yr, 10yr.)
Vanguard will come up with a plan for you for free with an account value of your size. Schwab will also do this. As will Fidelity.
I use Schwab - they offer a FA for free that you can tap with questions, etc... I used her services for verifying my ER plans. My sister uses her for more guidance on investments. She charges the same (nothing) for both of us.
Do talk to Vanguard for comparison.
Some questions for potential FA's.
- How often do you make trades?
- Do you take tax considerations into account when making trades. (Trades in IRAs don't hurt you tax wise... churning in taxable accounts can have big negative tax consequences.)
- What is the fee structure? Is it based on Assets under Management (AUM)?
- Do the funds have loads? Is there a surrender fee?
- How do the funds compare against index benchmarks. (Look at 1yr, 5yr, 10yr.)
Vanguard will come up with a plan for you for free with an account value of your size. Schwab will also do this. As will Fidelity.
I use Schwab - they offer a FA for free that you can tap with questions, etc... I used her services for verifying my ER plans. My sister uses her for more guidance on investments. She charges the same (nothing) for both of us.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This section of your post caught my eye. If you don't have detailed year by year returns then how do you know that you have made "great" returns?
Returns are relative... the only way you can assess whether they are "great" or not is by comparing them to relevant benchmark returns for a similar AA portfolio... preferable total return for 1, 3, 5 and 10 year periods. You may have a period where your total return was 12% and think that is "great" but if the benchmark total return was 14% then 12% is not great at all.
Like others, I think you are best off going with Vanguard... they will hold your hand and with very little study you will have more understanding of your investments and importantly, save a lot of money that would otherwise be paid directly or indirectly (via high ERs part of which is paid to your FA).
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This thread reminds me of something that frustrates me to no end in life. People asking for advice and then doing whatever they want anyway. They really don't want advice, they want you to validate the decision they have already made.
As a veteran police detective this happened to me all the time. Younger officers would call and ask what to do with their case. I would tell them and then they would do something almost exactly opposite. They really didnt want my advice. They wanted to take a short cut or the easy way out and wanted me to tell them it was OK.
Family members constantly ask me for financial advice or advice on how to budget their money. I have begun refusing to give advice because not once has anyone done what I advised them to do. They really just want to know how to get rich quick.
My wife's parents have all of their non 401k money with Ameriprise. They are like 73 and 60 and still working. They asked me for advice at least 5 different times. I gave them my advice each time and even assisted them with moving their money to Vanguard when they finally decided to make the move. I opened the account online with them. I helped them transfer some of the money that was in fixed income but didnt need to be. They are VERY uneducated when it comes to finances.
A month later I found out they moved the money back to Ameriprise. No doubt after their "adviser" told them they were wrong. Hes not an adviser. These arent "advisers". They are salesmen.
As a veteran police detective this happened to me all the time. Younger officers would call and ask what to do with their case. I would tell them and then they would do something almost exactly opposite. They really didnt want my advice. They wanted to take a short cut or the easy way out and wanted me to tell them it was OK.
Family members constantly ask me for financial advice or advice on how to budget their money. I have begun refusing to give advice because not once has anyone done what I advised them to do. They really just want to know how to get rich quick.
My wife's parents have all of their non 401k money with Ameriprise. They are like 73 and 60 and still working. They asked me for advice at least 5 different times. I gave them my advice each time and even assisted them with moving their money to Vanguard when they finally decided to make the move. I opened the account online with them. I helped them transfer some of the money that was in fixed income but didnt need to be. They are VERY uneducated when it comes to finances.
A month later I found out they moved the money back to Ameriprise. No doubt after their "adviser" told them they were wrong. Hes not an adviser. These arent "advisers". They are salesmen.
robertf57
Recycles dryer sheets
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OP
On a lark this year, I took and easily passed the series 65 FINRA examination (the test for registered investment advisors and their representatives). I can therefore tell you from personal experience that the bar to become a FA is incredibly low. I have no problem with people seeking advice when needed or desired. If you need a little hand holding, work with Vanguard. If you need more hand holding, see a fee only financial planner once a year.
just my not so humble opinion..
On a lark this year, I took and easily passed the series 65 FINRA examination (the test for registered investment advisors and their representatives). I can therefore tell you from personal experience that the bar to become a FA is incredibly low. I have no problem with people seeking advice when needed or desired. If you need a little hand holding, work with Vanguard. If you need more hand holding, see a fee only financial planner once a year.
just my not so humble opinion..
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
^^^^ good advice
MRG
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Great point, Megacorp used to have over a thousand folks with series 6,7,65 licences. These were folks who had a high school education and spoke well, oh yea no felons! Kid that worked for me came up through that career path, said after prep the test wasn't too difficult and he(self admitted) was clueless about investing.
Reading some Jones training documents it appeared to me these folks:
1. Took a few weeks self training to pass the exam.
2. Then 16-20 week training courses on manipulation er.. sales.
So based on the kid that worked for me I suppose the manipulation training gets you investment savvy.
ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Texas Proud
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Yes, the FA that are at banks etc. are there to sell products of the banks...
FA of Ameriprise are there to sell products of Ameriprise.....
Heck, even FA of Vanguard are there to sell products of Vanguard...
Some know what they are doing.... most do not...
The questions I would ask a FA is why are they putting me in any investment.... IOW, what does this investment have that another does not... OH, and how much is this costing me...
As I mentioned, I know someone who says they are an 'independent' FA and from the info I get he nets close to $100K... but he is so in debt it is not funny... he is slick... he is personable.... he can sell you life insurance and annuity products and make them seem like you would be a fool to not have them...
If I were the OP, and I did not know as much as I do.... I would listen to the advice to use one of the major firms that provides free FA advice to a portfolio of 'my' size.... Vanguard, Fidelity, etc... I would also make sure that I knew the total fee structure of the whole portfolio... IOW, I want to know how much of my money was being spent on the workings of the firm.... if they cannot give me that info, I would move on....
FA of Ameriprise are there to sell products of Ameriprise.....
Heck, even FA of Vanguard are there to sell products of Vanguard...
Some know what they are doing.... most do not...
The questions I would ask a FA is why are they putting me in any investment.... IOW, what does this investment have that another does not... OH, and how much is this costing me...
As I mentioned, I know someone who says they are an 'independent' FA and from the info I get he nets close to $100K... but he is so in debt it is not funny... he is slick... he is personable.... he can sell you life insurance and annuity products and make them seem like you would be a fool to not have them...
If I were the OP, and I did not know as much as I do.... I would listen to the advice to use one of the major firms that provides free FA advice to a portfolio of 'my' size.... Vanguard, Fidelity, etc... I would also make sure that I knew the total fee structure of the whole portfolio... IOW, I want to know how much of my money was being spent on the workings of the firm.... if they cannot give me that info, I would move on....
If you feel you need the assistance of an FA, these are very good questions to ask. An advisor associated with a bank is going to recommend those products, and those products typically have high fees. Make sure you understand what the fees are for your initial investment, and if you leave the investment. Get these disclosures in writing.
Also ask what standard the FA is bound to - are they a fiduciary who is legally obligated to put your interests first?
