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Managing my Investment Advisor
Old 03-22-2006, 10:11 AM   #1
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Managing my Investment Advisor

OK, I will admit it: I have a chunk of money with Bernstein (the investment research company). Thus far, they have beaten with a 70:30 balance the returns I would have gotten on my own by about 1%* - net of fees. So it is not a loser for me, and I appreciate not having to fuss with it with my busy life. But... my confidence is growing and I plan to eventually take it back. They have about 65% of my holdings all in all.

Meantime, Bernstein has me at about a 70:30 balance. While I feel OK about the equity side for the time being, it occurred to me that for that 30% in bonds they are using mostly their own bond index funds (the stocks are mostly individual companies - lots of them). So:

1. I am paying the bond funds' expenses in addition to my advisory fees
2. At bond yields in the 4-7% range, the advisory fee (on balance under management) is eating up 15-20% of my bond yield. Net of fees, I can do better.

So I am thinking of advising my manager to keep the assets he has, but move them all to stocks. I will adjust my other holdings to rebalance the whole deal to 70:30 or 65:35, whatever. As long as I am paying him it might as well be for investments where their resources can really shine, rather than in bonds which I can probably do better on my own.

Does this make sense? See what trouble you guys are causing, getting me all feisty about this stuff?!*

San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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Re: Managing my Investment Advisor
Old 03-22-2006, 10:15 AM   #2
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Re: Managing my Investment Advisor

It absolutely makes sense. Go to vanguard and pay them 0.1-0.2% to manage your bond portion.


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Re: Managing my Investment Advisor
Old 03-22-2006, 11:20 AM   #3
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Re: Managing my Investment Advisor

That sounds like a reasonable approach to me, too. No sense paying someone to do something for you that you can easily do yourself at a lower cost (provided you have the time and motivation)
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Re: Managing my Investment Advisor
Old 03-22-2006, 12:44 PM   #4
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Re: Managing my Investment Advisor

Yep, it absolutely makes sense. It's like free money.
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