Noob strategy question

[Sonflower]

(Thanks in advance for your patience with my elementary question.)

I would like to ask for feedback to see if the "strategy" (loosely defined) that is forming in my head sounds reasonable for DH and I.

We hired a FA 1 yr ago and are $10K poorer for it. ($8K because market conditions and $2K in fees.) I don't blame him entirely but mostly as he knew we are noobs and would transfer tens of thousands without even a word to us what he was doing...I thought communication was lacking but perhaps this is normal or just his way of doing things.

We now want to terminate his services and met with an Edward Jones consulant/FA/broker last week. I am disgusted with the "Load" concept, and I am disgusted that he would get kickbacks (this info I read on another site and assume it is correct, it makes sense). Thus his "advice" could not be trusted. I think he got excited because we are in the six figures which also bothered me.

So enter USAA whom I have used for checking, savings, auto loans, insurance for decades. At first the fact they are no-load, with no-commission-agents, was very appealing. However further research on the web taught me to avoid USAA for brokerage services.

We are inexperienced but want flexibility so that as we learn we can test the waters with new investments (stocks, whatever else). (I think during the learning phase we should stick to MF.) Based on what I am reading it sounds like Fidelity or Vanguard is the best solution to fit our needs due to low transaction costs, variety of fund options and depth of online services.

Any insight, suggestions, criticisms, pearls of wisdom? Does it sound like we are going in the right direction?

[FIREdreamer]

We have had our shares of bad experiences with FAs (It doesn't mean they're all bad though). Most of our money is now invested with Vanguard while my wife's 401K is with Fidelity. I like them both, though I have a slight preference for Vanguard. What do I like? No commissions, low expense ratios, no or low fees if you invest in Vanguard funds. But if you are interested in trading stocks, you should go elsewhere.

[ladypatriot]

Quote:

Originally Posted by Sonflower We are inexperienced but want flexibility so that as we learn we can test the waters with new investments (stocks, whatever else). (I think during the learning phase we should stick to MF.) Based on what I am reading it sounds like Fidelity or Vanguard is the best solution to fit our needs due to low transaction costs, variety of fund options and depth of online services. Any insight, suggestions, criticisms, pearls of wisdom? Does it sound like we are going in the right direction?

DH and I are fans of Vanguard index funds. The Bogleheads forum is a huge source of information and advice on Vanguard funds. Bogleheads :: Index (That link looks kinda funny; I hope it comes through okay.)

Discussions there can often be quite technical; don't let it overwhelm you. Once you become familiar with the concepts and terminology over there (especially reading charts!), the discussions are well-worth the time spent. Well, they are if you like that kind of stuff .

We use Scottrade for purchasing individual securities.

Welcome to the forum!

[David1961]

I'd recommend Vanguard index funds, too. They are low cost. But regardless what you do in terms of finding a financial planner, I recommend you learn more about investing. I subscribed to a investing magazine several years ago and read it cover to cover every month for a couple of years and was surprised at how much I learned. There are also many good books on investing. The more you know, the less likely you are to be taken advantage of. Good luck.

[Sonflower]

You all are so helpful. I know we can do this without paying high load fees. I already know so much more than I did a week ago and am determined to keep learning.

Thanks again
Sonflower

[Patrick]

Check out this thread: FIRE Recommended Reading List

[Marquette]

without knowing a lot about your situation, but knowing that I went through a similar experience, I'd suggest not doing a thing until you learn more. You should be able to get through a lot of good books on investing over the next few months and better inform yourself. At that point, you will better be able to judge your current FA, if you need an FA, and what your overall course of action should be.

Speaking from personal experience, we got to a point of not trusting our FA. We learned more. We were able to validate that it just wasn't a good fit (I was young, I was stupid, I went with Ameriprise). Once the trust is gone, it's gone, so we fired our FA but didn't touch anything else until we started to learn more...

Learning more does a couple things. First, it may get you to a point of deciding to do it yourself. Second, if you do choose a new FA, you can be a more intelligent client and get more out of the relationship.