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Old 04-30-2013, 09:47 PM   #41
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This is such a misleading load of cr@p. Yes the PERCENTAGE they skim off becomes smaller, but the fee keeps going UP!
So, the investors should want their portfolio to go DOWN, so the advisor makes less?
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Old 04-30-2013, 10:22 PM   #42
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So, the investors should want their portfolio to go DOWN, so the advisor makes less?
Aha! Good. That is perfect! Good point to Make people aware of the silly and misleading lies such advisors try to peddle.Your answer is a great example of exactly the same sort of misleading reply one might hear from someone in a sales pitch as they try to pull this particular brand of AUM wool over people's eyes.

What ANY INVESTOR should expect is that the advisor be honest and straight forward about whether costs are increasing or decreasing and not try to hide higher fees by saying things like "the fees go DOWN as the portfolio grows." Statements like that are flat out lies. Nobody pays for things in percentages, we pay in absolute dollars. The amount of absolute dollars (otherwise known as money) such advisors charge does not go down. Instead they should say...the more you make.. The more money I am going to take from you even though I won't actually be doing much more work, if any at all.
Even better would be finding an advisor who actually charges for what they do like other professionals That would be the true fiduciary who is looking out for your financial interests as they are supposed to.. Instead we find these slick hucksters who just skim off more and more money per hour of work even though they are doing the exact same amount of work. These AUM fakers try to hide their little 3 card Monte scam in misleading pitches about sliding fee scales. My friend who is smart and still sort of fell for the lie is proof that this scam is still fooling plenty of people.
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Old 05-01-2013, 08:59 AM   #43
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Even better would be finding an advisor who actually charges for what they do like other professionals
Like the attorney who charged my client $300 to write a letter to the court about an estate? Yeah, there's a lot of work having your paralegal draft a letter that you sign for $300. I think I need to go to law school...........

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That would be the true fiduciary who is looking out for your financial interests as they are supposed to.. Instead we find these slick hucksters who just skim off more and more money per hour of work even though they are doing the exact same amount of work. These AUM fakers try to hide their little 3 card Monte scam in misleading pitches about sliding fee scales. My friend who is smart and still sort of fell for the lie is proof that this scam is still fooling plenty of people.
Tell us how you really feel!
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Old 05-01-2013, 09:30 AM   #44
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Like the attorney who charged my client $300 to write a letter to the court about an estate? Yeah, there's a lot of work having your paralegal draft a letter that you sign for $300. I think I need to go to law school...........

Tell us how you really feel!
Yeah, that lawyer probably didn't spend any extra time talking to your client or reviewing any files or the will or figuring out where to direct the letter. Charlatan!

You're still young enough to go to law school--why not give it a try?
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Old 05-01-2013, 09:56 AM   #45
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Yeah, that lawyer probably didn't spend any extra time talking to your client or reviewing any files or the will or figuring out where to direct the letter. Charlatan!


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You're still young enough to go to law school--why not give it a try?
So, instead of breaking it, I should start defending others who break it? Cool.........

On a more somber note, an elderly client of mine was charged over $12,000 for a revocable living trust without health care directives or any advanced planning. She was passed around to 3 different attorneys in the process, which took over 2 years. I do not think that is acceptable..........
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Old 05-01-2013, 12:50 PM   #46
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At least the lawyer has a set fee for generating a letter...It may be exorbitant. Heck a Financial Advisor who charges a flat hourly fee could be rip-off too if he charges exorbitant hourly fees. BUT the fee is the fee...the lawyer does not say-I charge $300 an hour for a will if your estate is a million, but if it is 2 million my rate goes up to $350 an hour. And over 2 million I charge $375/hour. and over 3 million $385 an hour.,e tc. etc... That is the difference....and since when are lawyers the best example of honest and straightforward professionals anyway?
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Old 05-01-2013, 03:46 PM   #47
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I'm surprised you found a lawyer willing to take on a project for a $300 fee....unless there is other ongoing work involved.

But on topic... We started by talking to a very nice young man from Edward Jones who wanted 3% off the the top, up front, for doing us the favor of managing our money, unless we had at least $1,000,000 we wanted to put in the same basket, in which case the up front fee would have been reduced. There would still be ongoing expenses as well, but this was less clear from our talks. We passed.

We then went to Fidelity where a very nice and knowledgeable young lady has helped us consolidate into IRAs, with a lot of hand holding and some tax, etc. advice. We are still not considered "actively managed" in terms of paying a percent for more specific investment advice, but we are in funds with higher fees (just under 1%) than if we were in Index Funds, chose our own stocks, or went into lower cost funds. We also are a bit worried their "2020" fund is pretty heavy in bonds. Right now it's way underperforming the stock market, but bonds are also likely to take a hit once interest rates rise. So while we like Fidelity, we are thinking we should get smarter about investing and look out for ourselves more than at present.
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Old 05-01-2013, 04:00 PM   #48
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........ We also are a bit worried their "2020" fund is pretty heavy in bonds. Right now it's way underperforming the stock market,........
You really can't compare returns from a fund made up of stocks and bonds to "the stock market", especially over the short term. It is about return for a given amount of risk.
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Old 05-01-2013, 05:53 PM   #49
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a very nice young man from Edward Jones who wanted 3% off the the top, up front, for doing us the favor of managing our money, unless we had at least $1,000,000 we wanted to put in the same basket, in which case the up front fee would have been reduced. .
We really have to stop repeating this kind of talk, because it perpetuates their nonsense. I assume he meant the UP FRONT FEE PERCENTAGE would be reduced, not the fee. Is that right?. If you had $999,000 he would charge just shy of $30,000 for the favor...but if you had $1,000,001 or higher it was going to be more than $30,000 in up front fee, yes?
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Old 05-01-2013, 06:24 PM   #50
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The closest I came to using a financial advisor was a stockbroker I dealt with briefly in the early to mid-90’s when I was first learning about investing. He got angry when I asked more questions than he had the patience for. After that, I read a bunch of books, subscribed to Money and Kiplinger’s for a few years, and never looked back. I’m three-quarters invested in index funds. My regrets have more to do with not keeping better control of my spending than any serious investing mistakes.
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Old 05-01-2013, 10:44 PM   #51
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At least the lawyer has a set fee for generating a letter...It may be exorbitant. Heck a Financial Advisor who charges a flat hourly fee could be rip-off too if he charges exorbitant hourly fees. BUT the fee is the fee...the lawyer does not say-I charge $300 an hour for a will if your estate is a million, but if it is 2 million my rate goes up to $350 an hour. And over 2 million I charge $375/hour. and over 3 million $385 an hour.,e tc. etc... That is the difference....and since when are lawyers the best example of honest and straightforward professionals anyway?
I have no idea how you do math........

Well, you seem to believe FA's are not straightforward, so I offered another career path where questions can be raised in regards to fees..........
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Old 05-01-2013, 10:57 PM   #52
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I have no idea how you do math........

Well, you seem to believe FA's are not straightforward, so I offered another career path where questions can be raised in regards to fees..........
I am sure that anyone who represents sliding fee scales that end up charging ever higher sums of money as portfolios grow as an example of fees being REDUCED certainly is likely to have math related challenges. In the real world, when you charge someone $12,500 one year and $16,000 the next year we call that an increased fee not a reduced fee.
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Old 05-02-2013, 04:12 AM   #53
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You really can't compare returns from a fund made up of stocks and bonds to "the stock market", especially over the short term. It is about return for a given amount of risk.
Discussion of alpha and beta should probably be a sticky thread, somewhere.
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Old 05-02-2013, 09:11 AM   #54
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In terms of performance, I have been pleased with the results.
Just wondering if you and anyone else using an advisor can share what annual return you are getting?
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Old 05-02-2013, 11:17 AM   #55
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The problem, daytripper, is that I've never seen investors who do poorly share such data, so all we ever hear about are the successes.
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Old 05-02-2013, 03:47 PM   #56
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Just wondering if you and anyone else using an advisor can share what annual return you are getting?
Again, you need to look at returns in the context of risk.
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Old 05-02-2013, 04:31 PM   #57
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My advisor is somewhat conservative, but manages to get me a good return nearly every year.

He charges between 2 and 3 percent of my total portfolio each year.

Some consider that high, but I know that his entire fee is put to good purposes that I approve of. Besides, he's a nice guy and that counts for something, doesn't it?
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Old 05-02-2013, 08:21 PM   #58
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My advisor is somewhat conservative, but manages to get me a good return nearly every year.

He charges between 2 and 3 percent of my total portfolio each year.

Some consider that high, but I know that his entire fee is put to good purposes that I approve of. Besides, he's a nice guy and that counts for something, doesn't it?
What matters is not what he gets you or what he charges.
Like anything you buy, it is about how much you want to Pay for what you get, if you can get the same for less.
If you can buy a car from one dealer for 2% less than another dealer, all other things being equal you probably buy the cheaper car. If the more expensive car is sold by the nice guy, I don't think I would pay up for that. And that is just 2% over a relatively low number for a one time purchase. Even fractions of Extra percentage points for portfolio management that you could get for less translates into giving away hundreds of thousands of dollars...what kind of a nice guy takes that kind of money out of my pocket?
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Old 05-03-2013, 03:10 AM   #59
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Precisely. I would expect that every penny I spend toward financial planning, estate planning, tax advice, would show a profit in the short to medium term, or be mathematically demonstrably profitable in the long term.
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Old 05-03-2013, 08:07 AM   #60
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So... How do you know if you're paying too much

After following this thread (and others) re: Financial Advisors... not to mention watching the Frontline Doc. I must admit, I'm left with more questions than answers.

I've reviewed my accounts & now I'm concerned that I am paying too much in fees (sigh).
No surprise, given the consensus of many on this site.

With three main accounts, each at different firms, my expenses vary from...
~ .60% for a ML 401K (This expense I'm comfortable with)
All no load mutual funds.
~ 1.9% for an Equity account with a Private Mgt Co.
individual Stocks
(but when you add the value my bond holdings to the base, they aren't included in the fees, the fee percent of the total drops to .80%)
~ 1.8% for a WF Equity Account
No load, mutual funds
(similarly, when you add my bond holdings to the base, the fee percent of the total drops to 1.4%)

Am I looking at this correctly? Should I consider fee percentage based on TOTAL account value (Stocks & Bonds) or simply against the equity portion on which the fees are charged?

I've thought about seeing an independent CFP for a review/audit of my holdings... but have yet to make the appointment.

I feel pretty comfortable managing the equity portions of my accounts - shifting to low cost index funds. However, the bond markets concern me. Ironically, the Managers I use seem to spend more time/effort finding & constructing secure bond ladders (which aren't part of the fee structure) than actively managing the equity portion of the accounts.

Any suggestions regarding...

How I might realistically review/critique my current fees??
Where to start, if I decided to shift my accounts into low cost index funds/bonds??
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