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Old 05-27-2013, 10:44 PM   #21
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You mentioned that you have posted this portfolio proposal on other forums. Could you please list those other forums? And, was their take on this proposed portfolio much different than the first few responses that you have received here?
If you google an excerpt of the text of this post with those first 3 funds (copy/paste), you'll find the other places (fat wallet, savingadvice, and financeforumsee). Some entertaining replies there since the moderation appears to be a bit more freewheeling at some of those places.

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Originally Posted by redduck View Post
You might be a bit underweight on the Fidelity Contrafund.


I was wondering why we aren't down to fractions of percents. I mean, 1, 2, and 3 % increments are pretty coarse. Should you really have 50% more of fund X than fund Y? Maybe 37.5% more would be 'better'?


To the OP: What did your FA say? What data and reasoning did he give for this many funds? After all, he's the one getting paid for this.

I don't think you'll find anyone that is going to evaluate:
a) placement of each investment for tax efficiency
b) the quality of the funds he's proposing
c) overall asset allocation for folks 5-10 years from retiring
on dozens of funds for free (I won't even take the time to count them, that is too much work!). To even attempt it would be a mind-numbing task, and as others have said, a worthless proposition anyhow. Putting them into M* X-Ray would be a LOT of work, and it would show you just how ridiculous the overlap would be. But why didn't your FA do this for you?

Are you familiar with a saying that has the words " If you can't dazzle them with brilliance, then baffle them with ...."? Your FA is baffling you.

This is nuts, just plain nuts. Soup to nuts level nuts. Is this a joke?


-ERD50
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Old 05-27-2013, 10:49 PM   #22
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Is this a joke?
If not, the joke is on the OP if he takes the FA's advice...
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Old 05-27-2013, 10:53 PM   #23
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"0% Fidelity Contrafund Fund".............now that's a small percentage of that fund! What is this FA smoking?
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Old 05-28-2013, 04:36 AM   #24
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And, was their take on this proposed portfolio much different than the first few responses that you have received here?
I haven't read the others yet. (You mean you read other forums before you read Early Retirement? Not me! )

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Originally Posted by braumeister View Post
They mostly seem to have pretty hefty expense ratios. I would also want to ask him to show me the M* x-ray views, since I'm guessing there is some serious duplication in that bunch.
Not significant. One thing I didn't make clear is that the retirement account list includes what is necessarily four separate accounts: My current employer 401k, my spouse's current employer 401k, and then IRAs. Still, I think the comments remain valid, since in the FA's own words, we should be managing our entire portfolio as a single portfolio.

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Originally Posted by comicbookgujy View Post
Did you ask him why so many funds? What's your investment objectives?
I have started that conversation (and am aiming to use these threads as source for further down that conversation). I wrote him an email over the weekend saying, among other things: "The proposal is such a complex and voluminous approach that it seems like it would take a very long time for you to explain each choice you made, clearly and completely enough so that we could understand and concur with it."

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Do you know your target AA with these funds? Did your FA tell you? Just curious.
He didn't tell me... I had to plug the whole thing into a new Quicken file to tell myself. This is something else I included in my email: "The proposed investments drive our portfolio to an extreme level of risk for our ages – from a 65/35 split to what is effectively an 80/20 split (see pie charts, below), which seems more suitable for young investors just starting out. We probably need to start with a discussion of what asset allocation we should be pursuing."

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Originally Posted by killingme View Post
WOW that is a lot to have to track! Is the firm actively managing these and re balancing regularly or is their diversification strategy their hedge? Unless each fund is the best of breed there has to be a simpler approach.
Two more points I made in my email to him: "Something else we outlined from the start was that we would not consider changing our brokerage to yours." And: "(See a comparison of just-the-non-retirement suggestions to possible alternatives, in a chart, below.)" In most cases, I readily (okay - it took me a few hours) came up with what I would consider better funds.

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Originally Posted by panacea View Post
You should be able to hit every important asset class with about 14 low cost mutual funds.
Some folks would say three or four.

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Originally Posted by ERD50 View Post
If you google an excerpt of the text of this post with those first 3 funds (copy/paste), you'll find the other places (fat wallet, savingadvice, and financeforumsee). Some entertaining replies there since the moderation appears to be a bit more freewheeling at some of those places.
Oh joy... I cannot wait.

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Originally Posted by ERD50 View Post
I was wondering why we aren't down to fractions of percents.
Of course, the Contrafund is fractional, which is why it shows as 0% in that list.

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To the OP: What did your FA say? What data and reasoning did he give for this many funds?
We haven't had the follow-up conversation yet, but I believe he'll make the point that this puts a fund in every single one of the nine blocks (value, core, growth -by- small, medium, large) plus covering both international equities and bond, and covering a few "other" categories. He probably will make some disparaging remarks about funds that cover total markets, etc.
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Old 05-28-2013, 05:45 AM   #25
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Looks like a shotgun approach. Diversification by number of funds.
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Old 05-28-2013, 09:17 AM   #26
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Dumbest thing I have ever seen. Fire that "advisor".
+1
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Old 05-28-2013, 09:35 AM   #27
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.... I wrote him an email over the weekend saying, among other things: "The proposal is such a complex and voluminous approach that it seems like it would take a very long time for you to explain each choice you made, clearly and completely enough so that we could understand and concur with it." ...
Exactly - and isn't that reason enough to dump this FA right now? The only reason I can see for such complexity is that some customers will be impressed with how 'thorough' and 'detailed' this is, and they just 'know' they couldn't do this w/o the help of this incredibly 'intelligent' FA who can put this long list together. But it is all just a bunch of that 'Baffling Stuff'.


I could go on, but like I said before, this is NUTS.


But I really guess I should withhold judgement until I know the exact allocation of the ContraFund to properly evaluate this - just guessing that it is somewhere between 0.00000% and 0.50000% is not enough information for me. <<< I'M KIDDING!


But thanks for posting, this puts everything you post in a new light for me.

-ERD50
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Old 05-28-2013, 09:49 AM   #28
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But thanks for posting, this puts everything you post in a new light for me.
Yeah. I was thinking the OP was just yanking our chain. At least now we know there's 4 accounts and an advisor that's, well, I'll let everyone fill in their own descriptor there.
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Old 05-28-2013, 09:57 AM   #29
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seems like some advisors complicate things to continue to be "needed". A simple 3 or 4 fund portfolio would be to easy for layman to manage.
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Old 05-28-2013, 10:30 AM   #30
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Exactly - and isn't that reason enough to dump this FA right now? The only reason I can see for such complexity is that some customers will be impressed with how 'thorough' and 'detailed' this is, and they just 'know' they couldn't do this w/o the help of this incredibly 'intelligent' FA who can put this long list together. But it is all just a bunch of that 'Baffling Stuff'.
+1.

In my first post, I wasn't sure if it was you or the FA who chose so many funds. If it was the FA, I'd agree he/she is trying to baffle you and give the impression you can't do this on your own. Unfortunately that's not uncommon, but it's a needless ruse.

Even if you conclude you want an FA to oversee your investments, there's no need to have so many funds unless he/she/you have no confidence in any of them (they're trivially small positions). It looks like someone who does not know what to pick, so he/she has chosen quantity over quality - or a shotgun approach as others have noted. That's not confidence inspiring from an FA.

I would not continue with this FA if he/she put this portfolio together. He/she should provide you with expense ratios, overall allocation and tax efficiency/placement for each fund - you should not have to ask elsewhere, and pay an FA too.
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Old 05-28-2013, 10:35 AM   #31
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Don't waste your time with this planner.
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Old 05-28-2013, 11:02 AM   #32
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Dump the financial adviser. This set up looks horrible.

Go to Vanguard. Buy the Lifestrategy Conservative fund. If you are feeling lucky, buy the Lifestrategy Moderate fund.

Have a beer. Go for a walk. Play some tennis. Count the thousands or tens of thousands you won't be losing to a financial advisor each year

Done.
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Old 05-28-2013, 12:42 PM   #33
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With so many overlapping funds, an investor could actually be less diversified than intended. This is way too complex and probably would not be a high performing portfolio.

Given that the OP has posted this list in several forums, one might wonder whether the idea was to populate Google searches with the fund names. One might wonder, if one were a skeptic........
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Old 05-28-2013, 01:01 PM   #34
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Exactly - and isn't that reason enough to dump this FA right now?
Not really: His services are already paid-for, and investing is just one part of what he's providing advice on. So there's really no reason to "fire" him. It'll just upset the friend who recommended him, and won't actually benefit us. Besides, perhaps calling him out on these problems will get him to do some more work that I can use, and get him a bit more nervous about losing my friend's business, that he'll look into doing a better job for her going forward.

In the end, he's going to have to convince me that he's correct before we actually use any of his advice.

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The only reason I can see for such complexity is that some customers will be impressed with how 'thorough' and 'detailed' this is, and they just 'know' they couldn't do this w/o the help of this incredibly 'intelligent' FA who can put this long list together. But it is all just a bunch of that 'Baffling Stuff'.
I'm sure that my weekend email to him dissuaded him of the notion that such an approach will impress us.

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But thanks for posting, this puts everything you post in a new light for me.
I don't see how. Perhaps your explanation of that will put everything you post in a new light for everyone.
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Old 05-28-2013, 01:07 PM   #35
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Given that the OP has posted this list in several forums, one might wonder whether the idea was to populate Google searches with the fund names. One might wonder, if one were a skeptic........
Given how my doing so will likely to bring more shame than fame to the funds ...
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Old 05-28-2013, 02:28 PM   #36
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Not really: His services are already paid-for, and investing is just one part of what he's providing advice on. So there's really no reason to "fire" him. It'll just upset the friend who recommended him, and won't actually benefit us. Besides, perhaps calling him out on these problems will get him to do some more work that I can use, and get him a bit more nervous about losing my friend's business, that he'll look into doing a better job for her going forward.

In the end, he's going to have to convince me that he's correct before we actually use any of his advice.

I'm sure that my weekend email to him dissuaded him of the notion that such an approach will impress us.

I don't see how. Perhaps your explanation of that will put everything you post in a new light for everyone.
My opinion is that you are making several mistakes. Paying for financial advisor, and then looking for free validation of FA recommendations is just baffling to me. If the FA is putting you into 80% stock fund portfolio when you are 5-10 from retirement, his advice is so out of line with convention, it tells me he is a shark. If that didn't convince you, then the array of 50 funds (with above average expenses) should tell you something. And a real warning bell for me is that the advisor comes to you based on a friend's recommendation.

You asked, so I answered. I do hope it turns out well for you.
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Old 05-28-2013, 02:57 PM   #37
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Paying for financial advisor, and then looking for free validation of FA recommendations is just baffling to me.
Really? So I guess you also feel that Angie's List is a waste. We'll have to agree to disagree. If an electrician comes in and determines that the remedy for the fact that we lose the light bulb in a specific receptacle every month or so is to use light bulbs rated for 130v instead of 120v, I'm going to give that a sniff-test on appropriate online forums, rather than blinding accepting the expert professional's say-so. If the comments I get online support what the expert says, confidence goes up. If the comments I get online don't support what the expert says, then maybe I need to consult another expert.

What's a "mistake" is relying either on online advice or the advice of a professional. The former is just plain foolish, and the latter is pretty silly too, given that also consulting online resources is practically without cost (and, in this case, would have had the client actually going ahead with this adviser's recommendations!)

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If the FA is putting you into 80% stock fund portfolio when you are 5-10 from retirement, his advice is so out of line with convention, it tells me he is a shark.
So why would you suggest that it wouldn't be a good idea to consult online forums to validate that suspicion? Your earlier comment is simply not making any sense to me.

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You asked, so I answered. I do hope it turns out well for you.
Me too. I'm using the constructive insights folks are providing me in my reply to the adviser. Perhaps I can even use such info to brow-beat him into refunding the some portion of his fee that would be attributable to investing advice, since he seems to have disappointed me so badly in that regard.
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Old 05-28-2013, 03:20 PM   #38
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Really? So I guess you also feel that Angie's List is a waste.
Angie's List is in business to make money, especially now that it is a public company.

Do some research on them...a good idea turned into a cash cow with most contractor's paying fees to get to the top of the lists and promote coupons (which have no meaning since they generally can't be applied after a quote is given). They are no different than the coupon shopper that ends up in my mailbox each week. We tried to use Angie's List last year when rehabbing a house for sale.....we gave up with their recommendations (in general) due to higher pricing and other professional reasons.

Try to find a lawyer recommendation on Angie's list... Or a FA's recommendation.
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Old 05-28-2013, 03:38 PM   #39
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I don't see how. Perhaps your explanation of that will put everything you post in a new light for everyone.
Sorry, I didn't actually mean that in a derogatory way, but as a matter of explanation. IIRC, some earlier posts from you struck me as very complicated. I think you just view things differently than me in terms of complexity. I'm a Keep It Simple Stanley kinda guy. Everything should be as simple as possible, but no simpler.

It is actually just stunning to me that anyone would seriously post a list like that for review, or that they would take it seriously for more than a nano-second before just handing the list back to their 'advisor' with a 'are you joking?' look on their face. The complexity is just staggering to me.

-ERD50
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Old 05-28-2013, 03:57 PM   #40
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Really? So I guess you also feel that Angie's List is a waste. We'll have to agree to disagree. If an electrician comes in and determines that the remedy for the fact that we lose the light bulb in a specific receptacle every month or so is to use light bulbs rated for 130v instead of 120v, I'm going to give that a sniff-test on appropriate online forums, ....
I think you are getting the responses you are, because there is such a huge disconnect.

If you go to a forum of capable DIY people, I think they would typically respect that a non-DIY person would call a licensed electrician for certain problems and that electrician would most likely be able to help the homeowner out. But second opinions are fine - is the guy over-doing it, or maybe taking shortcuts that will cost you more later, maybe he missed something? It's not all black & white.

But you've been around this forum long enough to know that the vast majority are DIY, and feel that the skills you need to evaluate an FA are enough skills to DIY anyhow, therefore invalidating the need for the FA (in most cases). But rather than come here and ask for portfolio advice, you go to the FA and then ask for a review of that recc. It's backwards from how most of us would look at it, so you are getting a lot of kinds of responses.

As another illustration, go to one of the plumbing forums and ask about those magnetic/electro/magic water conditioners that use no salt, just a couple wires wrapped around a pipe. They'll all tell you it's snake oil. But you would come in and say, "I talked to the guy who sells these things, I rented one for 6 months, he says they are great, what do you think?" What kind of replies would you expect?

-ERD50
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