Help me refine my message to my advisor

[LeeLee2021]

Hello all - I posted my hello/details here (wow, more than a year ago), and things have changed! My spouse and I have started what we're calling our "sabbatical" for at least a year while we figure out if we're really the big R. My severance ended in July, spouse quit their untenable job in October, and since then we've been feeling what it's like to not have a corporate teat.

We're now on ACA within our planned budget, and getting a subsidy in 2022. Our spending in 2021 is pretty much as planned, and we have contingencies in place for lumpy expenses.

My main question is around a plan that our long-term, trusted advisor is proposing to us next week (when they retires, we'll be DIY after that). We've talked in the past about how we don't want to: buy into any new 'products' with a >~.75% fee, to avoid single stock risks/we'd rather do ETFs, and how we've been learning more about a boglehead / 3 fund strategy. Instead, they sent over a fact sheet for "Natixis Risk-Efficient Portfolios". Sad trombone.

Long story short, their plan has fees that I'm unwilling to pay (2.8-2.4%?). But I need help with bullet points/questions to stay on target in next week's conversation, so wanted to get this smart group's minds involved first.

1. How do we navigate what he's proposing with a more lean approach?
2. Has anyone have an opinion on or bought anything from Nataxis? I see some corporate stuff online, and a lawsuit where they are accused of self dealing their funds against fiduciary interests - is that as bad as I'm thinking it sounds?
3. How do we navigate from what he's proposing to a more lean/set it and forget it approach?

Thanks to any thoughts and direction you can provide to help us out

 

[FlaGator]

Not being flippant, just thank him for the guidance over the years and that you’re taking over management of your portfolio.

If you’re already at a place like Schwab, you can then transition holdings as you see fit, managing tax impacts as it makes sense.

 

[target2019]

What is the relationship you now have with the adviser?

 

[OldShooter]

Not being flippant, just thank him for the guidance over the years and that you’re taking over management of your portfolio. ...

This.

Just from your post it is obvious that you're smart enough to DIY and you certainly don't need to give this guy a financial goodbye kiss by buying some junky funds from him.

There was a very funny post here a couple of years ago with the poster talking about his good friend the FA who would once in a while buy some beer and they would go fishing on the FA's boat. Apparently quite nice boat. When the poster pulled his money from the FA he never again got an invitation from his "friend" to go fishing. Terminating an FA is like terminating a lawn service. Do it when it makes sense for you without worrying about whether you are hurting the lawn service guy's feelings.

Maybe some reading for your sabbatical:

• "If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf (free 16 page download)
• "The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/ (This is Bill's first book; read it before reading his second one.)
• "The Bogleheads Guide to Investing" by Taylor Larimore et al https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365

and if you like those, then try: "Winning the Loser's Game" by Charles Ellis https://www.amazon.com/Winning-Losers-Game-Strategies-Successful-dp-1264258461/dp/1264258461 (latest edition, May 2021)

Congrats to you and DW on your retirement. Dive right in, the water's fine.

 

[MRG]

The advisor heard you and responded with his counter. I wouldn't waste my time trying to get them on track. You know where you want to end up, go there.

 

[OldShooter]

An additional thought: You don't need any "bullet points." This is not a contest. You are the customer.

If you're going to move your assets to another brokerage, all you'll need to do is to fill out that brokerage's transfer form. They will take care of it and you will not have to talk to this twit ever again. Even if you're not transferring the assets, it should be a simple matter to revoke the FA's access and trading authority -- again without talking to him.

I have an FA friend who says that departing clients rarely talk to him; they just fill out the transfer form and that's how he finds out.

 

[RobbieB]

That's the way I've always done it, you sign the transfer form and that's all folks!

 

[LeeLee2021]

Thanks for all the thoughtful responses. It's funny how I thought I was asking one question, but you all answered the question at the back of my mind instead. I don't think we're ready to dump him yet, but I'm trying to figure out our plan to get there . FA has done a great job getting two uninvolved investors ready to retire at 50ish, so we feel like we have some loyalty to work through before we move on.

I just checked out "The Bogleheads Guide to Investing" to be clearer in our long term plan and our message to him.

BTW, the fee relationship so far has been a very, very modest annual fee, and I'm sure some skin in previous products sold to us.

 

[aja8888]

Thanks for all the thoughtful responses. It's funny how I thought I was asking one question, but you all answered the question at the back of my mind instead. I don't think we're ready to dump him yet, but I'm trying to figure out our plan to get there . FA has done a great job getting two uninvolved investors ready to retire at 50ish, so we feel like we have some loyalty to work through before we move on.

I just checked out "The Bogleheads Guide to Investing" to be clearer in our long term plan and our message to him.

BTW, the fee relationship so far has been a very, very modest annual fee, and I'm sure some skin in previous products sold to us.

After you transfer your funds, send him a nice Christmas card with a "thanks" note inside.

 

[38Chevy454]

Just one question: if you plan to use low fee ETFs why do you need an FA to suck off .75-1.0 % or more in their fees?
Also one comment: with Boglehead or this forum for advice, you can do it yourself without any FA.

 

[OldShooter]

... I don't think we're ready to dump him yet, but I'm trying to figure out our plan to get there. ...

WADR, you owe this guy NOTHING. He has been paid along the way just like the lawn service guy. Now as things are nearing the end, he is trying to screw you. There is no plan that needs to be figured out. Just fill out the forms.

If you want to give him a financial kiss on the way out the door, send him a couple of expired gift cards to McDonald's.

Sorry to sound harsh, but any salesperson's goal is to be perceived as a friend. That perception creates the kind of unnecessary angst that you feel right now, which is often successful in keeping clients clinging.

 

[Bigdawg]

I don't think we're ready to dump him yet, but I'm trying to figure out our plan to get there

From now until the time you are "ready to dump him", what do you think is going to happen? Seriously? What are your expectations of that timeframe? Will he magically find you a 10X stock? Give you the winning lottery ticket #'s? Give you the winner in the 5th race at Belmont next weekend? My guess is you will come back to this thread and tell us "you should have done it sooner".

Good luck to you and congratulations.

Help me refine my message to my advisor--"You're fired!"

 

[Doingitwrong]

Thanks for all the thoughtful responses. It's funny how I thought I was asking one question, but you all answered the question at the back of my mind instead. I don't think we're ready to dump him yet, but I'm trying to figure out our plan to get there . FA has done a great job getting two uninvolved investors ready to retire at 50ish, so we feel like we have some loyalty to work through before we move on.

I just checked out "The Bogleheads Guide to Investing" to be clearer in our long term plan and our message to him.

BTW, the fee relationship so far has been a very, very modest annual fee, and I'm sure some skin in previous products sold to us.

You already paid him to get where you are. No balance due on the past.
If you’re ready to move on he’s not a concern to you.
He’ll replace you and be fine.

 

[travelover]

........... I don't think we're ready to dump him yet, but I'm trying to figure out our plan to get there .......

Just to reinforce what others have said, this guy is trying to rip you off. He is not your friend and you owe him nothing. Right now what you need to figure out is how to extricate yourself with minimal tax liability and other unnecessary costs associated with scraping this guy off the bottom of your shoe.

You can easily handle it from here. Worst case, hire an advisor by the hour to provide you direction then put it on autopilot with either a Target Year fund or a simple Coffeehouse funds portfolio.

 

[Souschef]

Slightly OT, I got a call from the MS (Morgan Stanley) branch manager telling me about reducing their clients. If I wanted to stay with them, I had to pay $175/year. The next day I filled out the forms and transferred all my holdings to Fido (Fidelity).
As everyone here has said, you do not need him anymore.

 

[RobbieB]

No problem, I'll remove myself right now!

 

[RobbieB]

With that, I'll add that I have 2 "guys", my equities guy that charges 1% and my bond guy that charges .4%.

But over 2%..., yeah, kinda steep.

 

[mystang52]

OP: you should be outraged. You told this supposed trusted adviser you don't want a product with >.75% fee. Yet he responds suggesting some product with 2.4% fee. He didn't just ignore your stipulation. He showed his true colors that he does not have your interest at heart; he's looking to get one last dollop of fees from you. After this attempt to rob you, he is not entitled to any courtesy or "loyalty" from you..

 

[Dash man]

OP: you should be outraged. You told this supposed trusted adviser you don't want a product with >.75% fee. Yet he responds suggesting some product with 2.4% fee. He didn't just ignore your stipulation. He showed his true colors that he does not have your interest at heart; he's looking to get one last dollop of fees from you. After this attempt to rob you, he is not entitled to any courtesy or "loyalty" from you..

^This!
He didn’t listen to your request. When any advisor, contractor, realtor or anyone I pay for services ignores a specific request, I move on to find someone who listens.

 

[RetiredAt49]

OP - join the club! I just moved our IRA from our wealth management company and planning to move our brokerage before the end of the year.

 

[RetiredHappy]

We went through that. Sent an email, and followed up with a FTF meeting with our FA that we were moving out of the relationship and why. We offered up a proposal as to how he could keep us, but on our terms. He could not meet our terms, and within a week, he was notified by the new firm for transfer of the accounts.

We paid around $300K in fees over a 13-year period, starting with 1% and later to .8%. Still too much. We are now DIY and happy. Nothing beats being in full control of our funds.

 

[travelover]

........We paid around $300K in fees over a 13-year period.......

Plus the earnings on that $300K

 

[RetiredHappy]

Plus the earnings on that $300K

We have done worse things so it is OK.

 

[DrRoy]

The FA is only interested in what's good for them. The message is: "You're fired."

 

[Aerides]

If you want a leaner, set and forget approach you can eventually take over and self-manage, tell him that. I basically did with our FA.

"Find me low-cost index funds like VTSAX, and get rid of all the crap with fees that has underperformed."

That ended up being stuff like IVV. And I went thru the line items to help id things I didn't like, which, to be fair, he'd put in years back in response to my then-risk-appetite. But it was this stepping-down exercise that really helped me say goodbye a couple of years later.

When we first set things up, I had no clue. But 5 years later, now I did. When I was in your position, I felt I wasn't ready to drive yet, but I was ready to set the GPS. That sounds like where the OP is to me.