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Old 09-10-2012, 12:06 AM   #121
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We get, you don't like fee based advisors..........
We get it. You DON'T get it. IT IS NOT ABOUT FEES, it is about the AUM model. And we get that you don't actually have a legitimate defense of that model after multiple fails....so now you roll your eyes about charging folks $22000 more every year as if that is nothing.

Seems like a financial advisor who charges clients a percent on their assets under management ought to be able to somehow justify why that is not the ripoff that it seems to be compared to actually just charging for your time and effort in a more straightforward manner.. But so far has not happened.

The easy answer is the one I heard from Rick Ferri's Portfolio Solutions (who charge a relatively low 0.25% AUM) the answer is that for the majority of their portfolios they are under $4million so it all comes close....so long as your portfolio stays smaller that makes the numbers add up equally..but the principles? Not so much.
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Old 09-10-2012, 05:21 AM   #122
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We get, you don't like fee based advisors..........

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Originally Posted by urn2bfree View Post
We get it. You DON'T get it. IT IS NOT ABOUT FEES, it is about the AUM model. And we get that you don't actually have a legitimate defense of that model after multiple fails....so now you roll your eyes about charging folks $22000 more every year as if that is nothing.
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Old 09-10-2012, 08:45 AM   #123
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We get it. You DON'T get it. IT IS NOT ABOUT FEES, it is about the AUM model. And we get that you don't actually have a legitimate defense of that model after multiple fails....so now you roll your eyes about charging folks $22000 more every year as if that is nothing.

Seems like a financial advisor who charges clients a percent on their assets under management ought to be able to somehow justify why that is not the ripoff that it seems to be compared to actually just charging for your time and effort in a more straightforward manner.. But so far has not happened.

The easy answer is the one I heard from Rick Ferri's Portfolio Solutions (who charge a relatively low 0.25% AUM) the answer is that for the majority of their portfolios they are under $4million so it all comes close....so long as your portfolio stays smaller that makes the numbers add up equally..but the principles? Not so much.
Lots of industries have pricing schedules that don't obviously make sense. Why is the airline ticket I bought last week three times the cost of the other seats on the same plane that were bought a few weeks earlier? Same seats, same flight, same plane.

If you don't like AUM based fees, stay away from organizations charging them. But I suppose that means you will have to avoid mutual funds and ETFs like the plague, since they have the same pricing schedule.
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Old 09-10-2012, 09:26 AM   #124
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You don't get.

What I think he's saying, and what I think, is that the AUM model is a commission on assets. If it isn't, please explain.
A fee-based advisor charges a fee on assets managed. Higher portfolios pay a lower fee than smaller ones. I have stated this numerous times on here, you can do a search and see that. I don't understand the confusion. Some folks throw around fee-based advisors and hourly fee advisors as the same thing which they are not........I do get......
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Old 09-10-2012, 09:27 AM   #125
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Thank you, my sentiments exactly........
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Old 09-10-2012, 01:13 PM   #126
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After I FIREd, I was a DIYer when it came to consolidating my portfolio and get it all under 1 roof. I got my legal paperw*rk updated using an attorney.

These days, I brush my teeth every morning with my financial planner. Then we have coffee.
I assume sleeping with your financial planner gets you a preferential rate.... and all your assets are very, very, well managed
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Old 09-10-2012, 02:54 PM   #127
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I assume sleeping with your financial planner gets you a preferential rate.... and all your assets are very, very, well managed
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Old 09-11-2012, 07:00 AM   #128
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A similar AUM is in effect for the major institutions, like Vanguard and Fidelity. As the portfolio increases in size, the percentage changes, and is lower. I would say at this time that the practice is an industry standard.

I venture a guess that larger portfolios have more holdings, more reports, and more customization.
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Old 09-11-2012, 05:24 PM   #129
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There have been 5 earlier posts in this thread making unsubstantiated claims:
#72, 74, 87, 100, 109. They were shown to be wrong (with external references in #86, 98, and 102)
Not once has the erroneous information been countered or acknowledged, but instead are followed by more nonsense with #124 above being more of the same.

"Higher portfolios pay a lower fee than smaller ones. I have stated this numerous times on here"

really? the fee charged using the sliding scale in post #109 AUM on $1M is around $6875, the fee on $5Million is at least $12475.(Actually it would be higher..this very geneneously assumes the ludicrous notion that the basis points drop to 14 on everything over 1Million so this is a wildly low estimate)
In no place in the universe is $5 Million not a higher portfolio than $1 Million and nowhere in the universe is $12475 lower or less than $6875.
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Old 09-11-2012, 05:37 PM   #130
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The answer to the question is "No, thank goodness!" but there are a few wannabes constantly circling me like sharks (calling, sending me birthday and Christmas cards, wanting to visit me at home or meet for lunch, trying to pry into my resources). I inherited some of these fellows from my husband, and they can't seem to understand that that gravy train is over.
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Old 09-11-2012, 05:46 PM   #131
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Do what I do. Ask them "if you're so great, why are you working? I'm not". Works well for those my age.
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Old 09-11-2012, 06:43 PM   #132
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Thanks to all who participated.

This thread has now run its course.

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