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Old 05-14-2012, 10:35 AM   #21
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Originally Posted by packrat44 View Post
When I moved a major portion of our investments to Vanguard a few months ago I received their financial planning service at no out-of-pocket expense. For me, their financial planning service was worth exactly what it cost me. Others may find more value.
I tend to agree packrat, but for the uninitiated or those new to investing, I think their service is useful and certainly better than nothing.

I expected a more sophisticated offering. As an example, I have some significant one-time cash flows in my plan in the next 10 years for DD's possible wedding and DS's possible college education. VG could not simply include those one-timers on top of my normal living expenses. The workaround was to reduce the nestegg at time zero for the pv of those expenses: crude but effective.
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Old 05-14-2012, 10:40 AM   #22
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Originally Posted by Nords View Post
I agree with you that investing a larger amount of money takes more hard work and activity.

I'm skeptical that the financial manager actually does any additional work to invest $2M than they do to invest $1M.

But I'm pretty sure they'll still send out an invoice, whether or not they can sleep comfortably at night.
Beyond a certain point investing a larger amount of money takes more hard work and activity is probably true, but IMO the point is way north of $1 or $2 million. At those levels you are most likely just buying more of the same tickers.

IIRC asset management fees are commonly on a sliding scale and decline with more AUM. That is certainly true for mutual fund advisory fees.
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Old 05-19-2012, 05:39 AM   #23
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Hi...Welcome. (Look and me welcoming someone. )

Below is a post I had made showing our costs of the funds our adviser had us in. What this does NOT SHOW (Forgot to add it and can not edit it now) is that we ALSO were being charged .45% of the current $1.5m portfolio for management fees and $700 a year to talk with our adviser. That .45% is a far cry from what you are paying and together added another $7,450 a year on top of all the fund charges we were already paying. I guess my point is that you need to consider the overall cost and not just the management fee.

Thanks to this site and the fine member here, our eyes surely have been opened and we are on the road to recovery. Not sure this will help at all...but here it is...

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Old 05-19-2012, 02:56 PM   #24
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Originally Posted by Kickback View Post
Michaelb. Thanks. Have always managed my own, but getting a little gun-shy frankly with ER around the corner. Just thought i would ask the opinion of those who are living it. Is the 1% fee to manage the funds worth it?
My view is that it's a very different skill set to build a portfolio for 60 years with income then it is to live on it for 30 years with very little income. 1% should not be a line in the sand for a fee measurement. Bonds should be purchase directly. Fees there amortized over the life of a bond should not exceed .05 basis point annually. Managed equities will cost up to 2% or less depending on portfolio size. Annuities will have a 0 charge. The charge comes if you leave prematurely like C class mutual fund. The same goes for non - traded REITS. There may be a number of aspects within a well diversified portfolio each with separate charges. If your a do it your selfer then E- trade at $6 a trade is the only way to go. There is a science to investment and a seasoned professional costs $$. Good thing no cheap, cheap thing no good.
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