I'm taking over my IRA management

[stephenson]

Skipro,

I am appalled at what Fidelity did.

I would call them on this .... don't let it slide ... I believe what they did was at least unfair, maybe unethical ... perhaps even counter to norms.

[skipro33]

Quote:

Originally Posted by RunningBum If you hadn't moved your account over, would you have sold all your holdings and wait or average it back in? If not, why wouldn't you just reinvest it all now?

Well, no. Most likely I would have been satisfied with my investments outside the managed block of funds I would have selected on my own. It was only managed for 18 months before I pulled the plug on them and I had it in a self managed 60/40 split. I only went to the managed fund in order to be able to forget about investing and have more play time. Less worry so to speak, pay someone to worry for me. But they dropped that ball big time. I think they did a bad job assessing my risk; both me personally and my entire net worth in relation to this one IRA. I think the manager treated me as some dumb yokel who he could spend 5 minutes with, sign up to a vanilla 60/40 account that a computer model automatically did the buy/sell to keep it balanced. I don't think a single real live human looked at what my IRA was invested in and the manager I spoke with was as surprised as I was. Here's something he let slip; he told me he's backed up with at least a week's worth of phone calls of nervous investors right now who also have managed funds. I told him it's no surprise to me, if others are able to watch the evening news, compare, right from their own Fidelity logon page to unmanaged 60/40 funds, that they too would be confused as to what the hell is going on.

His explaination was smoke and mirrors, telling me 60/40 depends a lot on domestic vs international, et al, blah blah blah. Sure it does, but to the tune of a 5% difference between the blend they managed my IRA at and every other blended fund they offer themselves? I had him sweating. After an hour on Friday and another hour yesterday, Tuesday, on the phone with me, he said he had to move on to other calls. I have since called their 800 number several times to figure out how to utilize their website with my account. They are helpful on the phone. I did make one mistake; I told the fella I wanted to authorize my account with my wife's so we each could manage the others. He immediately blocked my wife's password as it was not documented that I should have it and he now knew I did. Now I gotta get DW to call in and get her password reset and authorize me to log in under her password to manage her IRA for her. (We are old school; I take care of the money, she cooks and cleans. Ha!)

[skipro33]

Quote:

Originally Posted by Another Reader The graphs are almost always after expenses.

I assumed that at first, but after being burned, I decided to call their 800 # and ask. The guy who answered my call stepped through to the exact same page I was on and he confirmed; the performance graph does not include the expenses being deducted each year. I asked him the same question in 3 or 4 different ways to be sure we were understanding each other. I finally asked him how I could compare funds performance if I couldn't isolate fees and expenses from the mix. He told me about a website, FINRA.org, that would outline for me. It didn't. Or at least I couldn't make it show me a fund's performance over time with the expenses factored into it.

So I looked for a drawdown calculator. Most folks here take their draws as a percentage, such as a 4% draw, from their accounts, not a fixed dollar amount. But the only drawdown calculators I could find are for fixed dollar amounts of draw, not percentages of the account balance. Anyone have a link to one? Even FireCalc is based on a fixed dollar amount of draw and not a percentage. I don't understand how anyone can know their account is 100% funded if they draw on a percentage and not a fixed amount if they are trusting FireCalc to inform them of their risk to retire at any given point.

[gwraigty]

Quote:

Originally Posted by skipro33 I did make one mistake; I told the fella I wanted to authorize my account with my wife's so we each could manage the others. He immediately blocked my wife's password as it was not documented that I should have it and he now knew I did. Now I gotta get DW to call in and get her password reset and authorize me to log in under her password to manage her IRA for her. (We are old school; I take care of the money, she cooks and cleans. Ha!)

We are somewhat old school, except I take care of the money and cook and clean. Fidelity has POA forms that you can fill out which will authorize you to view and transact on her IRA with your log in and vice versa.

[skipro33]

Quote:

Originally Posted by flintnational +1 Generally when you move funds, they should be invested per your prior AA. Moving funds should not trigger an "all at once or dollar cost decision".

I agree. But pulling the plug on a managed account doesn't allow for incremental movement. It's a burn one and phoenix into a new account deal.

My AA is being reanalyzed as I now have a better understanding why I can. When I was working, I had no clue how much of this account I might need. Now retired 6 years, I see it's a very comfortable buffer for unseen disaster or medical emergencies. If not used for that, then a heck of a time when I have the balls to splurge on ourselves.

[skipro33]

Quote:

Originally Posted by gwraigty We are somewhat old school, except I take care of the money and cook and clean. Fidelity has POA forms that you can fill out which will authorize you to view and transact on her IRA with your log in and vice versa.

I know that now. Ha! But now we have to drive down to their office to sign forms.

[skipro33]

Quote:

Originally Posted by stephenson Skipro, I am appalled at what Fidelity did. I would call them on this .... don't let it slide ... I believe what they did was at least unfair, maybe unethical ... perhaps even counter to norms.

I am and I did.
An hour on the phone to the manager at my local branch on Friday and another hour yesterday. He knows my mind and I was respectful enough to give him the chance to show me the error of my understanding. He failed. Either because I'm just not intelligent enough to comprehend his explanation, or he was blowing smoke.

I 'm considering moving out of Fidelity. We have an independent investment firm; Hansen McClain Advisors. They even host a talk show on investing every Saturday on the local news radio channel here in Sacramento; KFBK. You can listen to them here;
https://www.hansonmcclain.com/radio/

I met with them prior to my retirement as I was with Great West at the time and they didn't have a local office. But before I retired, GW went away and my employer moved my accounts to Fidelity.

I consider moving because I don't think Fidelity deserves to hold my funds after this and especially without an explanation that I can even somewhat understand.

[Dtail]

Quote:

Originally Posted by skipro33 I assumed that at first, but after being burned, I decided to call their 800 # and ask. The guy who answered my call stepped through to the exact same page I was on and he confirmed; the performance graph does not include the expenses being deducted each year. I asked him the same question in 3 or 4 different ways to be sure we were understanding each other. I finally asked him how I could compare funds performance if I couldn't isolate fees and expenses from the mix. He told me about a website, FINRA.org, that would outline for me. It didn't. Or at least I couldn't make it show me a fund's performance over time with the expenses factored into it. So I looked for a drawdown calculator. Most folks here take their draws as a percentage, such as a 4% draw, from their accounts, not a fixed dollar amount. But the only drawdown calculators I could find are for fixed dollar amounts of draw, not percentages of the account balance. Anyone have a link to one? Even FireCalc is based on a fixed dollar amount of draw and not a percentage. I don't understand how anyone can know their account is 100% funded if they draw on a percentage and not a fixed amount if they are trusting FireCalc to inform them of their risk to retire at any given point.

Bolded - Effectively if you choose "% of remaining portfolio" in Firecalc, you are using a percentage drawdown concept.
Even though you choose the expense input on the first page of let's say 40,000 for a 1mm portfolio. Thus you are effectively choosing a starting % of 4%. Then using the above choice I stated, Firecalc is calculating your results based on using 4% of the portfolio each year using the historical market results.
One last thing you need to choose is how much of each year's withdrawal (stated in % terms) you wish to cover in every subsequent year, thus effectively putting in a spending floor.

[Rianne]

VG charges .3%. That's $4500/yr on 1.5M. We will not touch that until 2023. We haven't pulled the plug yet, but are seriously considering. Looking back at 2008, if we had a VG MM, he would have put us in stock index funds long before we did ourselves, simply due to fear. We'd have double what we have now.

I'd appreciate feedback on hiring VG, is the fee worth it?

[JeKa]

And if Fidelity doesn't have the low cost funds you like, check out Vanguard. My expense ratio is 0.10 percent.

[Oakster]

Quote:

Originally Posted by HNL Bill Since you're 62, and have roughly 8 years until your RMDs (~9 until your wife's), AND you don't need to touch your investments for your annual spend, I think it's entirely reasonable to do what you're suggesting! Why pay the extra percent for likely no gain? With your investment horizon, emergency fund, and lack of need to tap the funds anytime within the next 8 years, I'd go a bit less conservative (70/30, 80/20, or even 90/10), as long as you don't mind the bumpy ride! Good luck!

Exactly, I would go less conservative myself and let it grow, if you don't need it. Make sure to keep enough in cd's bonds or money markets to cover about 3 years of living expenses. I like the idea of a cd ladder for that. Then, you can afford to let it ride if the market is down a bit.

[Tracer]

Fidelity has managed my portfolio for 11 years. I have 2 accounts. One IRA and one non-IRA. The IRA is in a slightly more aggressive portfolio than the non-IRA. I've averaged about 7% and 5.5% respectively after fees. These portfolios are designed for the long term, 5 years and beyond.

[jasg]

Quote:

Originally Posted by skipro33 Most folks here take their draws as a percentage, such as a 4% draw, from their accounts, not a fixed dollar amount.

A 4% withdrawal is a common approach (for reference, first year RMD is 3.65%).

I dropped my FA after I realized that his 1% fee was a big piece of an annual withdrawal (even more considering fund fees). If I am living on $40k from a $1M portfolio, why pay $10k for management?

I went with a 3-fund Vanguard portfolio, sleep well and pay fees of 0.07%.

[jazz4cash]

I’ve had great experiences self managing at Fido, but given OPs experience I would be heading to VG or Schwab. I still think the performance charts are net of expenses and the Fido rep’s answer was wrong. This reinforces my opinion that using a managed account is a crap shoot. Plus you have to monitor the account like a hawk. If a manager is choosing individual securities I can see some value and work product but not using a bunch of funds. Good luck with your transition, OP.

[Luck_Club]

Quote:

Originally Posted by Tracer Fidelity has managed my portfolio for 11 years. I have 2 accounts. One IRA and one non-IRA. The IRA is in a slightly more aggressive portfolio than the non-IRA. I've averaged about 7% and 5.5% respectively after fees. These portfolios are designed for the long term, 5 years and beyond.

when did they enter the market with their management?

Did they dump it all in at one time?
Did they unwind old positions to get you to a proper asset allocation?

If you were in all cash at this point in the cycle, how long would you take to reach full allocated asset balance?

[skipro33]

I've decided to go in 100% with Dow Index, S&P500 index and a couple Large Cap equity funds. Buying in 10% of my (now) cash assets tonight. Near as I can tell, I dodged about 4.5% of market drop since cashing out last Friday. I think I'll continue to buy in as (if) the market continues to drop.



Something I forgot about income; Not only do I have my pension and starting this month, my SS, but in 4 years DW will be taking her SS at the tune of around $1,400 a month. To recap; been doing fine on my pension for 6 years, getting a 'raise' w/SS starting this month, DW's SS in 4 more years, then RMD 4 years after that. With that income being pretty solid, I'm not fearful of where the market will be in 8-10 years.

[jazz4cash]

So you’re staying at Fido? I did listen to a podcast. Very entertaining and I may subscribe to fill the void left by Bob Brinker going away, but not don’t think I’d hire their firm.

[dixter]

@skipro33 - You probably won't like my answer but at this time this is what I would suggest.... for now, just get all of your money out of investments... and then look for a 1 yr CD that you can get at Fidelity and make sure it insures all of your funds.... most likely will need to purchase several... Why? Too many bad signs right now... the FED is slowly raising interest rates, the FED has stopped the easing scheme and that indicated that the World Banks are no longer purchasing stocks and bonds to prop the markets up. The rest of the world is getting out of US obligations as they say they are still too expensive.. that indicates the interest rates are still too low and US obligations are still at prime... the rest of the world is at Par or below Par... You are now at a time to sit back for a while and watch... you won't get rich off of my recommendation but you won't go broke either... stay on the side lines for a year and see if you think this was good advice or not... you are young enough and you say you have the funds from pension/SS to survive... so.. take a deep breath.. relax and stay in cash for awhile...

[travelover]

Quote:

Originally Posted by dixter @skipro33 - You probably won't like my answer but at this time this is what I would suggest.... for now, just get all of your money out of investments... and then look for a 1 yr CD that you can get at Fidelity and make sure it insures all of your funds.... most likely will need to purchase several... Why? Too many bad signs right now... the FED is slowly raising interest rates, the FED has stopped the easing scheme and that indicated that the World Banks are no longer purchasing stocks and bonds to prop the markets up. The rest of the world is getting out of US obligations as they say they are still too expensive.. that indicates the interest rates are still too low and US obligations are still at prime... the rest of the world is at Par or below Par... You are now at a time to sit back for a while and watch... you won't get rich off of my recommendation but you won't go broke either... stay on the side lines for a year and see if you think this was good advice or not... you are young enough and you say you have the funds from pension/SS to survive... so.. take a deep breath.. relax and stay in cash for awhile...

Do you seriously think you have insight that others do not? People who's whole livelihoods hinge on keeping track of every nuance, influence and event that moves markets?

[skipro33]

For now I am staying with Fidelity. I doubt they are making much money off me with my investment choices. I'll review after the first of the year when things settle down.