managed portfolio vs self managed

[ArkTinkerer]

I have about 4% of my portfolio and DW has 100% of hers with a FA at 1% fee on total assets. I like and trust the FA, but my portfolio gets more attention by running it myself. I read Bogleheads Guide to Investing and generally use the 3 fund portfolio. I normally beat the returns of my FA, but returns have been about the same since I adjusted my AA to a more conservative allocation.

My advice would be to study and read as much as possible on retirement investing. If you feel comfortable handling it yourself, then do so. Otherwise, choose a FA that best suits your needs and go with a managed portfolio.

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Just curious if your returns are about the same after you deduct the FA fees or before deducting the fees?

I'm set to pull the trigger this year. We have some funds with a FA but pay less than 1% and they purchase institutional shares of the funds so we get a bit of that back as well. Not quite a wash--the fees were suppose to be lower but their corporate office raised them. I have a moderate 401K balance and I'm thinking about going DIY with that for a few years with just a few index funds for a real heads to heads comparison.

 

[John Galt III]

My parents pay 1% to an FA at Wells Fargo for their IRAs. My dad is trying to get me to use their FA also, but I keep saying no. They apparently are happy with their FA, and my dad is completely horrified and very concerned that I am satisfied with a mere 3% return in my stable value fund, in which I have most of my retirement money.

 

[Ronstar]

Just curious if your returns are about the same after you deduct the FA fees or before deducting the fees?

I'm set to pull the trigger this year. We have some funds with a FA but pay less than 1% and they purchase institutional shares of the funds so we get a bit of that back as well. Not quite a wash--the fees were suppose to be lower but their corporate office raised them. I have a moderate 401K balance and I'm thinking about going DIY with that for a few years with just a few index funds for a real heads to heads comparison.

The returns are after I deduct FA fees. I go strictly by account balance on a certain date.

In 2013, my 3 fund taxable was 10.38% (can't remember AA)
401k was 21.95% (probably around 80/20 AA)
FA managed account was 12.73% (don't know AA)

In 2014 my 3 fund taxable (47/53 AA) was 5.12%
401k was 7.85% after major AA change
FA managed fund was 8.50% (don't know AA)

I really need to evaluate the AA's to accurately see how I'm doing compared with FA. Maybe compare my stock funds to FA's. Same with bond funds. It'll help to compare apples to apples as opposed to just overall account performance. You'll probably have to do the same thing to evaluate your DIY performance in order to get an accurate comparison




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[snowball]

2% one time fee

Does anyone know about Edward Jones Fund Co? The advisor there said they have a one time only 2% fee where they look at your funds twice a year. I wonder where the other fees or costs are hidden. If he says only pay 2% and never other charges could that be true? I want to self manage mine, my husband wants to do the 2% fee w/ Edward Jones. Edward Jones has no index funds but advisor said he could get me some. Where is the best place to invest your money if want to self manage. Is it Vanguard? Did not get Bogleheads book or the Millionaire teacher or any of other books, but hope to soon since I am pretty stock illiterate. Will use advise gotten here to invest and manage myself and from the books if I hurry and get a couple.
Charles Schwab Co says you can manage yourself for no cost at all. How can they say that when there really will be costs? I read about Edward Jones and Charles Schwab and could not find any exact or detailed information about fees, commissions etc.
Thank you again for your help

 

[audreyh1]

Only pay 2%? That's huge!

If you are living off of 4% of your portfolio, that's half your annual income! And you still have to pay all the taxes out of your half.

If you had a million dollars, do you think it would be right to hand someone $20,000 to look at you portfolio twice a year?

These guys are a ripoff - stay away!

It's not a good idea to pay an "advisor" high fees to invest in low cost index funds when you can invest directly yourself. And that 2% is usually still on top of the mutual fund fee itself. And they will probably keep pushing you towards more expensive investments.

Yes, Vanguard is a good place to start. You could use one of their target retirement funds, or invest directly in the underlying index funds yourself.
https://investor.vanguard.com/mutual-funds/target-retirement/#/

You don't need to know about stocks. You just need to learn about low cost mutual funds.

 

[MRG]

Does anyone know about Edward Jones Fund Co? The advisor there said they have a one time only 2% fee where they look at your funds twice a year. I wonder where the other fees or costs are hidden. If he says only pay 2% and never other charges could that be true? I want to self manage mine, my husband wants to do the 2% fee w/ Edward Jones. Edward Jones has no index funds but advisor said he could get me some. Where is the best place to invest your money if want to self manage. Is it Vanguard? Did not get Bogleheads book or the Millionaire teacher or any of other books, but hope to soon since I am pretty stock illiterate. Will use advise gotten here to invest and manage myself and from the books if I hurry and get a couple.
Charles Schwab Co says you can manage yourself for no cost at all. How can they say that when there really will be costs? I read about Edward Jones and Charles Schwab and could not find any exact or detailed information about fees, commissions etc.
Thank you again for your help

Know about them sure, they're in St. Louis.They pay for the Edward Jones Bowl, with your money. Run away, run far and fast. They don't want you to know about their fees, they have a dome to pay for.

Do yourself a favor tell them you moved.

Call up Vanguard, Fidelity or Schwab. Vanguard is probably the easiest.

 

[braumeister]

Did not get Bogleheads book or the Millionaire teacher or any of other books, but hope to soon

No kidding, that would be the best money you ever spent.
Paying a few bucks for a few books instead of giving 2% of your net worth to a company that might be helpful or might not? What a no-brainer!

Seriously, go to Amazon right now, buy a few of the recommended books (Millionaire Teacher would be my first recommendation) and spend a few days reading them. That's really all you have to do right now, and you'll be eternally glad you did.

 

[Mulligan]

No kidding, that would be the best money you ever spent.

Paying a few bucks for a few books instead of giving 2% of your net worth to a company that might be helpful or might not? What a no-brainer!



Seriously, go to Amazon right now, buy a few of the recommended books (Millionaire Teacher would be my first recommendation) and spend a few days reading them. That's really all you have to do right now, and you'll be eternally glad you did.

And maybe use the learned info to convince your wife, also! She may not be so eager to read anything, so come out swinging quickly with facts to support your case.


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[pb4uski]

Does anyone know about Edward Jones Fund Co? The advisor there said they have a one time only 2% fee where they look at your funds twice a year. I wonder where the other fees or costs are hidden. If he says only pay 2% and never other charges could that be true? I want to self manage mine, my husband wants to do the 2% fee w/ Edward Jones. Edward Jones has no index funds but advisor said he could get me some. Where is the best place to invest your money if want to self manage. Is it Vanguard? Did not get Bogleheads book or the Millionaire teacher or any of other books, but hope to soon since I am pretty stock illiterate. Will use advise gotten here to invest and manage myself and from the books if I hurry and get a couple.
Charles Schwab Co says you can manage yourself for no cost at all. How can they say that when there really will be costs? I read about Edward Jones and Charles Schwab and could not find any exact or detailed information about fees, commissions etc.
Thank you again for your help

2% is pretty steep... if your withdrawal rate is 3% that is 8 months worth of withdrawals for something that you can easily do yourself with a little reading. Or put another way, if your nestegg is $1m then that 2% fee is like writing a check for $20,000 to Edward Jones. You can have a lot of fun for $20k... a nice trip to Europe and beyond.

Vanguard's fees are well disclosed and are among the lowest in the industry. Also, they will do an analysis of your situation and make recommendations on what funds to buy. It will cost you $250 if I recall correctly, but if you are bringing a tidy sum to them they will do it for free. I suggest that you and your DH give them a call and talk to them... you'll be further ahead.

 

[2B]

If you search you'll find numerous horror stories about Edward Jones. Vanguard has no annual fees and their fund fees are the lowest in the industry. Edward Jones will stick you into expensive funds and try to sell you variable annuities.

 

[travelover]

If you search you'll find numerous horror stories about Edward Jones. Vanguard has no annual fees and their fund fees are the lowest in the industry. Edward Jones will stick you into expensive funds and try to sell you variable annuities.

Sure, but your local EJ rep is your friend and neighbor and knows the names of all your kids.

 

[pb4uski]

and will send you a birthday card. Surely all of that is worth 2%!

 

[poorcarver]

Not sure if you want to consider a midpath. Vanguard will do a managed portfolio sort of thing for 30 basis points (.3%) of the total invested paid annually. Still a fee but not 1 or 2%. So if you have one million, then you pay out $3,000.00. This might be enough hand holding for your SO and sure is less than $20,000.00.

There are minimums to be part of this "service" so you need to check it out. We got our annual free analysis and this was pitched.

 

[MRG]

I want to self manage mine, my husband wants to do the 2% fee w/ Edward Jones. Edward Jones has no index funds but advisor said he could get me some. Where is the best place to invest your money if want to self manage. Is it Vanguard? Did not get Bogleheads book or the Millionaire teacher or any of other books, but hope to soon since I am pretty stock illiterate. Will use advise gotten here to invest and manage myself and from the books if I hurry and get a couple.
Charles Schwab Co says you can manage yourself for no cost at all. How can they say that when there really will be costs? I read about Edward Jones and Charles Schwab and could not find any exact or detailed information about fees, commissions etc.
Thank you again for your help

I've never known Jones to do a 1 time only 2%, even that is a ripoff. You'd give away 2% of your money for someone to do a couple of hours of data entry.

They may take a flat 2% for a review, then put you in some nice funds with yearly 12B-1 fees, plus a higher fund fee, or a nice wrap account. Investing will seem hard and confusing with them. It won't be DIY. They may find some index funds to put you in but you will pay other fees.

Schwab is probably touting their free trades and low cost ETFs.

Don't do anything till you read at least read Millionaire Teacher! Then you'll start to understand why DIY investing in a low cost index fund(s) is easy!

Think about this; Vanguard, Fidelity, Schwab all run funds and ETFs. They have a way to make money. Jones is only selling you advice and products that make them money. They don't run funds or ETFs. Someone is paying for that dome and all their commercials. If you're not easily offended, Google "utube E.D. Jones commercial parody". What you'll find there is very close to reality.

Investing has changed alot in the internet age. Vanguard et al, have changed with the times. Jones is still doing business just like they did in 1980.

 

[phil70]

Snowball - My two cents. I've just in a discussion about this on another forum. If you feel that you do not know enough about investing to handle it on your own, you should consider an hourly fee adviser. It is a one time cost, they can help structure an asset allocation that makes sense for you, teach you some basics and then you only engage them when you need to after that. The books that others recommend are all fine, but it takes time to internalize all of that knowledge. In the meantime, you could be exposed in ways you do not know.

There are a lot of DIYers on this site. I am a DIYer myself, but for the first time ever this year I paid an HOURLY fee adviser to review our long term financial plans and my asset allocation. it cost $2,500 and I think it was worth it. She identified some gaps in our planning, some misallocations in our portfolio and helped identify some cheaper funds to replace some higher cost funds. All of this I could have done on my own, if I had been willing to spend the hours and hours it would have taken.

 

[travelover]

...... I paid an HOURLY fee adviser to review our long term financial plans and my asset allocation. it cost $2,500 and I think it was worth it. She identified some gaps in our planning, some misallocations in our portfolio and helped identify some cheaper funds to replace some higher cost funds. All of this I could have done on my own, if I had been willing to spend the hours and hours it would have taken.

I bet you could have figured it out in less than 25 hours, especially with free help from Bogleheads and here. Even I would work for $100 an hour.