Originally Posted by getoutearly
I did a quick search on the forum and couldn't find a quick and dirty answer as to the benefits of ETF's vs index funds, and people's specific experience with one over the other.
Still trying to forumate my plan for escaping from the FA...
It depends on what you're trying to do.
Vanguard has index funds whose expense ratios are far lower than ETFs. Their S&P500 fund has an ER that's a fraction of iShares' S&P600 Small-cap Value ETF (IJS).
So first pick your asset allocation (which I see you've been working on) and then decide whether it's better to go mutual fund or ETF. To refine that DCA discussion, I've seen articles suggesting you should DCA $10K-$25K in a Vanguard index fund and then move it all at once (one transaction) to an equivalent ETF... as long as the ETF ER is lower than the Vanguard ER.
I'm happier with ETFs because of the lower ER and the lack of management initiatives-- moving funds, messing with ERs, raising director's salaries, annual proxies, etc.
How hard is it to escape from the FA? Wouldn't you just set up an account with Vanguard or Fidelity and fill out their forms to transfer your assets in kind? They do the rest with the FA. You could give the FA a courtesy call to let them know what's coming their way but even that's not required.
Once the money's with the firm of your choice, you can fiddle to your heart's content without having to worry about the FA.