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Rolled my Roth today
Old 09-25-2023, 05:12 PM   #1
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Rolled my Roth today

I started investing with a FA about 25 years ago. He started us with a Roth IRA with a leading Mutual Fund Company using about 5 different funds. They took out large front end load on each contribution, about 5%. About 7 years ago when I ER'd I stopped contributing new money to the Roth. Then the FA switched us to a new Roth with Charles Schwabb that they manage under an AUM basis. It's baked in so deep I don't even know the annual charge. I've paid a lot of loads and annual fees.

I do know the Roth under management has lagged way behind the funds I manage myself with VG, mainly VTSAX. For example YTD VTSAX is up 17.99%. The Charles Schwabb Roth he has me in is up 9.06%. This is not just a one year event, its at least 5.

The Charles Schwabb setup that the FA manages consists of 4 Mutual Funds, 3 ETFs and 88 Individual Stocks. Seems to me that they want to make it look confusing. Trouble is this set up has never matched the S&P 500 in the years I've owned it.

I sold them all today and when the funds are available I'm going to put it all in VTSAX. I should point out that this is very long term money and I'll likely die with it. I'm 58. I'll tell my heirs to hang on to the same fund for the long run.

I feel better, should have done it years ago but I really thought it would perform better.
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Rolled my Roth today
Old 09-25-2023, 05:27 PM   #2
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Rolled my Roth today

Better late than never. Congrats!

ETA: Iím a big fan of VTSAX/VTI. Itís my biggest holding. Letís hope the next decade is as good as the last.
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Old 09-25-2023, 07:38 PM   #3
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Good luck. VTSAX is also my largest fund holding.
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Old 09-25-2023, 09:06 PM   #4
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Congrats! My parents invested in their 403(b) using a FA who 'managed' investmenets held in Oppenheimer. Front-end loaded funds, generally lackluster performance, and high AUM fees. I could never convince my mom to switch to VG, but finally convinced my dad at around age 85. Better late than never!
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Old 09-25-2023, 09:53 PM   #5
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Congratulations on getting rid of that percentage drag of AUM on your portfolio.

88 individual stocks. Good grief! Good riddance to that complication.
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Old 09-25-2023, 10:41 PM   #6
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A few years ago, I used a well known AUM Wealth Management Company to assist us in transitioning into retirement. They had me invested in 85-100 individual tickers. During the 2022 bear I fired them and then performed some great tax loss harvesting while converting most of those individual stocks into a few low-cost index funds (VOO, VTI, and QQQ).

That AUM company also lagged the S&P 500 as well as the total US Stock Market (VTI) by more than just their 1.25% AUM fee.
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Old 09-26-2023, 06:23 AM   #7
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Better late than never, a good move for your Roth growth in the future. VTSAX is also my largest holding.
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Old 09-26-2023, 09:34 AM   #8
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Originally Posted by RetiredAt49 View Post
A few years ago, I used a well known AUM Wealth Management Company to assist us in transitioning into retirement. They had me invested in 85-100 individual tickers. During the 2022 bear I fired them and then performed some great tax loss harvesting while converting most of those individual stocks into a few low-cost index funds (VOO, VTI, and QQQ).
Yes! Another success story.

Quote:
That AUM company also lagged the S&P 500 as well as the total US Stock Market (VTI) by more than just their 1.25% AUM fee.
Yes, it's tough to beat the indexes. Can be done, but difficult.
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Old 10-02-2023, 06:28 AM   #9
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Another "me too" story. When I took over my girlfriend's investments (at her request!) I saw that she had two accounts at Merrill Lynch. In the managed account where they took a fee, they had her in a few no-load mutual funds. In the account where they did not take a fee they had her in (I think about) 100 different load mutual funds. And they bought and sold the load funds like banshees every month. We couldn't get her money out of there fast enough.
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Old 10-02-2023, 06:58 AM   #10
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Quote:
Originally Posted by Stormy Kromer View Post
The Charles Schwabb setup that the FA manages consists of 4 Mutual Funds, 3 ETFs and 88 Individual Stocks. Seems to me that they want to make it look confusing. Trouble is this set up has never matched the S&P 500 in the years I've owned it.
Exactly. That’s what most retail brokers do, they sound like your buddy, then talk over your head and make your portfolio look like something you couldn’t manage yourself. When in fact most don’t outperform a simple three fund lazy portfolio especially after the extra fees.

On the bright side you figured it out, most people play along indefinitely.
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Old 10-02-2023, 07:45 AM   #11
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OP here.

The transfer is complete. Once the assets arrived at VG I had to sell each of them individually and put the money in the MM settlement account. That took me 4 hours to do our two accounts. Two days later the funds were ready to invest, that took me two minutes. Put it all in VTSAX for the long term, likely our estate. We went from about 100 different investments to one which has historically whooped our previous account over the past 10 years with small fraction of the internal expense. Plus, I like the simplicity since we'll likely die with these funds. The beneficiaries are set up on the accounts and we can forget about them.
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Old 10-02-2023, 07:49 AM   #12
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Originally Posted by sakowitzm View Post
Another "me too" story. When I took over my girlfriend's investments (at her request!) I saw that she had two accounts at Merrill Lynch. In the managed account where they took a fee, they had her in a few no-load mutual funds. In the account where they did not take a fee they had her in (I think about) 100 different load mutual funds. And they bought and sold the load funds like banshees every month. We couldn't get her money out of there fast enough.
20+ years ago when my wife started teaching the only 403b that wasn't an insurance annuity was with Merrill Lynch. They wanted to do the same to her. Fortunately even though I was fairly new to investing I had heard about "churning" and had her place the money in a MM account that I would move every few months into a no load Vanguard fund. They would often slow time the move and in one case even closed out the account without permission even though I always made sure to leave money in the ML MM account to prevent this. It was always a fight to make sure the money was moved to Vanguard.
Not a fan of ML.

Cheers!
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Old 10-02-2023, 09:24 AM   #13
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When I finally convinced DGF to retire 9 years ago when she turned 55 she had a portfolio of about $950K spread out in various taxable, tax deferred, Roth, 401k's, rollovers, ESPP, mutual fund direct accounts, you name it.

We met with her Fidelity Advisor who did a great job of consolidating all of her accounts within Fidelity so now she is down to only 4 accounts, down from almost 20. Much more manageable.

Then the downside hit when his investment plan included over 30 mutual funds split every way you could imagine for greater diversity. After we discussed it alone, DGF did not sign off on that part of the plan and we invested her money in essentially index funds and kept her 401k investments as they were.

Fast forward 9 years and after living solely off her investments for the entire period and in light of the recent market dip, DGF is down to only $1.95M. Different Fidelity FA's call her over the years but the calls and messages are ignored. She only contacts Fidelity when she needs a withdrawal from her IRA because her idiotic plan does not allow online withdrawals as all money must be taken equally from all investments in the 401k. Looks like we are finally going to just roll that over next year to stop the insanity.

The other issue we had was when we did the initial meeting with the FA, we were told she could withdraw from her 401k under rule of 55. So she retired at 55 only to be told that was not the case. Really caused 4.5 years of turmoil in the withdrawal plan we had set up which only got worse with ACA subsidy issues. She is so looking forward to getting out from under that yoke in Jan 2025.

Early in my investing career I had placed money with ML for about 4 years but seemed to just pay fees so I finally pulled it and opened s Schwab account. That's when I began my education. I'm not a highly sophisticated investor but I did retire 11.5 years ago at 58 without a pension.
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Old 10-02-2023, 11:01 PM   #14
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Originally Posted by Stormy Kromer View Post
OP here.

The transfer is complete. Once the assets arrived at VG I had to sell each of them individually and put the money in the MM settlement account. That took me 4 hours to do our two accounts. Two days later the funds were ready to invest, that took me two minutes. Put it all in VTSAX for the long term, likely our estate. We went from about 100 different investments to one which has historically whooped our previous account over the past 10 years with small fraction of the internal expense. Plus, I like the simplicity since we'll likely die with these funds. The beneficiaries are set up on the accounts and we can forget about them.

Well done!
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