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Old 01-14-2015, 10:47 AM   #41
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The best defense is a good offense, and the FA is very good. Look how he has changed the focus from "why did my portfolio not do better" to "why doesn't he want to work with me". He still didn't give you the courtesy of even a boilerplate answer to your real question. You are lucky--he could have said you wanted low management fees but you really should allow him to churn your funds to take advantage of market swings and here is how much better he would have done if you had (presto, a chart with cherry picked timing results) blah blah blah

Good riddance.
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+1 Rather than explain his actions he went on offensive to deflect having to do so.
+2 This guy did not do a very good job for you at all, and charged you anyway. You are much better off without his input.
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Old 01-14-2015, 10:56 AM   #42
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The best defense is a good offense, and the FA is very good. Look how he has changed the focus from "why did my portfolio not do better" to "why doesn't he want to work with me". He still didn't give you the courtesy of even a boilerplate answer to your real question.
This is exactly what I was thinking. He never answered your question, Firemenow. He had you analyzing your own behavior instead of his.

So what is your next move?
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Old 01-14-2015, 11:01 AM   #43
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This is exactly what I was thinking. He never answered your question, Firemenow. He had you analyzing your own behavior instead of his.

So what is your next move?
Thanks, I will likely be building a simple bogglehead 3- or 4-fund portfolio and managing myself after a bit more research.

I have to assess the tax consequences, however, of moving stuff around at different times and from different allocations and account types.

Best,
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Old 01-14-2015, 11:02 AM   #44
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As always, so nice to see these friendly faces and voices when I check in around these parts.
Well, you know, there are leeches like for medical applications in the old days. Not necessarily beloved, but useful and somewhat appreciated. Then there are the leeches like in The African Queen. I'm sure you are much more like the former.
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Old 01-14-2015, 11:07 AM   #45
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As always, so nice to see these friendly faces and voices when I check in around these parts.
I bet you would have had a better and more thoughtful answer for the OP taking the facts as he gave them at face value (there may be more to the story but I imagine you have had clients contact you with questions about their accounts' performance)
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Old 01-14-2015, 11:32 AM   #46
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I got an email reply that was a bit of a shock. It basically said that while he appreciated a knowledgeable client, the "tone" of my email was "unprofessional, condescending and disrespectful." He said that apparently I had taken a "adversarial approach to our engagement" and he could not continue work with a relationship like that. He said that I obviously didn't understand what a "long term relationship" was all about. As such, and apparently prior to writing me the email, he had immediately terminated his firm directing of my accounts.
I'm not on social media, but if I got something like that from a so-called "professional" that I pay to manage my accounts, I'd be very tempted to take to Twitter, Facebook, Instagram, send copies to reporters at major financial outlets, let his firm's partners/execs/board of directors know, etc, and spread the word about how this guy treats his clients when they ask questions.

I'd certainly advise everybody I know who this bum is, and never to do business with him, or his firm, ever again.
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Old 01-14-2015, 11:38 AM   #47
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My guess is that yours may not have been the only email or phone call with questions. My advice is for you to call THE or one of THE managing partners and discuss it with him/her. They need to know, regardless of whether you stay or go.

I do not know what your email said but I can't imagine it was that out of line. (of course if HE is a managing partner well then…..). You had questions. He should have answered them. Handling other peoples money is stressful on both sides, for the FA AND for the client. Most FA's understand this.

In my opinion, the way this person handled it was possibly most unprofessional. Once any modicum of trust is broken, it is broken. So…I am thinking you will have to move on, either to another advisor at the same firm or somewhere else.
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Old 01-14-2015, 11:39 AM   #48
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Am I missing something? Why am I feeling embarrassed? Did I breach some kind of "code"?
I'd say he's missing something: that he works for you and should consider it a privilege to collect money from you at such a generous rate. Ego is a b****. Happily take your 0.5% elsewhere.
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Old 01-14-2015, 11:45 AM   #49
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Take the 0.5% and put it back in your pocket! Manage it yourself. Move on and prosper to your advantage, not the FA's.
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Old 01-14-2015, 12:29 PM   #50
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My experience with FA's is that once you lose confidence/trust with the other person it can't be gained back so the relationship becomes more and more adversarial. Maybe he figured it was too much effort to regain your trust and things were going to go downhill anyway.


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Old 01-14-2015, 12:50 PM   #51
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OK, so you don't have much history with him, just the past year. Maybe the year before, he helped everyone earn much more than the benchmarks. Every adviser has good years and bad years.

Still, 2% under benchmarks is not really a huge underperformance, so I would have expected him to give you some kind of rationale to put it in perspective.

Unwillingness to even discuss it indicates that he did in fact see your email as combative (and I'm sure you didn't intend it that way).

Overall, put it behind you and get on with your life. The alternative could have been to go on paying his fees for years for results you could easily achieve on your own. That would have been worse.
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Old 01-14-2015, 12:57 PM   #52
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I guess this guy has so many happy paying customers he can afford to fire you?

Good riddance for you I think.
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Old 01-14-2015, 01:06 PM   #53
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I guess this guy has so many happy paying customers he can afford to fire you?

Good riddance for you I think.

1. Either the OP was mean in his post and the response was warranted.

or

2. The FA didn't really need his money that bad.



I say good for the FA and good for the OP.


Although some FA will do anything for a buck, some others do it as a lifestyle choice and don't need to chase every client.
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Old 01-14-2015, 01:28 PM   #54
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So I sent an email (OK, maybe just a bit terse) asking why the difference? What might I be missing? Why was a significant allocation in short term bonds (which he initially said he was against)? What could "we" do in 2015 to try to make this up?
Did the FA construct that portfolio mix based on your approval, or, was it something you handed to him/her and expected him/her to rebalance throughout the year based on the objectives you both agreed to? (just curious)

Although I have never pursued using an FA I would expect some sort of periodic communication from one on actions/recommendations rather than having to proactively monitor that persons progress.

I think you've recieved some good advice here on how to move forward.

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Old 01-14-2015, 01:36 PM   #55
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Well, you know, there are leeches like for medical applications in the old days. Not necessarily beloved, but useful and somewhat appreciated. Then there are the leeches like in The African Queen. I'm sure you are much more like the former.
European leeches are used for medical applications. They are really long and nasty looking. The typical American leeches are all too short to be used. Of course, I think they are nasty looking too.

My original comment shoud have excluded fee only planners. I think they have a definite place. The commissioned FAs I have heard about have never made me think they were anything but sales people.
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Old 01-14-2015, 01:36 PM   #56
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You can be thankful that he just cut the ties instead of pawning you off to some other F/A in the firm. My daughter just was turned over to a different F/A at the same institution. I had left a few years ago and relations were a bit shaken since then. She consequently transferred to Schwab where I do business.

Your account might end up in a better place.
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Old 01-14-2015, 01:59 PM   #57
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The FA was probably thinking, "How dare the client question what I'm doing with the client's money?"
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Old 01-14-2015, 02:12 PM   #58
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There is no excuse for unprofessional conduct or communication. Period.

However, allow me to just focus on the performance issue. As a disclaimer I do not use a FA and only buy individual stocks and individual bonds (mostly munis) for my own account. I own very few mutual funds because I do not see any reason to pay their fees when I can do it myself. I listen to CNBC and read the Wall Street Journal just like they do. I will not comment on allocation among funds because I do not purchase them. I am just focusing on performance 2% below a benchmark for 1 year.

The FA's performance was based on a single year. He apparently made some choices which resulted in below benchmark performance for the year. I get it. His choices involved a decision to allocate your money in a certain way that proved incorrect as compared to his peers. No one has a crystal ball. Had he made other choices (hopefully informed guesses really) you may have been 2% above the benchmark. To me, you cannot analyze performance of money management over a single year. He should be answering the question of how he has performed against the benchmark over the past 7-10 years. Hopefully you inquired before retaining him.

As stated I do not use a FA, but (except for his unprofessional conduct) his performance needs to be evaluated over a period longer than 1 year. If you did not ask the question and do not know the answer that is reason enough to switch because you do not know his history. Many money managers investing fixed income funds simply got 2014 wrong. They never expected interest rates to go down. Virtually all of them contemplated at least a 75-100 basis point rise from January, 2014. That view would have weighted them towards short term products to protect against perceived interest rate risk.

If you decide to retain another FA, get his/her history against the relevant benchmark for an extended period of time. Just my two cents.
+2

To go further, it is possible the FA DID make the correct decisions and still underperformed last yr.

But as someone who exclusively buys mutual funds/ETFs, there is massive overduplication and likely high expense ratios in your (the OP) portfolio. So regardless of the performance those selections are a mistake, and as others said, you are lucky to be in this situation when you do not have this advisor. I don't really understand how someone could have come up with those selections.

My question is, how did you end up with this FA in the first place? Were there any red flags?

I would have made a phone call for something like this instead of e-mail.

A lot of the big firms will give you great customer service and experience, with a selection of low expense ratio funds.
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Old 01-14-2015, 02:40 PM   #59
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...
Still, 2% under benchmarks is not really a huge underperformance, so I would have expected him to give you some kind of rationale to put it in perspective.

Unwillingness to even discuss it indicates that he did in fact see your email as combative (and I'm sure you didn't intend it that way). ...
Rather than assume that the OP's email actually was combative, I'm going with the other posters who said that it is more likely the FA could not explain the under-performance, so rather than admit he's not worth 0.5%, he attacked the messenger.

For the FA, it looks better to say "I had a customer that I just couldn't work with", than to say "I am not worth 0.5% to anyone".

-ERD50
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Old 01-14-2015, 03:03 PM   #60
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FIREmenow,

I am p*ssed for you.
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