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Old 10-15-2013, 11:39 AM   #21
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The biggest amount is where I put my 401K savings went into. This account is constantly buying and selling so much that I cannot keep up with what I have. This one has grown the most, but has the high fees.
OMG!

This is probably the worst possible way to have your money "managed." You are probably paying a fortune in brokerage commissions on top of the management fee.

Do you happen to have your account at Raymond James? If you do, I suggest you look at moving out of there quickly. In any event, it's not going to accomplish anything to have a "performance discussion."

As pointed out earlier, your FA will have a giant litany of reasons that he/she is doing a marvelouse job with your money for a mere pittance in fees. "Why, you are almost a charity case with the firm as they charge you so little. You could never comprehend the complexity of investing on your own and you would soon be eating cat food as your retirement suddenly becomes so very bleak. You would almost certainly be forced back to work without them."

These guys live off people like you. There's an old book out called Where are the Customers' Yachts that goes into all they way the financial service industry fleeces their chumps clients. Over time they carefully move money from your account to theirs. The book is worth reading but not until you've read Millionaire Teacher and moved your money away from your current FA.
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Old 10-15-2013, 11:44 AM   #22
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This is posted separately to make it stand out more.

Please post a list of your investments and their various amounts. Identify what is in taxable, tax deferred and Roth accounts. You will get better comments on your investments if it is clear what they are.

Do you have any data on your portfolio return over the last several years? It would be interesting to see if you FA has equaled the performance of a simple passive portfolio. Typically, the FAs don't make it easy to evaluate the total return of a portfolio. They love to point out "winners" and somehow forget all about the "losers."
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Old 10-15-2013, 11:52 AM   #23
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If you feel comfortable can you tell us where your money is invested?
It is Wells Fargo Advisors which was A. G. Edwards before Wells Fargo took over. I have had the same FA for since 1998 and I have a lot of trust in him. He has never steered us wrong. I got this one account (with the high fees) in 2006.
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Old 10-15-2013, 11:55 AM   #24
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This is posted separately to make it stand out more.

Please post a list of your investments and their various amounts. Identify what is in taxable, tax deferred and Roth accounts. You will get better comments on your investments if it is clear what they are.

Do you have any data on your portfolio return over the last several years? It would be interesting to see if you FA has equaled the performance of a simple passive portfolio. Typically, the FAs don't make it easy to evaluate the total return of a portfolio. They love to point out "winners" and somehow forget all about the "losers."
I have access of everything concerning my funds. The year to date performance on this one fund is 6.5%. But the performance since inception is only 2.7%.
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Old 10-15-2013, 12:03 PM   #25
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Reubenray, there is a very clear article today by financial writer Gail MarksJarvis about using index funds as supported by the new Nobel economics medalusts. It is behind a firewall in the Chicago Tribune but you might be able to find it with a google search.

It is so clear that even my DH understands it .

Watch out for your FA to compare apples to oranges in terms of fees and dividends. They are good at that; DH has a small legacy account at Edward Jones and has no idea what fees he is actually paying.

Go look at Vanguard's website and check Wellesley, for instance, where a $400,000 investment would have cost $720 in fees at 0.18% and increased in value by $24,000 over the past year, including dividends and market value increase (I am not good at math but this is what I got from the Vanguard website).

If you called Vanguard, Fidelity, or Schwab, etc., they will be happy to discuss an index fund portfolio and its costs with you.
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Old 10-15-2013, 12:21 PM   #26
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I have access of everything concerning my funds. The year to date performance on this one fund is 6.5%. But the performance since inception is only 2.7%.
I am asking for everything plus it needs to be identified as to what it is. I have VTSAX (Vanguard Total Stock Market Admiral Shares) which is a broad US stock index. It is up 23.32% this year as of 10/14/2013. If you say you have a stock fund, you're not doing too well. For a bond fund, you're doing really well.

"Since inception" is pretty useless. 5 and 10 year returns would be nice. It is very unlikely you are beating any of the typical index portfolios.
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Old 10-15-2013, 12:26 PM   #27
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It is so clear that even my DH understands it .
Get Millionaire Teacher for him. After years of trying to get DW to understand, she read this and says it now all makes sense.
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Old 10-15-2013, 12:47 PM   #28
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The dividend adjusted price of VFINX, Vanguard's S&P 500 index fund, was between $100 and $114 during 2006. It's at $157 as of yesterday. That's a 37% to 57% gain from 2006 until now. However, much of that return will depend on if you added to or withdrew from the account during that period. Dividend payers will have a different gain, as will international stocks and a balanced stock/bond portfolio. But 2.7% is not good in my opinion.
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Old 10-15-2013, 01:19 PM   #29
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It is Wells Fargo Advisors which was A. G. Edwards before Wells Fargo took over. I have had the same FA for since 1998 and I have a lot of trust in him. He has never steered us wrong. I got this one account (with the high fees) in 2006.
A. G. Edwards was my last "full service" brokerage account. It was the very early 1980s and before the days of discount brokerages (I think). It may have been just as they were appearing. I really liked my broker and we talked about a lot of things. One day he told me about his parole for auto theft. I also found out he got his GED when he was in prison. So much for the standards in the brokerage business at that time. I don't know if they have changed.

I moved soon afterwards and moved my account to Vanguard.
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Old 10-15-2013, 02:04 PM   #30
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I predict nothing but frustration here. People are often more faithful to their FAs than they are to their spouses.

Ha
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Old 10-15-2013, 02:30 PM   #31
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I predict nothing but frustration here. People are often more faithful to their FAs than they are to their spouses.

Ha
That's pretty true when people are working. I've seen many people suddenly realize (like the OP) how much money they are paying their FA once they retire.

I'm done with any direct comments unless the OP produces a better summary of their assets. He's either done with us because he realizes we're not in favor of using a FA and that none of us knows how to get some dramatically lower fee schedule.

The longer someone uses the same FA the harder it is to accept that when you thought they were looking out for your best interest they were really just lining their pockets with your money. It's like finding out your spouse of 15 years had been having regular affairs that you just didn't find out about until now.
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Old 10-15-2013, 03:26 PM   #32
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It is Wells Fargo Advisors which was A. G. Edwards before Wells Fargo took over. I have had the same FA for since 1998 and I have a lot of trust in him. He has never steered us wrong. I got this one account (with the high fees) in 2006.
Well there's your problem. You have an account at a major advisor and you have too much faith in your FA. It sounds as if they are trading on your account to rack up fees.

What exactly are you invested in, I'll bet it isn't low cost index funds.
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Old 10-15-2013, 05:05 PM   #33
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It is Wells Fargo Advisors which was A. G. Edwards before Wells Fargo took over. I have had the same FA for since 1998 and I have a lot of trust in him. He has never steered us wrong. I got this one account (with the high fees) in 2006.
I was with Wells Fargo / AG Edwards for 7 or 8 years until I heard about index investing and found this forum and started reading up on it.

What finally convinced me to switch is that I set up a simple spreadsheet to compare my balances, returns and fees / expenses between Wells Fargo and Vanguard AND THEN project that on out for 20-30 years or so into the future.
I would encourage you to do the same and see the difference for yourself.
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Old 10-15-2013, 05:33 PM   #34
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That's pretty true when people are working. I've seen many people suddenly realize (like the OP) how much money they are paying their FA once they retire.

I'm done with any direct comments unless the OP produces a better summary of their assets. He's either done with us because he realizes we're not in favor of using a FA and that none of us knows how to get some dramatically lower fee schedule.

The longer someone uses the same FA the harder it is to accept that when you thought they were looking out for your best interest they were really just lining their pockets with your money. It's like finding out your spouse of 15 years had been having regular affairs that you just didn't find out about until now.
I am not done with you, but I am not comfortable putting my personal investment information out for the entire world to see.

I have discussed this issue with my FA and will meet with him in a few weeks.
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Old 10-15-2013, 05:48 PM   #35
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I am not done with you, but I am not comfortable putting my personal investment information out for the entire world to see.

I have discussed this issue with my FA and will meet with him in a few weeks.
Reubenray,
If you'd prefer not to use any additional real numbers, you could just instead just multiply all the dollar amounts by some X factor. And maybe give an indication of which funds your FA has selected for you. The info that folks here will likely provide will allow you to be well prepared for your upcoming meeting with your advisor.

I've gotten help on this forum (and on Bogleheads) that has been worth many tens of thousands of dollars. Getting informed opinions from people with no vested interest in your decision can be an incredibly valuable thing.
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Old 10-15-2013, 09:52 PM   #36
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reubenray, I just checked my Vanguard accounts and looked at the YTD return for a large rollover IRA I haven't touched in several years (not even to rebalance). YTD return is 8.02% for a conservative (roughly 50:50 bonds and stocks) portfolio of index mutual funds. If you're not doing better than that and you're paying $thousands in fees, well, I'm not sure what you're paying for.
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Old 10-15-2013, 09:56 PM   #37
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I am not done with you, but I am not comfortable putting my personal investment information out for the entire world to see.

I have discussed this issue with my FA and will meet with him in a few weeks.
Don't submit real balances. Do the following.

In one column list the total for each fund (or stock). At bottom, add up the total.
In next column list the name of fund (or stock). In next column list the ticker. In next column list the fund expense ratio (stock will have no expense ratio). In next column calculate the percentage of each fund or stock by the total.

Don't reveal the fund balances, just list the fund names and the percentages. It should add up to 100%.

It's likely you are paying more than 1% in management fee to the advisor company. In addition you are likely paying 1% or more too much in expenses in the funds, or in churning. So you are starting off each year -2%. That's quite a bit of headwind to overcome.

As for the experience here, keep in mind that someone may have given you a sharp whack to the back of the head, and another has given you a friendly nudge. In any event, the building is on fire, and everyone wants you to get to the exit for your own sake.

The first step is education. When you go in a few weeks to meet the nice advisor, it will help you to have an impartial analysis of the investments. Also, there is quite a lot of burden on yourself to start reading, and follow up with questions.
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Old 10-16-2013, 05:55 AM   #38
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I have discussed this issue with my FA and will meet with him in a few weeks.
Never forget that he is a commissioned salesman with no real interest in your financial well being. If he was, he would have recommended you move your money into index funds long ago. Any discussion with him will be nothing more than his effort to maintain you as a client so that the income to him from that relationship will continue.

The recent Nobel prize in economics was given to one guy that says you can't time the market (Fama). One of the others (Shiller) thinks you can. In both cases they talk in terms of broad market indexes and don't wade into the world of individual stock selection. Data has consistently shown that broad based index funds consistently beat a very high percentage of managed mutual funds over any time period selected. There are no managed funds that consistently beat indexing in multiple time periods.

If your advisor was really so good, why is he wasting his career with you? If he could beat the indexes consistently every pension plan in the world would be making him outrageous offers to manage their assets.
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Old 10-16-2013, 07:25 AM   #39
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Watch out for this "argument." He will claim that 1% fee is not really 25% of your SWR because the 1% is flat but the 4% actually increases over time. This is true but irrelevant. It is true that if you follow the 4% SWR rule strictly that 4% is % of INITIAL portfolio and adjusts up,for inflation. Over the years that amount grows to be a bigger percent of the total portfolio-5%, 6%, etc. But you advisor, nice guy that he is ONLY takes 1% of YOUR MONEY!!! And never adjusts that percent up. Gee, what a pal. This ignores the fact that he is not worth half of that and as your portfolio grows probably not even worth a tenth of that. There is zero evidence that you cannot domjust as well with lower costs. On the contrary, reams of studies show that such fees will take huge amounts of your portfolio and cause you to fail.
If you can know EXACTLY the $ amount that you are paying to him and divide it by the time you think he spends on you and your investments, I think only then can you judge if that is what you want to pay. Often you will find they are making $500 -$1000 per hour off of you. Is that the rate you want to pay?
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Old 10-16-2013, 07:30 AM   #40
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Don't overlook the fact that most FAs will send you a yearly birthday card.
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