Join Early Retirement Today
Thread Tools Search this Thread Display Modes
"Rent Your Mutual Funds?"
Old 04-16-2005, 09:00 AM   #1
Confused about dryer sheets
Join Date: Apr 2005
Posts: 1
"Rent Your Mutual Funds?"

Hello everyone,

Newbie here. I have a couple of questions that I have not seen on any of the retirement forums. I am retiring in a few months with a respectable nest egg from my employee profit sharing plan. I have never done any investing but have tried to educate myself during the past few years with classes and a lot of research on the Internet. At this point, I am considering splitting the money among three IRAs: Edward Jones, H.R. Block, and a Self-Directed for me to play with (maybe Fidelity.) I suspect that most people here would recommend doing it yourself and saving on fees. However, I am leaning toward a couple of guys to see if the return and handholding is worth the extra money.

Although I have seen very little comments on specific financial companies here, I have a couple of questions about H.R. Block. I hope someone might be willing offer an opinion or insight. H.R. Block bought Olde Discount Corp. in 1999 (renaming it H.R. Block Financial Advisors Inc.) with the intention of making it a national financial services company. Here are some items from a recent article in the Kansas City Business Journal.

1. The company is laying about 70 employees (15% of its non-field staff) in its Kansas City & Detroit offices.
2. Its 2004 fiscal year pre-tax loss was $64.4 million and they expect it to be 25% higher this year.
3. Analyst Alexander Paris, Jr. of Barrington Research stated that promises to turn the company around might include drastically downsizing the unit or positioning it for a possible sale.

Question #1. If the company is sold or declares bankruptcy, would that pose any danger to funds invested through them or make it difficult to recover your money?

As I understand it, H.R. Block Financial Advisors apparently have agreements with a large number of Mutual Fund Companies to sell Type A Shares without a load. The catch is that if you terminate your account with them, you have to sell the shares back to the Fund Company at current prices. I have never heard of this type of arrangement. It almost sounds like you are renting your funds rather than buying them.

Question #2. Have you heard of this policy before and what do you think about it?

gguy60 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 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!

Re: "Rent Your Mutual Funds?"
Old 04-17-2005, 06:51 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
Join Date: Mar 2003
Posts: 16,435
Re: "Rent Your Mutual Funds?"

No doubt others will echo these sentiments, but I really cannot imagine getting enough value out of Ed Jones to make up for the fat fees they will charge. I would suggest that you just pick a balanced fund (like Wellington or Wellesley) or do a very simple split of your money into cheap index funds (1/3 total stock market, 1/3 bond index, 1/3 MSCI EAFE) and rebalance once a year.

If you really feel the need to get some hand-holding, I would suggest a fee-only planner who will charge you a set hourly rate, help you set up a portfolio, and then leave you alone (and not charge you) until you need more help.

Finally, whatever you do, stay away from H&R Block. Sleazy shop and in financial trouble. Not likely to be a recipe for good performance.

"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."

- Will Rogers
brewer12345 is offline   Reply With Quote
Re: "Rent Your Mutual Funds?"
Old 04-17-2005, 07:06 AM   #3
Full time employment: Posting here.
bruce1's Avatar
Join Date: Aug 2004
Location: Hagersville
Posts: 793
Re: "Rent Your Mutual Funds?"

I would not trust H&R Block to do your income tax let alone mine. My cousin thought that she might like to do income tax in the winter for them and the course they gave her was totally inadequate for even simple returns. Same with their investment services.

I wish I was half as good as my dog thinks I am!
bruce1 is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
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
The Balance Mutual Fund per Mr Bogle Hillbilly FIRE and Money 26 04-08-2007 11:02 AM
Mutual Fund sale questions KM FIRE and Money 12 01-02-2007 03:46 PM
Lingo: Stock fund vs Mutual Fund Sam FIRE and Money 9 05-26-2006 10:44 AM
Suggestions on our kid's first mutual fund? Nords FIRE and Money 4 11-16-2004 09:07 AM
TIPS vs. Mutual Fund with TIPS? Telly FIRE and Money 12 07-16-2003 11:21 AM


All times are GMT -6. The time now is 01:13 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.