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Old 08-09-2007, 03:50 PM   #21
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I'd chime in with what others said and shoot for moving an account like this to VG or Fidelity. Either one should be willing to manage it for < 100 bps/year.

Bear in mind 1% of $1m is still $10k / year. It might pay to self-manage at some point, once you develop the knowledge and confidence to do so...
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Old 08-09-2007, 04:12 PM   #22
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There may be some confusion here about what fees are for what and what kind of advice/management is needed.

The OP started with reference to a brokerage fee which evidently is actually an asset management fee, distinct from commissions or trading costs in general (loads, spreads). There can also be account maintenance fees at a brokerage but not usually large like .28%/quarter. All of this refers to the process of actually managing the investments, such as choosing what intruments to buy/sell and when.

A different issue is financial planning which is at least the process of assessing risk profile and determining asset allocation but could extend to withdrawal strategies, etc. As an example Rick Ferri, as I understand, stresses that he does NOT do financial planning. He does asset management given a financial plan. So one must be clear what the fee paid is for.

Tax planning and tax management are another issue. Since tax planning requires input and analysis beyond simply the placement of investments, this is a separate subject and should cost additional money to advise.

Estate planning extends beyond all of this and while involving tax management also includes questions of how one wishes one's estate to be disposed and is properly an exercise for a qualified attorney. Tools used are wills/trusts/gifting, etc.

I doubt Vanguard is capable of addressing tax and estate planning, but they do apparently provide cookie cutter or perhaps better financial plans and asset management within certain confines for a very minimal charge.

I would suggest anyone looking for "financial advice" write up a clear list of what the subjects are upon which advice is sought and match the resources to the problem at hand.
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Old 08-10-2007, 06:09 AM   #23
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A85 looking back at the thread...

Let me make a slightly different suggestion.

In order to to really understand if the fees are reasonable or not, you need to first understand what you currently have, and your past history. (I agree with the consensus that you can save a heck of a lot by moving the money to other places.)

I'd start as first step in rather than trying to decipher the brokerage statements by yourself, which are often confusing even for those of us who have looked at lot, I'd call up your broker and set up long meeting.

Make it clear to the broker that having spent 150K+ in fees over the last 14 years, and facing the prospect of spending 15K+/year you want a comprehensive review of your account. ( I'd plan for several hours). Make sure he knows that if you aren't happy with his explanation the account will go away.

Tell him to pull annual summaries for the last 12 years and more detailed information for the last couple of years.
What you are trying determine is the following
1. What is the overall performance over the last 14 years. How did your account do vs market averages. What was the relative performance of your account in Bull and Bear Markets
2. Overall asset allocation of your account Stock/Bonds and other investment. How has the allocation changed over time and why.
3. Mix of mutual funds vs individual stocks and individual bonds

Next ask him for a detailed explanation of the fees associated with your account. Does it include trading costs for stocks and bonds? Are there any front-end or back-end 12b-1 with any mutual fund you are in. What is the expense ratio of the funds you currently own.

Finally, be blunt and ask him why you should not move the money to Vanguard and save $10K+ on fees and expenses per year what is their value added. Is there cheaper options regarding expenses available.

One final suggestion, If you are not very familiar with investing, consider taking along someone to the meeting who is. My first choice would your CPA/Tax guy, but if you another financial advisor that would be fine also, or even just a friend who is smart about investments. I am not sure if your a guy or girl, I think it is especially important to have a friend a long if you are a woman since some brokers have a bad habit of trying to BS woman, about this stuff.

I think will be easier for the board to give you comparative advice if we know your investment history, and current status better.
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Old 08-10-2007, 06:25 AM   #24
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( I'd plan for several hours).
Wow, who wants to sit through what would appear to be a confrontational interview for several hours and then possibly fire someone or get fired?

Perhaps, reading up on things for a few weeks, then trying to understand the statements, figuring out the asset allocation oneself, then running one's own benchmarks, then some one hour interviews ... is in order. Wait a minute - isn't that why one hires an advisor to begin with: so that one can avoid all that understanding?
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Old 08-10-2007, 06:47 AM   #25
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Well if I was a the broker with an account generating 15K/year in fees I'd happily spend a day (or get an assistant) making up a some nice charts show the performance of the account vs others. Of course I'd try and spin it a bit, but...

On the other hand if I was spending $15K a year I'd expect that level of service and would rather have a couple hour explaination than trying to figure out some complicated brokerage statements.

Hiring a hard to find "fee-only" financial advisor may very well be the best approach. On the other it is possible that the broker actually maybe one of those rare brokers that adds a lot of value. If he has been averaging 11% a year for 14 years without taking excess risk than why fire him or hire somebody else?
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