Join Early Retirement Today
Reply
 
Thread Tools Display Modes
On our own now
Old 05-12-2018, 10:31 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,655
On our own now

Yesterday after months of thinking and research, we terminated our FA. I finally “got religion” and now believe not even the best FA can consistently beat the market. We were paying fees of 0.7%, which isn’t too bad, but still resulted in our advisory fees being the second largest line item in our budget (after travel). We are moving our portfolio to Fidelity and will be converting to a “lazy” portfolio over the next few years.

Many on this forum are quite critical of FA’s. Ours helped us for a particular purpose at a particular time in our lives, and I don’t regret having her for almost 5 years. However I do appreciate the challenges posted on this forum, as these comments got me thinking it was time to self-manage again.

This decision is going to save us hundreds of thousands of dollars if we live to average life expectancy. Thank you for challenging my thinking and helping me see a better way for us!
Scuba is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-12-2018, 10:33 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 3,430
Woo Hoo! Glad to hear of your money-saving conversion.

omni
omni550 is offline   Reply With Quote
Old 05-12-2018, 11:29 AM   #3
Thinks s/he gets paid by the post
Red Badger's Avatar
 
Join Date: Jan 2017
Location: Hog Mountian
Posts: 2,077
Good on ya! There's a time and a place for most everything... It was time to let her go.
__________________
Never let yesterday use up too much of today.
W. Rogers
Red Badger is offline   Reply With Quote
Old 05-12-2018, 11:35 AM   #4
Recycles dryer sheets
arky's Avatar
 
Join Date: Jan 2012
Location: Colorado
Posts: 254
Quote:
Originally Posted by Scuba View Post
...... but still resulted in our advisory fees being the second largest line item in our budget (after travel). ...........
Just curious, where do taxes rank ?
__________________
Don't you know that dynamite always blows down ? --- Moe to Curly
arky is offline   Reply With Quote
Old 05-12-2018, 03:57 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,655
Quote:
Originally Posted by arky View Post
Just curious, where do taxes rank ?
My budget comment was in reference to after-tax spending. In the past, taxes would have been our #1 line item, but we are hoping that we will be able to reduce that over the next few years. So including taxes (federal & state), the FA fees were our #3 highest spending item.
Scuba is offline   Reply With Quote
Old 05-12-2018, 05:54 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 11,197
We have most of our monies at Fidelity as DIY investors.
You should still receive great service at Fidelity for no fees.
__________________
TGIM
Dtail is offline   Reply With Quote
Old 05-12-2018, 06:00 PM   #7
Thinks s/he gets paid by the post
iloveyoga's Avatar
 
Join Date: Jan 2017
Location: Des Moines
Posts: 1,371
I just helped my sister do the same thing!!
__________________
Retired in 2013 and we are living the dream!
iloveyoga is offline   Reply With Quote
Old 05-12-2018, 08:30 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Dec 2010
Location: USA
Posts: 1,050
Congrats Scuba! Even more funds for trips and scuba fun!
Aiming_4_55 is offline   Reply With Quote
Old 05-12-2018, 08:45 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2016
Posts: 8,968
I just had a meeting with my Fidelity guy and I'm going to give him another 2 hundred grand so I can get the managed "municipal bond ladder" built up.

Turns out I'm invested in 2 CA muni mutual funds that have a .75% annual expense. At a half mil they will provide a managed ladder of individual bonds for .4%.

Cool. More dough to blow -
RobbieB is offline   Reply With Quote
Old 05-13-2018, 06:28 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Jul 2013
Posts: 1,871
Quote:
Originally Posted by Scuba View Post
Yesterday after months of thinking and research, we terminated our FA. I finally “got religion” and now believe not even the best FA can consistently beat the market. We were paying fees of 0.7%, which isn’t too bad, but still resulted in our advisory fees being the second largest line item in our budget (after travel). We are moving our portfolio to Fidelity and will be converting to a “lazy” portfolio over the next few years.

Many on this forum are quite critical of FA’s. Ours helped us for a particular purpose at a particular time in our lives, and I don’t regret having her for almost 5 years. However I do appreciate the challenges posted on this forum, as these comments got me thinking it was time to self-manage again.

This decision is going to save us hundreds of thousands of dollars if we live to average life expectancy. Thank you for challenging my thinking and helping me see a better way for us!
We had the exact same experience, 5 years ago. Got rid of our FA (who we had used for 3 years) after being convinced we could do it ourselves. The convincing site was bogleheads instead of this one, but that's neither here nor there.

One of the best decisions we've made. No regrets.
mrfeh is offline   Reply With Quote
Old 05-13-2018, 06:59 AM   #11
Recycles dryer sheets
 
Join Date: Jul 2013
Posts: 385
Quote:
Originally Posted by RobbieB View Post
I just had a meeting with my Fidelity guy and I'm going to give him another 2 hundred grand so I can get the managed "municipal bond ladder" built up.

Turns out I'm invested in 2 CA muni mutual funds that have a .75% annual expense. At a half mil they will provide a managed ladder of individual bonds for .4%.

Cool. More dough to blow -
Assuming that you hold the bonds to maturity, for a $500,000.00 ladder (i just picked a number) you are paying Fidelity $2,000.00 for the 10 minute exercise of selecting 5-10 bonds, or perhaps less. This is not rocket science. Why not pick the bonds yourself and pocket the money. I even think Fidelity has a bond ladder tool that you can use for free. Stated another way, if you are laddering 15 years, I presume that your all-in annual average interest rate is about 3.0%. You are paying them more than 10% of one year's return.
phil1ben is offline   Reply With Quote
Old 05-13-2018, 07:49 AM   #12
Moderator
Jerry1's Avatar
 
Join Date: Nov 2014
Posts: 9,070
Quote:
Originally Posted by RobbieB View Post
I just had a meeting with my Fidelity guy and I'm going to give him another 2 hundred grand so I can get the managed "municipal bond ladder" built up.

Turns out I'm invested in 2 CA muni mutual funds that have a .75% annual expense. At a half mil they will provide a managed ladder of individual bonds for .4%.

Cool. More dough to blow -
Quote:
Originally Posted by phil1ben View Post
Assuming that you hold the bonds to maturity, for a $500,000.00 ladder (i just picked a number) you are paying Fidelity $2,000.00 for the 10 minute exercise of selecting 5-10 bonds, or perhaps less. This is not rocket science. Why not pick the bonds yourself and pocket the money. I even think Fidelity has a bond ladder tool that you can use for free. Stated another way, if you are laddering 15 years, I presume that your all-in annual average interest rate is about 3.0%. You are paying them more than 10% of one year's return.
I'm not sure of RobbieB's situation, but what I'm looking at is a bit different than a bond ladder. It's called their Core Bond Strategy. For a $500K minimum, Fidelity will create a bond portfolio for me that will generate a specified amount of income. The draw for me is that they have access to other types of debt than just treasury bonds. Though I admit that with interest rates climbing a bond ladder may be sufficient.
__________________
Every day when I open my eyes now it feels like a Saturday - David Gray
Jerry1 is offline   Reply With Quote
Old 05-13-2018, 08:10 AM   #13
Thinks s/he gets paid by the post
 
Join Date: Jan 2014
Posts: 1,760
Quote:
Originally Posted by phil1ben View Post
Assuming that you hold the bonds to maturity, for a $500,000.00 ladder (i just picked a number) you are paying Fidelity $2,000.00 for the 10 minute exercise of selecting 5-10 bonds, or perhaps less. This is not rocket science. Why not pick the bonds yourself and pocket the money. I even think Fidelity has a bond ladder tool that you can use for free. Stated another way, if you are laddering 15 years, I presume that your all-in annual average interest rate is about 3.0%. You are paying them more than 10% of one year's return.
From previous posts, RobbieB has had a FA for quite a while and likes what the FA does. That's how RobbieB can blow more dough and having a FA can give peace of mind for some people. Not quite sure if the FA had him in the 2 CA munis or if that's something that RobbieB did himself. If it was the FA maybe RobbieB should take a closer look at his other investments and ask the FA why he/she picked those. Maybe there's a tax break

OP, Have to laugh, from the title of this thread, I thought the discussion was about last child moving out.
splitwdw is offline   Reply With Quote
Old 05-13-2018, 08:28 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Amethyst's Avatar
 
Join Date: Dec 2008
Posts: 12,566
I thought it was about being retired and having to live on your savings!

Quote:
Originally Posted by splitwdw View Post

OP, Have to laugh, from the title of this thread, I thought the discussion was about last child moving out.
__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Even a blind clock finds an acorn twice a day.
Amethyst is offline   Reply With Quote
Old 05-13-2018, 11:59 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2016
Posts: 8,968
Yes, I like having someone who knows what they are doing watching my stash. They tried to walk me through buying bonds on their site and I spent a half hour looking and bought nothing. I suffer investment paralysis.

The CA muni bond funds were simply a conversion of Pop's Michigan muni bond funds at Fidelity. So that was easy, CA muni's make more sense than MI muni's if you live in CA.

At the time I didn't even know the expenses and didn't care, just switch from MI to CA for the tax advantage.

I have another account with Morgan Stanley that buys the individual bonds and that one makes the same amount of dough as the Fidelity funds with 66% of the principal. Learned by comparison.

Anyway seems like a good play for me. Get me down to 75% equities from the current 80%. I'm going to have both accounts stop re-investing interest too and just blow the dough.
RobbieB is offline   Reply With Quote
Old 05-13-2018, 12:36 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Jan 2014
Posts: 1,760
Quote:
Originally Posted by RobbieB View Post
Yes, I like having someone who knows what they are doing watching my stash.
And that's all that matters!
splitwdw is offline   Reply With Quote
Old 05-14-2018, 04:14 AM   #17
Thinks s/he gets paid by the post
DrRoy's Avatar
 
Join Date: Dec 2015
Location: Michigan
Posts: 4,939
Quote:
Woo Hoo! Glad to hear of your money-saving conversion.
Quote:
We have most of our monies at Fidelity as DIY investors.
You should still receive great service at Fidelity for no fees.
+1 and +1.
__________________
"The mountains are calling, and I must go." John Muir
DrRoy is offline   Reply With Quote
Old 05-14-2018, 09:29 AM   #18
Full time employment: Posting here.
 
Join Date: Jul 2016
Location: gypsy traveller
Posts: 673
Just an FYI - when I built my muni ladder I called Fido and they put me thru to a bond specialist. He and I discussed my situation, what return I wanted, what % of total portfolio was to be in munis, etc. He walked me thru what was available to purchase that met my needs, reviewed ratings, insurance (if any), and other particulars. I instructed him to buy what I wanted, he did so. No fee. This helped get me past the analysis paralysis. We talk every 9-12 months as bonds mature/get called and need to be replaced.
HarveyS is offline   Reply With Quote
Old 05-14-2018, 11:48 AM   #19
Thinks s/he gets paid by the post
Scrapr's Avatar
 
Join Date: May 2005
Location: Portland
Posts: 1,703
Quote:
Originally Posted by HarveyS View Post
Just an FYI - when I built my muni ladder I called Fido and they put me thru to a bond specialist. He and I discussed my situation, what return I wanted, what % of total portfolio was to be in munis, etc. He walked me thru what was available to purchase that met my needs, reviewed ratings, insurance (if any), and other particulars. I instructed him to buy what I wanted, he did so. No fee. This helped get me past the analysis paralysis. We talk every 9-12 months as bonds mature/get called and need to be replaced.
Do you (or anyone) happen to know if Vanguard does this? Or do you have to use the PAS for this advice?
Scrapr is offline   Reply With Quote
Old 05-16-2018, 10:14 AM   #20
Recycles dryer sheets
 
Join Date: Mar 2010
Posts: 129
I'm curious what the OP's FA was getting them in in returns over that 5 year period. I have contemplated getting rid of my FA from time to time. He has only averaged about 5% since 2011 but I'm in mostly very conservative stuff and 5% was the target in the begining. I'm sort of risk averse I guess. I'm not sure I want to spend the time necessary to manage it myself. I will be retired soon and will have more time so I might reconsider then.
68bucks is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
58 y/o ready to manage our own investments, but am confused! Fodus Hi, I am... 7 08-31-2012 12:32 AM
Wanna do our own "Ladies and Gentlemen of the class of '97"? tmm99 Other topics 9 12-11-2009 03:03 PM
Congrats to Our Own Ultimate Cheapskate TromboneAl FIRE and Money 42 03-20-2009 10:45 AM
Our own little Madoff BOBOT FIRE and Money 1 03-12-2009 06:03 PM
Things own you; you don't own things - know what is want and a need dex Young Dreamers 21 10-26-2005 12:40 PM

» Quick Links

 
All times are GMT -6. The time now is 08:38 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.