Here's what my 1% fee Fidelity Portfolio Advisors have me in

[saluki9]

OK, but just because the average person you have observed *has* done poorly, there is no reason that they *need* to do poorly.

Especially if they come to this forum for some advice, resources, and perspective. It's easy to do it wrong, but I don't think it is hard to do it right. You just need to get the basics.

-ERD50

PS - That is just a general comment, not directed at the OP in any way.

I think you're overestimating the power of an internet forum

Lots of people know the right thing to do, they just don't have the will or the stomach to do it.

Why do people hire personal trainers? It's not because they need somebody to show them what to do every time, they need the reinforcement and the oversight. In many ways financial advice is the same.

 

[FinanceDude]

Of course, *if* one were to split a $800,000 portfolio across 42 funds, that would be about $20,000 in each fund, getting into that 5% range.
-ERD50

Not at all. The OP is in a "wrap account" where he is paying the ER of the fund AND a 1% management fee "wrapped around" the funds. So, the "REAL" ER is probably 2-2.5% or so.

You are talking about avoiding brekapoints, which is another discussion entirely.......

 

[FinanceDude]

Great. Or, actually, astoundingly horrible!

But hey, convince an extra pensioner to put her CD in the fund and you've got your boat payment for the month! If you smile enough as you promise the sky, the old lady is none the wiser, and everyone else is happy!

a)I know nothing of the situation of how your friend invested, what was discussed, etc.

b)You can have all the spite you want for whom did this to your friend.

c)One of the things I do often on here is correct misinformation.

d)Who are you referring to when you say "YOU" in the last paragraph above?

 

[ERD50]

Uhh not quite

The aggregate purchases are considered together for the load.

OK, I didn't realize they aggregate them. Thanks for the correction. - ERD50

 

[Grep]

b)You can have all the spite you want for whom did this to your friend.

d)Who are you referring to when you say "YOU" in the last paragraph above?

b) I certainly do feel that selling a fund with an 8% front-end sales load (or 5.75%) is fully worthy of scorn.

d) Everyone all the way up the food chain who profits from such sales.

 

[haha]

b) I certainly do feel that selling a fund with an 8% front-end sales load (or 5.75%) is fully worthy of scorn.

d) Everyone all the way up the food chain who profits from such sales.

So I guess you don't belive that people who choose one product/service over another should be allowed that freedom. Commendable ethical postion, should go over well at campus parties. But where does one draw the line? One of those cute college girls could get a haircut for $18, but she chooses to pay $100 because she thinks it makes her look better, or she likes the way the hair-guy flirts with her and pampers her.

I could have bought a Big Mac for dinner, but instead I saw a Chili's ad and paid way more. Somebody stole some money from me-the whole scum-sucking up-line.

Not many people left who don't know about no-load funds. So if someone pays a load they are getting something out of it. Maybe the salesman sleeps with Granny?

Ha

 

[Grep]

Maybe the salesman sleeps with Granny?

Ha

Ha, that post was in remarkably bad taste, besides being utterly orthogonal to my message.

If "Granny" knows full well of her options, and is offered full disclosure and achieves full understanding, and knowingly and willfully chooses the fund with 5-8% front-end loads because it is genuinely best for her, then more power to her.

But my point is that these absurd sales-loads exist primarily to entice salesmen to push the funds regardless of their true merits, or even in spite of their disadvantages. The enticements may be so great that salesmen will push or exceed the limits of what defines full disclosure. Secondarily, because of the absurd fees, these funds are unlikely to be remotely optimal for nearly any investor. I believe you know this.

 

[haha]

Ha, that post was in remarkably bad taste,

Remarkable for some; comun y corriente para mi.

ha

 

[haha]

Good hit, Grep.

But anyway Darling, I grant you that we don't agree on much of anything. I would consider agreement with you to be a danger signal.

You didn't address my point about free actions in a free market. A salesman is not required to find the optimal solution for someone, just something that is not illegally presented. Some funds with long term, highly successful records levy a load. And, if a load keeps an investor from chasing performance it is not necessarily bad.

 

[REWahoo]

Ha & Grep, if you'd like to continue this little dust-up I think Mudwallow.com is offering free registration today only. Even if you decide not to take advantage of their generous free offer, please take your spat offline.

 

[Grep]

Ha, I think I made my point about informed consent, potential conflicts of interest, and suitability clearly enough for almost anyone. Politics and philosophy would be for some other thread, some other day, maybe.

Have a nice day.

(Edit: Cross-posted with REWahoos. Sorry.)

 

[haha]

Ha & Grep, if you'd like to continue this little dust-up I think Mudwallow.com is offering free registration today only. Even if you decide not to take advantage of their generous free offer, please take your spat offline.

No problem Cap'n!

 

[FinanceDude]

But my point is that these absurd sales-loads exist primarily to entice salesmen to push the funds regardless of their true merits, or even in spite of their disadvantages. The enticements may be so great that salesmen will push or exceed the limits of what defines full disclosure. Secondarily, because of the absurd fees, these funds are unlikely to be remotely optimal for nearly any investor. I believe you know this.

No, they don't. Obviously you know little of the industry. However, I doubt a logical and non-emotional discussion would appeal to you, so I will bow out, and allow you to continue spouting misinformation based upon ONE situation with a family friend. In your mind, those of us experienced advisors who manage millions of dollars for clients couldn't possibly be doing anyone a service.........

 

[FinanceDude]

Ha, I think I made my point about informed consent, potential conflicts of interest, and suitability clearly enough for almost anyone. Politics and philosophy would be for some other thread, some other day, maybe.

Have a nice day.

Explain suitability, I am interested in your definition of it versus how FINRA and internal Compliance Departments define it..........

 

[Grep]

Financedude,

Some will lean towards my view that 5.75-8% sales-loads are a moral hazard and are of ill-service to clients, and some will fall in with other views. So be it.

Have a nice day.

 

[FinanceDude]

Financedude,

Some will lean towards my view that 5.75-8% sales-loads are a moral hazard and are of ill-service to clients, and some will fall in with other views. So be it.

Have a nice day.

There are no 8% sales loads, but I think you refuse to believe facts. This thread is far away from the OP asking if paying a 1% wrap fee on mutual funds with ERs of .5-1.25% was a good idea, and he got a lot of advice and decided he would stay with it.

You should do a thread search on topics like loads and things. I and others have posted a lot of real world info on here over time...........

 

[Grep]

There are no 8% sales loads, but I think you refuse to believe facts.

Are you very sure of that?

Now that I think about it, I seem to remember it may have been a Janus fund. I see Janus Growth fund TIDEX has an 8.5% front-end load.

In addition, check out various Legg Mason Partners funds, such as LMPMX, SMCPX, SGCSX, LMPEX, CSGWX, LMGOX, I think all with 8.5% initial loads. Other fund families include EGRWX, IEQTX and SMMIX, also all with ~8.5% sales loads.

Even Fidelity has a couple of egregiously-expensive load funds, including FDESX, with an 8.24% initial load. It may just amount to a typical large-cap growth fund, but with a sales-load that would make Madoff blush, it's got to be worth it!

Have a nice day.

 

[saluki9]

Even Fidelity has a couple of egregiously-expensive load funds, including FDETX, with an 8.24% initial load.

Have a nice day.

FDETX is a no load fund.

In addition, I have never seen a statement that showed the fund load on it. Without knowing the actual fund load the only way to tell is to read the prospectus or to look at the purchase price and compare to the NAV on that date.

FYI - Most of those funds you listed are no load and all Janus funds are no load and their symbol always starts with J.

 

[Grep]

FDETX is a no load fund.

Sorry, FDESX. I corrected it in my earlier post.

By the way, the above is culled from one of many stock screeners. I can't vouch for the accuracy of the data beyond reporting what it came up with.

 

[FinanceDude]

Removed.........

 

[FinanceDude]

I was not aware that fund companies still charge 8% on some funds. I have never used those funds, and quite frankly find it hard to believe there's an money in those funds, considering the competitive environment that exists.

Ever hear of breakpoints, or rights of accumulation, or letter of intent? There are ways to pay a lot less than 5.75%...........

 

[samclem]

I was not aware that fund companies still charge 8% on some funds. I have never used those funds, and quite frankly find it hard to believe there's an money in those funds, considering the competitive environment that exists.

But, competition requires an informed consumer. There are still "advisors," brokers, etc out there who sell via affinity to their customers, and Granny has no idea that she's paying Nephew Fred a huge commission. Sure, Fred has no legal obligation to tell her she's getting a bum deal (any more than the used car dealer has to tell a customer that he/she can get a better deal on a car somewhere else). But, it's probably not realistic to portray these hustlers as helpful counselors to their clients.

There are certainly many FAs and even brokers who do more good than harm. But the high-fee, take-advantage-of-the-customer types (and the expensive products they sell) do a lot to damage the image of the group as a whole.

 

[Gardnr]

But, competition requires an informed consumer. There are still "advisors," brokers, etc out there who sell via affinity to their customers, and Granny has no idea that she's paying Nephew Fred a huge commission. Sure, Fred has no legal obligation to tell her she's getting a bum deal (any more than the used car dealer has to tell a customer that he/she can get a better deal on a car somewhere else). But, it's probably not realistic to portray these hustlers as helpful counselors to their clients.

There are certainly many FAs and even brokers who do more harm than good. But the high-fee, take-advantage-of-the-customer types (and the expensive products they sell) do a lot to damage the image of the group as a whole.

Exactly. And I think that is Grep's point. (I'll stick up for him a bit here.)

FD need not be so defensive.

 

[Bestwifeever]

But, competition requires an informed consumer. There are still "advisors," brokers, etc out there who sell via affinity to their customers, and Granny has no idea that she's paying Nephew Fred a huge commission. Sure, Fred has no legal obligation to tell her she's getting a bum deal (any more than the used car dealer has to tell a customer that he/she can get a better deal on a car somewhere else). But, it's probably not realistic to portray these hustlers as helpful counselors to their clients.

There are certainly many FAs and even brokers who do more harm than good. But the high-fee, take-advantage-of-the-customer types (and the expensive products they sell) do a lot to damage the image of the group as a whole.

Did you mean to say "do more good than harm"? Because the next sentence seems that you mean it to contradict the sentence I've bold faced.

FD can certainly stand up for himself, but I have to say most people I know in real life are not do-it-yourselfers in terms of their finances. They certainly can take care of things themselves but for a variety of reasons choose to pay someone else to do it. I respect their decisions.

 

[samclem]

Did you mean to say "do more good than harm"?

Yes, I meant "more good than harm," (though technically I'm sure it's true either way). Thanks--I went back and fixed it.