I am 54 & hoping to retire at 55, questions about Fidelity

[murphearlyretirement]

One of my retiremnt accounts is a PROFESSIONALLY MANAGED IRA with Fidelity worth around $400,000. I am considering pulling the plug on this Managed IRA becuase of the fees, last year they were $4000. My research leads me to believe the IRA would probably do just as well if I put it in a low cost index fund and left it alone. Also, I have three mutual funds seperate from Fidelity that my Fidelity financial advisor suggested I sell and let Fidelity manage. She said if I do it by April 30th there is a 40% discount on fees. I am a little suspicious of this offer, is she getting commission on this? Any thoughts about either of my concerns would be greatly apreciated.

Thanks,

Tim

 

[Sunset]

I have done this for 2 relatives, they are old and were getting soaked for fees.
It's simple to open a new brokerage account (example Vanguard) and have the new account transfer "IN KIND" everything.
Of course IRA -> IRA, ROTH -> ROTH, and regular taxable -> regular taxable.

Imagine if you don't do it, in 10 year you will have paid them $40,000 in fees.

I'm thinking these fees are the extra fees taken probably each quarter, and not counting the fund fees which are present everywhere but never seen in dollar amounts.

 

[travelover]

Just move it to a regular account. Fidelity has some very low, even zero % fee funds. If you know what asset allocation you want, we can help you choose the funds.

 

[njhowie]

What kind of returns has the Fidelity advisor been generating for you after fees? Better than the indexes? Ask why you should continue using her when Fidelity now offers the zero fee funds?

 

[DrRoy]

I like Fido, but will not pay anyone a FA fee.

 

[JoeWras]

. My research leads me to believe the IRA would probably do just as well if I put it in a low cost index fund and left it alone.

Welcome!

What you say above, you will find affirmed thousands of times on this site in thousands of threads. Many of us (not all, and that's OK) are doing just that.

I really don't like what I'm hearing about a 40% discount on fees. How about this? Just don't use their FA, implement the strategy you describe above, and then you have 100% discount on extra fees. (Of course, the funds themselves all have fees.)

FIDO (without the FA) is absolutely fine, so I'm not saying you should switch to Vanguard, but consider them too. If you want active management, instead of an FA, you can use a fund like Vanguard Wellesley or Wellington. Plenty of threads about that too.

 

[Dtail]

Just move it to a regular account. Fidelity has some very low, even zero % fee funds. If you know what asset allocation you want, we can help you choose the funds.

+1
Many Fidelity users on this site who pay zero in FA fees and close to zero or zero in fund fees.
If your total funds are >1mm with Fidelity if you move the other accounts, you can qualify for Private Client status and effectively still receive general advice from them for zero FA fees.

 

[scrabbler1]

+1
Many Fidelity users on this site who pay zero in FA fees and close to zero or zero in fund fees.
If your total funds are >1mm with Fidelity if you move the other accounts, you can qualify for Private Client status and effectively still receive general advice from them for zero FA fees.

You may not even need $1M to qualify for Private Client status. I have had an Account Executive with Fido since 2007 and I was nowhere near $1M. Same for my (snake-bit friend who was in 6-figures but not near $1M.

I also had another AE try to poach me from my existing one and take control of my portfolio for the 1% fee. "No thanks!" I replied, and complained to his boss, the office manager.

 

[OldShooter]

... I am a little suspicious of this offer, is she getting commission on this? ...

Of course. She probably gets paid, at least partially, based on the assets she manages. She also probably gets paid a spiff for bringing in assets. Nothing nefarious about this, IMO. Fido is motivating her to do what is in the company's best interests.

Re running your own money, of course! The likelihood that any FA can beat a broad index over a long period of time is very close to zero. We are pretty gung-ho on the broad index concept and basically hold VTWSX.

An FA must necessarily hold a number of stocks and/or funds just to make the client believe that investing is complicated. Holding one or two broad funds and never making a trade is not a strategy for retaining clients.

 

[murphearlyretirement]

Thank you all, in the short turn I am going to cancel the professionally managed IRA. At that point of cancellation what happens to the fund allocation? does is just stay where it was the day of cancellation? This is what I gained on my IRA in 2018: -7.99 How did INDEX FUNDS do on average?

My historical return as posted on my Fidelity account.

Calendar Year Your Account
2018 -7.99%
2017 +15.54%
2016 +5.80%
2015 -1.45%
2014 +4.14%
2013 +18.32%
2012 +12.53%
2011 -4.46%

 

[pb4uski]

What is your asset allocation (AA)?

If 100% stocks, then VTSAX is a good benchmark:

2018..... -5.17%
2017..... 21.17%
2016..... 12.66%
2015....... 0.39%
2014..... 12.56%
2013..... 33.52% that should be enough to compare

 

[murphearlyretirement]

About your strategy: Growth
Domestic Stock 49% Foreign Stock21% Bonds25% Short Term5%

 

[murphearlyretirement]

Is there a Fidelity Fund similar to VTSAX? that anyone would recommend? I would like to leave my money with Fidelity.

 

[JoeWras]

is there a fidelity fund similar to vtsax? That anyone would recommend? I would like to leave my money with fidelity.

fskax

 

[pb4uski]

Thank you all, in the short turn I am going to cancel the professionally managed IRA. At that point of cancellation what happens to the fund allocation? does is just stay where it was the day of cancellation? This is what I gained on my IRA in 2018: -7.99 How did INDEX FUNDS do on average?

My historical return as posted on my Fidelity account.

Calendar Year Your Account
2018 -7.99%
2017 +15.54%
2016 +5.80%
2015 -1.45%
2014 +4.14%
2013 +18.32%
2012 +12.53%
2011 -4.46%

What is your asset allocation (AA)? ....

About your strategy: Growth
Domestic Stock 49% Foreign Stock21% Bonds25% Short Term5%

Ok, using that 49%/21%/25%/5% AA and Fidelity index funds:

2018 -5.54%.... 2.45% better
2017 +18.81%.... 3.27% better
2016 +8.03%.... 2.23% better
2015 -0.01%.... 1.44% better
2014 +6.43%.... 2.29% better
2013 +20.77%.... 2.46% better
2012 +13.73%.... 1.20% better

https://www.portfoliovisualizer.com...&allocation4_1=5&total1=100&total2=0&total3=0

Mind you, I'm not very familiar with Fidelity funds so I just picked them based on names.

Ticker	Name	Allocation
FSKAX	Fidelity Total Market Index	49.00%
FSPSX	Fidelity International Index	21.00%
FTBFX	Fidelity Total Bond Fund	25.00%
FSHBX	Fidelity Short-Term Bond	5.00%

 

[JoeWras]

Tim, look at that! PB4 did the work for free. Isn't this a great site?

 

[GoBears]

Mind you, I'm not very familiar with Fidelity funds so I just picked them based on names.

Ticker	Name	Allocation
FSKAX	Fidelity Total Market Index	49.00%
FSPSX	Fidelity International Index	21.00%
FTBFX	Fidelity Total Bond Fund	25.00%
FSHBX	Fidelity Short-Term Bond	5.00%

FYI —

FTIPX is the Fidelity Total International Stock Index Fund (premium class), which includes emerging markets. The International Index Fund does not. FZILX is Fidelity Zero SM International Index Fund charges no annual expenses and includes emerging markets, but tracks a proprietary Fidelity index.

 

[pb4uski]

Tim, look at that! PB4 did the work for free. Isn't this a great site?

I don't get paid? When did that start? I must have missed the memo!

 

[pb4uski]

FYI —

FTIPX is the Fidelity Total International Stock Index Fund (premium class), which includes emerging markets. The International Index Fund does not. FZILX is Fidelity Zero SM International Index Fund charges no annual expenses and includes emerging markets, but tracks a proprietary Fidelity index.

Interesting but since that fund has such a short history (established June 2016) is it not useful to the analysis looking at historical performance.

 

[Dtail]

I don't get paid? When did that start? I must have missed the memo!

Trying to keep your taxable income lower for your own benefit.

 

[GoBears]

Interesting but since that fund has such a short history (established June 2016) is it not useful to the analysis looking at historical performance.

Yes, but it is what Fidelity offers as a true international total index mutual fund. An alternative would be the commission-free ETF from iShares, IXUS.

 

[VanWinkle]

Nice work pb4, it appears that the managed account lost on this one..... imagine that!!

VW

 

[murphearlyretirement]

Monday I am going into Fidelity to meet with my financial advisor and end my Fidelity Portfolio Advisory Service. I appreciate all of the advise I have received on this thread, I now have the courage to do this. My managed IRA's current positions are listed below. Once I cancel the ADVISORY SERVICE can I leave the allocations as they are or do I have to move it?
FDRXX**
AMFAX
AQMNX
EGRAX
FAUDX
FCSAX
FERGX
FILFX
FIONX
FLCPX
FPCIX
FPIOX
FRGXX
FSAMX
FSCFX
FSGFX
FVSAX
PCRI

 

[OldShooter]

Wow. 18 funds! I guess that they want you to think investing is complicated.

 

[scrabbler1]

Unless you have a gazillion dollars to invest, I can't see why you would need that many funds. I can't see needing more than 3-6 funds. Way too much to keep track of.