Originally Posted by aida2003
PS. What does "top asset mngmt team" mean? LOL; charging top fees in the industry or minimum fees like DFA hopefully that leave more dough for you.
This above quote and the variable annuity asset made me wonder. The bottom line of everything below is make sure you really understand the fees that you are paying to your advisers.
*WARNING* the following may only apply to my very negative experience. Your mileage may vary. Past performance is no guarantee of future results. Removing this sticker voids your warranty. *END DISCLAIMER*
The biggest financial mistake I ever made was allowing a CFP to put what eventually became 7% of my assets into a variable universal life insurance policy. I surrendered the policy and fired him about 10 years ago. I owned the policy for 12 years. Not sure this is the same thing you have, it just reminded me of it.
The problem in my case was the outrageous hidden fees. It was very hard to determine these from the statements we were given:
- special fund asset class with higher fees
- overpriced term life insurance policy
- direct fee to the CFP's firm every month as we added money
I could have bought the exact same funds cheaper myself, or could have bought a much cheaper S&P 500 fund which out performed these funds in both a very good and a very bad market. Fund family name was Mainstay.
I could have bought the exact same term life policy from the same company, NY Life, for less. Or I could have shopped a little and gotten and even better deal.
After 12 years this account was ~$100 underwater. I was able to surrender with no negative tax consequence. I was very embarrassed that I had allowed this situation to continue unrecognized as long as I had.
I managed the rest of my net worth myself, up to that point. Today it's all me. Every other thing I did out performed this variable universal life insurance policy. Most dramatically so. Even the change invested in my couch cushions did better than this.
I had just reached the point were the amount of money was starting to out pace the fees and was starting to earn back a decade of loss. Loss due to fees exceeding earnings. Your invested amount is high enough that you would be past that inflection point. At least when applied to what my situation was. But it's still a large boat anchor to be dragging along as you sail forward.
If I had invested that money in my Vanguard S&P 500 fund each month and directly purchased the term life policy from NY Life, I would have been ~$100,000 wealthier in 2002.