Fidelity Portfolio Advisory Service

[settam]

Sorry if this question has been asked before, I couldn't find where it has. My wife and I are wondering if the Fidelity Portfolio Advisory Service is worth the fee. We are novice investors, both retired. The Fidelity CFP is advising us that we have been missing out on some nice earnings. We are thinking of trying the service for a year. The amount in funds is about $900K. Just looking for advice. Thanks in advance.

 

[scrabbler1]

Don't walk, RUN AWAY from Fidelity's PAS. And I saw this as a satisfied Fidelity customer for the last 24 years. They will charge you about 1% of AUM (Assets Under Management) EVERY YEAR and put you into funds with high Expense Ratios on top of what you pay them.


You will do much better with free advice from us here and in Bogleheads than you will do with Fidelity PAS. Index funds and even Fidelity's funds with low ERs (under 1%) will be preferable to the extra $9,000 you will pay them to manage your portfolio.


Here is a thread in Bogleheads about Fidelity's PAS.


http://www.bogleheads.org/forum/viewtopic.php?t=51820

 

[LOL!]

Lots of companies now do portfolio advisement with reasonably low fees. They all use index funds. Indeed, since they are doing so well, Vanguard has now lowered the minimum and the price for their portfolio advising services. Folks may wish to check it out, so here's a blog about it: Vanguard Personal Advisor Services Manages Your Accounts At An Affordable Price | Bogleheads® Blog

Oh, Fidelity is not one of these places, so I would not recommend Fidelity for that even though we have a significant fraction of our money at Fidelity in their index funds.

 

[target2019]

USAA charges .75% for portfolio between 500,001 - 1,000,000. AS best I can tell, you get a rebalance twice a year no matter what.

One thing to look at carefully is how the fee is paid, what account(s) it comes from. I'd also be very interested in how the allocation is planned out across the entire portfolio. It sounds like Vanguard will try to avoid overlap and duplication in the portfolio.

 

[psweath]

I was a satisfied Fidelity customer and so decided to put about half of my portfolio in PAS and try it for a year. It didn't pan out. I had the other half of my portfolio in target asset-allocation funds and those funds did quite a bit better than PAS. So I dumped PAS. My Fid rep said that they had made some really good future strategy moves that year and that I should hang around. Nope. I told 'em I'd give 'em one year and one year only. I'm still a Fidelity customer - just don't use their PAS.

 

[BBQ-Nut]

I was a satisfied Fidelity customer and so decided to put about half of my portfolio in PAS and try it for a year. It didn't pan out. I had the other half of my portfolio in target asset-allocation funds and those funds did quite a bit better than PAS. So I dumped PAS. My Fid rep said that they had made some really good future strategy moves that year and that I should hang around. Nope. I told 'em I'd give 'em one year and one year only. I'm still a Fidelity customer - just don't use their PAS.

Same here.

Sounded good at the time, but regretted writing that fee check quarterly and watching the other portion of my non-PAS account do better.

Still a Fidelity customer, but don't use their PAS.

 

[MRG]

I reviewed their pitch to my Sister, high fees to manage active funds. Not a good deal.
MRG

 

[H2ODude]

I love the service at FIDO and we have all our accounts with them. I got a proposal for asset management ~3 years ago. I declined because I just wasn't convinced they could beat our primarily index fund portfolio. I did take their proposal and bought some of what they proposed just for grins, and they actually turned out quite well (they thought and I agreed that I was underweighted in international). Anyway, at the risk of inciting a thread riot I don't think anyone with a modicum of smarts and discipline should pay for such advice no matter the firm. YMMV of course, and I'm sure there are examples that prove this wrong. Rare examples.

 

[braumeister]

Another FIDO fan here. We have ⅔ of our portfolio there, the rest at Vanguard.
My personal FIDO rep is a great guy, but I only chat with him about once a year. Most recently, I had some concerns about the rebalancing I do every spring, and he gave me some very good ideas which I'll implement.

I don't think I'll ever want to use their asset management services (or any other), but for normal brokerage service they really can't be beat IMHO. I hear Schwab is excellent too, but I've never used them.

 

[MRG]

Yes many of our assets are with Fidelity. I just can't get behind their PAS offering.
MRG

 

[Ticker]

I use the PAS for about 1/4 of my portfolio. At the time I signed on to them, I could not bring myself to get fully invested in what I thought was an overbought market. They took the leap for me.

I am on the brink of cutting them loose as I have followed their example and waded into the market and out performed them.

they have put me into funds with expense ratios as high as 1.7% on top of their 1% management fee, and changes in risk tolerance only changes % invested in the same funds.

BUT, nobody that I have encountered can beat their customer service. call them at midnight on a weekend, someone answers the phone. that's worth something to me.

 

[Senator]

I have a bunch at Fidelity too. I looked into their plan. The initial consult was free, and they had a pie chart with the asset allocation they would recommend.

The allocation was just a bunch of their funds.

So, do it to get the free analysis, and that's it.

85% of fund managers cannot beat the market. Just buy the market and you will out perform your friends and look like a genious.

 

[ShortInSeattle]

I was a satisfied Fidelity customer and so decided to put about half of my portfolio in PAS and try it for a year. It didn't pan out. I had the other half of my portfolio in target asset-allocation funds and those funds did quite a bit better than PAS. So I dumped PAS. My Fid rep said that they had made some really good future strategy moves that year and that I should hang around. Nope. I told 'em I'd give 'em one year and one year only. I'm still a Fidelity customer - just don't use their PAS.

I made the same mistake. The particularly annoying part was backing out of the dizzying array of funds they'd put the money in. It took over a year to make the sales and deal with the tax implications.

To the OP: This is a notoriously "do it yourself group" and with good reason. So you'll find that bias here. If you don't want to learn how to invest (and I suggest you do learn - it's not too scary if you index) look into "target date" funds as an alternative to a hands-off managed portfolio.

 

[Pleeplus]

Funny how many people have signed up for this fidelity service. I actually did as well upon the advice of the fidelity FA. Live and learn I guess! It took me about 6 months before I had had enough of the fees I was getting charged. I moved my funds into a simple lazy portfolio using Fidelity's Spartan funds. The link below illustrates how you can construct a lazy portfolio using different investment companies including
Fidelity.

http://www.bogleheads.org/wiki/Three-fund_portfolio

 

[Gazingus]

My company sent their email pitching PAS to all employees and it included the tagline, "just 1% and that's a small price to pay for peace of mind". I couldn't believe it.

 

[retire2020]

I looked into it but their fees turned me off. I've an independent advisor(evanson) managing my assets at FIDO and Schwab and their fee is flat and low.

 

[frayne]

When I retired eight years ago and rolled over my 401 into a FIDO IRA, a FIDO advisor suggested a bouquet of managed finds along with a few index funds. About 30 in all, and I said, thanks but no thanks.

 

[travelover]

I have half my stash at Fidelity, but use mostly their Spartan funds and no fee ETFs, under my own direction. Nice people though, but no birthday cards.

 

[LOL!]

When I retired eight years ago and rolled over my 401 into a FIDO IRA, a FIDO advisor suggested a bouquet of managed finds along with a few index funds. About 30 in all, and I said, thanks but no thanks.

I hope they smelled good, but I suspect they just stank.

 

[mathjak107]

simply subscribe to fidelity insight a newsletter that caters to fidelity funds. i have been using them for more than 25 years now even though i can put models together in my sleep.

i have devoted 30 seconds a week to portfolio management for 26 years reading a friday update.i never think about my next moves all day as i would left to my own devices and it protects me from myself thinking i can time things.

we are up 1800% in the growth model since i started and beat the s&p 500 by about 500k to date starting with 100k .100k when i started is coming up on 1.9 million.

for the hunderd and change a year they charge it is well worth it. we shifted from the growth model as we get ready to retire .

a use 2/3's income and capital preservation model and 1/3 the growth and income model at this stage of our lives.

they offer quite a few model portfolios depending on your goals and pucker factor.

 

[psweath]

Another FIDO fan here. We have ⅔ of our portfolio there, the rest at Vanguard.
My personal FIDO rep is a great guy, but I only chat with him about once a year. Most recently, I had some concerns about the rebalancing I do every spring, and he gave me some very good ideas which I'll implement.

I don't think I'll ever want to use their asset management services (or any other), but for normal brokerage service they really can't be beat IMHO. I hear Schwab is excellent too, but I've never used them.

Hello brau, curious, if you'd care to share, what your concerns with rebalancing were?

Thanks,
Pete

 

[braumeister]

Hello brau, curious, if you'd care to share, what your concerns with rebalancing were?

Nothing you're probably not aware of.

I mentioned that I was concerned about the tax implications of big RMDs combined with taking SS benefits at 70. Obviously, I'm gradually converting TIRA money to Roth until then, but it still looks like a tax hit.

My friendly FIDO rep suggested moving the fixed income percentage of the total portfolio more heavily into the TIRA, which should help it to not grow as quickly. Obviously, that's more tax efficient now as well, but I hadn't considered the growth aspect. Pretty basic stuff.

 

[jerome len]

Anyone know if Vanguard's or Fidelity's fees change for managing a trust compared to managing a portfolio? My in-law's set up a trust for my wife and they charge more than I'm reading on these pages. Should I contact them to see if the fees can be reduced?

 

[MRG]

Anyone know if Vanguard's or Fidelity's fees change for managing a trust compared to managing a portfolio? My in-law's set up a trust for my wife and they charge more than I'm reading on these pages. Should I contact them to see if the fees can be reduced?

Don't know the answer but definitely ask.

The last year of DFs life he used an independent advisor that just did Fidelity. I called, pretending to be cold calling, rate shopping. Well caller id gave me away and I was greated as being my Father's son.

Well I asked and was told if DF or POA called, they would reduce his fee. Never knew how much, or if it ever got done.
MRG

 

[CaliforniaMan]

Interesting how loyal long term customers always get the worst rates in everything. Years ago when I had the whole family on Sprint with teenage kids, the cell phone bills were always outlandish. Every time I called them they reduced the amount that was owed that month, usually without much demanding on my part. Recently reduced my auto, home insurance payments substantially with a few phone calls to insurance agent. Been with him for over 20 years, but a phone call suggests you might go somewhere else. Next call will be to the cable company.

My suggestion is to always call and ask for a rate reduction. You won't ever be worse off than you were before the call, and very likely to be better off. You are in the catbird positon here.