financial advisors?

[firemediceric]

EZ decision. Reject that one. There is never a reason to pay a load. Never.

I was tempted as several of my peers who retired over the last 5 years have gone into that REIT fund and have enjoyed great returns. Looking at the snapshot of the history I’ve attached, I think much of that has to do with fortunate timing and a little bit with smoke & mirrors with how they were paid their dividends each month.

Some more digging turned me off as the money is liquid only for a brief window every quarter. Not that I plan to often move money out of any investment, but I don’t like being told I can’t. Thinking of the 4.75% to get in was when I stopped looking.

An aside, the F/A is really touting that the 4.75% is way better than an AUM fee that I’d be charged elsewhere. She gave several illustrations of how soon I’ll recoup that 4.75% and how much I’ll save in the long term by not paying her an AUM fee. I question though how motivated she’ll be in the future if she’s already skinned this cat, or will she be pushing new products on me with new fees to get more meat off of the bone? I also keep coming back to all I’ve read recommending fee only advisors rather than fee based such as this one is. Of course I’d prefer to find an advisor I could just pay an hourly professional fee to once every 6 months or so, but I haven’t come across any who will entertain that arrangement.

 

[arcyallen]

An aside, the F/A is really touting that the 4.75% is way better than an AUM fee that I’d be charged elsewhere. She gave several illustrations of how soon I’ll recoup that 4.75% and how much I’ll save in the long term by not paying her an AUM fee. I question though how motivated she’ll be in the future if she’s already skinned this cat, or will she be pushing new products on me with new fees to get more meat off of the bone?

THIS. It's always amazing to see people who are good at math shred the idea of a one time 5% upfront load, but stay silent on a recurring .8%+ fee.

Assuming another's intentions is a fool's errand, so let's dispense with that. That math your FA suggested is right, but you also have a valid concern: Will they continue to serve you once you'd already paid your fee? The key is to be confident that they will. That's your judgement call. Also keep in mind that A share mutual funds have recurring 12b1 service fees (that are part of their internal management fees) that are paying that advisor to retain and serve the client. I can assure you when I was an FA I had many clients that were already "all in", and I had not only all their money but likely most of what I'd ever see from them. And yet, I gave them every ounce of energy they needed and deserved from me. IF you want full service from an FA, an upfront load will be cheaper than a recurring fee. If you don't want full service, no problem, go a different route. It's as simple as that.

And to the person that said "They prey on the elderly and the who don’t know the basics of investing.", it was common knowledge for us that a better educated client was a better client. You may not believe or agree with that, but that is 100% true. The depiction of all FAs as being this sinister group of never-do-gooders is comical and sad to those of us who have actually and personally known hundreds of them.

 

[rmorris50]

I was tempted as several of my peers who retired over the last 5 years have gone into that REIT fund and have enjoyed great returns. Looking at the snapshot of the history I’ve attached, I think much of that has to do with fortunate timing and a little bit with smoke & mirrors with how they were paid their dividends each month.

Some more digging turned me off as the money is liquid only for a brief window every quarter. Not that I plan to often move money out of any investment, but I don’t like being told I can’t. Thinking of the 4.75% to get in was when I stopped looking.

An aside, the F/A is really touting that the 4.75% is way better than an AUM fee that I’d be charged elsewhere. She gave several illustrations of how soon I’ll recoup that 4.75% and how much I’ll save in the long term by not paying her an AUM fee. I question though how motivated she’ll be in the future if she’s already skinned this cat, or will she be pushing new products on me with new fees to get more meat off of the bone? I also keep coming back to all I’ve read recommending fee only advisors rather than fee based such as this one is. Of course I’d prefer to find an advisor I could just pay an hourly professional fee to once every 6 months or so, but I haven’t come across any who will entertain that arrangement.

Maybe you save more in the long term but that kinda forces you to stay with that advisor long term to reap that benefit.

One downside I have found with the F/A is most manage to traditional retirement ages and encourage to keep working so they can keep making fees. If you wan to retire early you might find yourself constantly “negotiating” with the advisor to make that happen. They’ll scare you with living to 100 and health care costs and inflation being very high, and you really need x million to maintain a similar standard of living. I get it, it’s their job to be conservative, and they want their fees.

So our advisor has been great during the accumulation phase, but when to switch to the deaccumulation phase is more of a negotiation with the advisor for those pursuing FIRE.

 

[Sunset]

I was tempted as several of my peers who retired over the last 5 years have gone into that REIT fund and have enjoyed great returns. Looking at the snapshot of the history I’ve attached, I think much of that has to do with fortunate timing and a little bit with smoke & mirrors with how they were paid their dividends each month.

Some more digging turned me off as the money is liquid only for a brief window every quarter. Not that I plan to often move money out of any investment, but I don’t like being told I can’t. Thinking of the 4.75% to get in was when I stopped looking.

An aside, the F/A is really touting that the 4.75% is way better than an AUM fee that I’d be charged elsewhere. She gave several illustrations of how soon I’ll recoup that 4.75% and how much I’ll save in the long term by not paying her an AUM fee. I question though how motivated she’ll be in the future if she’s already skinned this cat, or will she be pushing new products on me with new fees to get more meat off of the bone? I also keep coming back to all I’ve read recommending fee only advisors rather than fee based such as this one is. Of course I’d prefer to find an advisor I could just pay an hourly professional fee to once every 6 months or so, but I haven’t come across any who will entertain that arrangement.

The 4.75% fee is just for that 1 fund (which also has a 2% annual fee). There will be fees for other funds unless you want all your money in just 1 fund

Did this F/A say what the fee for other funds that are recommended, or is this the only one ?

 

[OldShooter]

I was tempted as several of my peers who retired over the last 5 years have gone into that REIT fund and have enjoyed great returns. Looking at the snapshot of the history I’ve attached, I think much of that has to do with fortunate timing and a little bit with smoke & mirrors with how they were paid their dividends each month. Some more digging turned me off as the money is liquid only for a brief window every quarter. Not that I plan to often move money out of any investment, but I don’t like being told I can’t. Thinking of the 4.75% to get in was when I stopped looking.

Wise decision, IMO. I have rule that I teach to my Adult Ed investing classes: "The more complicated the product, the more likely it is that the product was designed to make money for the sellers, not for you." By avoiding complicated products I have possibly missed a few princes, but I have definitely avoided kissing a lot of frogs. And in investing, kissing a frog is expensive.

An aside, the F/A is really touting that the 4.75% is way better than an AUM fee that I’d be charged elsewhere.

Of course she says that. But that's a false choice. You have many options besides those two.

She gave several illustrations of how soon I’ll recoup that 4.75%

Sophistry aside, the arithmetic is very simple: Consider two accounts invested identically, one opened with $1,000 and one opened with $9,525. Pick any number of years and any rate of return and that smaller account will always be smaller by exactly 4.75%. Always. Forever.

... and how much I’ll save in the long term by not paying her an AUM fee.

You'll save even more by ditching her, which you should do.

I question though how motivated she’ll be in the future if she’s already skinned this cat, or will she be pushing new products on me with new fees to get more meat off of the bone?

Of course she will be pushing. At that point you are a proven meal ticket. Odds are, too that the investment she is currently pitching charges you a 12b-1 fee. (https://www.investopedia.com/terms/1/12b-1fees.asp) That makes your investment a gift that keeps on giving -- to her.

I also keep coming back to all I’ve read recommending fee only advisors rather than fee based such as this one is. Of course I’d prefer to find an advisor I could just pay an hourly professional fee to once every 6 months or so, but I haven’t come across any who will entertain that arrangement.

They are out there. I have never hired one but the Garrett Planning Network, xyplanningnetwork, and NAPFA seem to get good reviews.

But, really, just your written thoughts here tell me that you really don't need to pay an investment advisor, although you may benefit from a look at your whole financial picture by a full-boat financial advisor.

In the mean time, I'd suggest:

"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.amazon.com/Coffeehouse-Investor-Wealth-Ignore-Street/dp/159184584X (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

 

[ERD50]

The 4.75% fee is just for that 1 fund (which also has a 2% annual fee). There will be fees for other funds unless you want all your money in just 1 fund

Did this F/A say what the fee for other funds that are recommended, or is this the only one ?

Wowsers! I was thinking that maybe the 2% annual expense ratio was for a different class of that fund that did not carry an upfront load, but I guess not...

https://bluerockfunds.com/wp-content/uploads/2021/01/TI-Fact-Sheet-Q4-2020-A-C-L-Shares.pdf

The total annual fund operating expense ratio, gross of any fee waivers or expense reimbursements, is 2.21% for A-share, 2.96% for C-share, and 2.46% for L-share. The Fund’s investment adviser has contractually agreed to reduce its fees and/or absorb expenses of the Fund, at least until January 31, 2021 to ensure that the net annual fund operating expenses will not exceed 1.95% for A-share, 2.70% for C-share, and 2.20% for L-share, subject to possible recoupment from the Fund in future years. Please review the Fund’s Prospectus for more detail on the expense waiver. Results shown reflect the full fee waiver, without which the results would have been lower. The maximum sales charge is 5.75% for A-share and 4.25% for L-share. Investors may be eligible for a reduction in sales charges. Please see the Fund Prospectus for details.

I guess REITs do carry higher expenses, but I see some are much less than this fund. REZ is 0.48% for example.

edit/add - not only that, but after the upfront load, it underperforms REZ (and VTI by a wide margin).

https://tinyurl.com/2fofzd67 < shortlink to portfoliovisualizer

tiprx $1,000,000 $2,246,547
REZ $1,000,000 $2,189,052
VTI $1,000,000 $3,329,465


-ERD50

 

[Badger]

When my wife was starting her 403b the only game in town that she could use that wasn't an insurance company was Merrill Lynch. The advisor in charge of 403b tried to get her to let him handle her money by buying front load mutual funds with accompanying high annual fees. AND he wanted to be able to sell then buy other front load mutual funds when he deemed it necessary.
It sounded too much like a potential for "Churning" to me so we made other arrangements to have the money put in MM accounts to be later transferred to Vanguard.
I am not a fan of most advisors so I learned how to more safely manage our own investments. Although I don't have the background of most here, thanks to the available books on the subject and some of the folks here I didn't find it too difficult to grow a respectable retirement nest egg.

Cheers!

 

[Chuckanut]

It would not hurt to check it the Humble Dollar website. Jonathan Clements has spent decades giving easy to understand guidance to do it yourself investors. I owe him, Bob Brinker and this site a lot

 

[firemediceric]

Maybe you save more in the long term but that kinda forces you to stay with that advisor long term to reap that benefit.

Exactly one of my concerns from other warnings that I have read here and elsewhere. That I would be put into a convoluted complex product leading to a painful extrication if I want to get out of the quagmire. I also predict future products being pitched with similar fees.

 

[firemediceric]

Did this F/A say what the fee for other funds that are recommended, or is this the only one ?

Presently she is proposing various mutual funds to complement this REIT. Her approach is that the Blue Rock REIT will help offset inflation and provide great growth while the mutual funds provide long term stability if given time to grow despite the ups and downs.

 

[OldShooter]

Wowsers! I was thinking that maybe the 2% annual expense ratio was for a different class of that fund that did not carry an upfront load, but I guess not. ...

OK, you made me look at TIPRX. IMO it's a real stinker. In addition to high fees and redemption restrictions, "A significant portion of the Fund’s underlying investments are in private real estate investment funds managed by institutional investment managers ... "

Right off the top, this means a couple of things. First, the net asset value of the fund is whatever the fund manager says it is. There is no market price for "private real estate funds." Second, it means there is a completely unknown layer of fees underneath the TIPRX manager's fees. It will not be small.

Run, @firemediceric. Just run.

 

[firemediceric]

In the mean time, I'd suggest:

"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.amazon.com/Coffeehouse-Investor-Wealth-Ignore-Street/dp/159184584X (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

Thank you for the suggestions. I have purchased and read all of those books. They certainly pulled back the curtain and showed that things can be done very simply. Regardless, I lack the confidence to do it on my own. I know what things I’m good at, and I don’t feel investing and making the withdrawals from the right places at the right time is one of the things I’m knowledgeable enough in to do it right.

 

[braumeister]

I don’t feel investing and making the withdrawals from the right places at the right time is one of the things I’m knowledgeable enough in to do it right.

For the simplest method, how about Warren Buffett's approach?

In his 2013 letter to Berkshire Hathaway shareholders, Mr. Buffett described how he has advised trustees to manage the money he will leave to his wife: “Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund."

 

[firemediceric]

OK, you made me look at TIPRX. IMO it's a real stinker. In addition to high fees and redemption restrictions, "A significant portion of the Fund’s underlying investments are in private real estate investment funds managed by institutional investment managers ... "

Right off the top, this means a couple of things. First, the net asset value of the fund is whatever the fund manager says it is. There is no market price for "private real estate funds." Second, it means there is a completely unknown layer of fees underneath the TIPRX manager's fees. It will not be small.

Run, @firemediceric. Just run.

And this is behavior that compromises any trust I might have for this F/A. If she is recommending a product that is such a “stinker“, why should I trust her to act in a fiduciary role making recommendations that are indeed best for me?

Other F/A’s I have interviewed who promote simpler more straight forward mixes of mutual funds in various buckets may not come across as well versed in esoteric products or seem to have some type of proprietary insider knowledge, but they also are much more understandable to me.

 

[pb4uski]

EZ decision. Reject that one. There is never a reason to pay a load. Never.

+1. NEVER pay a load, there are too many really good no load funds out there.

 

[pb4uski]

OK, you made me look at TIPRX. IMO it's a real stinker. In addition to high fees and redemption restrictions, "A significant portion of the Fund’s underlying investments are in private real estate investment funds managed by institutional investment managers ... "

Right off the top, this means a couple of things. First, the net asset value of the fund is whatever the fund manager says it is. There is no market price for "private real estate funds." Second, it means there is a completely unknown layer of fees underneath the TIPRX manager's fees. It will not be small.

Run, @firemediceric. Just run.

+1 AMT and O, two large REITS, have performed much better, but YMMV.

https://www.portfoliovisualizer.com...allocation2_2=100&symbol3=O&allocation3_3=100

 

[Bruno]

If you are paying ONLY 1% AUM per year,,,In 25 years they (FA) have 25% of your money!! I am looking for something for my wife after i go. I am looking into Schwab Intelligent Portfolios may be a robo advisor + deal for $30 a month after $300 setup fee.

With Schwab Intelligent Portfolios Premium, for a one-time planning fee of $300 and just a $30/month advisory fee after that, you'll get access to unlimited 1:1 guidance from a CERTIFIED FINANCIAL PLANNER™ professional, a digital financial plan that provides a customized roadmap to help reach your goals, as well as interactive online planning tools. Your diversified portfolio is comprised of low-cost exchange-traded funds (ETFs) and a cash allocation. Just as if you’d invested on your own, you will pay the operating expenses on the ETFs in your portfolio—which includes Schwab ETFs. We believe cash is a key component of an investment portfolio.

https://intelligent-client.schwab.com/page/faq/pay-no-advisory-fees

Please let me know if anyone has tried it and if you like it!!

 

[OldShooter]

... Other F/A’s I have interviewed who promote simpler more straight forward mixes of mutual funds in various buckets may not come across as well versed in esoteric products or seem to have some type of proprietary insider knowledge, but they also are much more understandable to me.

Well, I am a simple-is-better kind of investor, having outgrown a much more complicated investment life. Re "esoteric" that is no place for retail investors. To the extent we will be offered anything, all we will be offered is the stinky deals that all the big pension and other funds have rejected. Retail selling is too much work to do willingly.

Re "proprietary insider knowledge" if it is truly that (which is highly unlikely) it is illegal to trade based on that knowledge and a person can go to jail. Fuhgeddaboudit.

The F/As you like are the right ones for any of us IMO.

... Schwab Intelligent Portfolios ... Please let me know if anyone has tried it and if you like it!!

I gave Schwab's original robot a $100K trial portfolio and watched it for a couple of years. It was fairly unremarkable, holding a little too much cash (so Schwab Bank could make some money) and spreading the balance across a bewildering array of index funds. Performance lagged a simple Boglehead type portfolio by one or two percentage points. Overall, it seemed to me to be a good choice for someone who wanted to be really hands-off but wanted a decent portfolio and did not want to risk being raped by a bad F/A.

IMO, though, the robots are really just target date funds in new wrapping paper. They are balanced funds with the asset allocation tuned to the customer's age and goals and have similar strengths and weaknesses. I looked at target date funds briefly a couple of years ago and was very surprised to find how different their AA strategies were. So it's probably worth looking at some target date funds' AA strategies compared to robots' strategies.

 

[RetiredAt49]

For the simplest method, how about Warren Buffett's approach?

That’s exactly what I’m doing - except I use VOO and VTI as TLH pairs. Excluding rental properties, I’m 100% equities.

 

[Exchme]

THIS. It's always amazing to see people who are good at math shred the idea of a one time 5% upfront load, but stay silent on a recurring .8%+ fee.

Assuming another's intentions is a fool's errand, so let's dispense with that. That math your FA suggested is right, but you also have a valid concern: Will they continue to serve you once you'd already paid your fee? The key is to be confident that they will. That's your judgement call. Also keep in mind that A share mutual funds have recurring 12b1 service fees (that are part of their internal management fees) that are paying that advisor to retain and serve the client. I can assure you when I was an FA I had many clients that were already "all in", and I had not only all their money but likely most of what I'd ever see from them. And yet, I gave them every ounce of energy they needed and deserved from me. IF you want full service from an FA, an upfront load will be cheaper than a recurring fee. If you don't want full service, no problem, go a different route. It's as simple as that.

And to the person that said "They prey on the elderly and the who don’t know the basics of investing.", it was common knowledge for us that a better educated client was a better client. You may not believe or agree with that, but that is 100% true. The depiction of all FAs as being this sinister group of never-do-gooders is comical and sad to those of us who have actually and personally known hundreds of them.

I don't think I made the particular quote you were reacting to, but our experience with an advisor was not good and I think the problem is the incentives in the industry. The incentive for the AUM advisor seems to be to always keep selling rather than helping existing clients. After we signed up, I started to read sites like this one and it only took a few months before I felt like I knew more about what we needed than our advisor (our needs are pretty simple).

I started to notice that we were getting the same line of patter, sometimes word for word, at every meeting. Then the meetings got less and less frequent, so eventually we were paying enough in fees and fund costs to buy a new car every year and all we were getting maybe 1-2 hours of these waste-of-time meetings. Meanwhile nothing else we were promised like rebalancing was happening either. The "tax efficiency" talked about was just puffing, the funds were weren't particularly good at that.

The last straw was when we told him we were planning to retire, there was not one word about retirement planning, or even a hint that while he couldn't help us with planning, it was complicated and maybe we should hire someone. Nope. Instead, we got the original sales pitch, nearly verbatim, as all he wanted was for me to roll my 401k to an IRA for him to manage.

Now, he did not churn the account or doing anything illegal or improper, he just charged a whole lot of money for access to his funds and his very minimal effort. Seeing others here and elsewhere that had about the same experience, we are far from being exceptionally unlucky in picking one.

It still gets under my skin and recently I was fuming to my wife about the money we wasted with this guy. I said something like "we were buying him a new car every year, while we drive 10-15 year old beaters". She replied, "well we didn't buy his whole car, he drives a Maserati". She wasn't joking.

The one-time-fee model does a better job of aligning incentives, but I can see that except for a few well known names in the industry, most of those kind of advisors will starve because the sales costs can be just about as high to sell a few thousand dollar plan as an AUM advisor has that is taking several times that much per year. I'll also bet it's hard to sell a one-time-fee plan to young folks that don't have a lot of assets, a few thousand $ needed for the planner to make a profit may be a crazy-large chunk of their net worth. So I have no solutions, but the current system seems pretty broken and people that feel taken advantage of for big $ will hold a grudge against the entire advisor industry forever.

 

[arcyallen]

I started to notice that we were getting the same line of patter, sometimes word for word, at every meeting. Then the meetings got less and less frequent, so eventually we were paying enough in fees and fund costs to buy a new car every year and all we were getting maybe 1-2 hours of these waste-of-time meetings. Meanwhile nothing else we were promised like rebalancing was happening either. The "tax efficiency" talked about was just puffing, the funds were weren't particularly good at that.

The last straw was when we told him we were planning to retire, there was not one word about retirement planning, or even a hint that while he couldn't help us with planning, it was complicated and maybe we should hire someone. Nope. Instead, we got the original sales pitch, nearly verbatim, as all he wanted was for me to roll my 401k to an IRA for him to manage.

Those are good reasons to leave an advisor. When you're paying a load, or an AUM fee, you're paying for their service - not so much the investments. Regardless of how well the investments are doing, if you're not getting good service it's time to move on. If they're not planning around all of these things you mentioned (especially retirement!) then they're of minimal use.

And to clear the record for a few earlier comments: Most front-load mutual funds can be transferred in-kind to other firms. Unless it's a proprietary fund (which is rare), if you pay a load for a fund you can both 1) Move it to another firm, and 2) Exchange it into a different fund within the same fund company for no cost.

 

[target2019]

If you are paying ONLY 1% AUM per year,,,In 25 years they (FA) have 25% of your money!! I am looking for something for my wife after i go. I am looking into Schwab Intelligent Portfolios may be a robo advisor + deal for $30 a month after $300 setup fee.

With Schwab Intelligent Portfolios Premium, for a one-time planning fee of $300 and just a $30/month advisory fee after that, you'll get access to unlimited 1:1 guidance from a CERTIFIED FINANCIAL PLANNER™ professional, a digital financial plan that provides a customized roadmap to help reach your goals, as well as interactive online planning tools. Your diversified portfolio is comprised of low-cost exchange-traded funds (ETFs) and a cash allocation. Just as if you’d invested on your own, you will pay the operating expenses on the ETFs in your portfolio—which includes Schwab ETFs. We believe cash is a key component of an investment portfolio.

https://intelligent-client.schwab.com/page/faq/pay-no-advisory-fees

Please let me know if anyone has tried it and if you like it!!

The major criticism is that they hold too much of your cash in low-interest account. Cash sweep earns just .45%, versus other rates you know about.

 

[scrabbler1]

Those are good reasons to leave an advisor. When you're paying a load, or an AUM fee, you're paying for their service - not so much the investments. Regardless of how well the investments are doing, if you're not getting good service it's time to move on. If they're not planning around all of these things you mentioned (especially retirement!) then they're of minimal use.

And to clear the record for a few earlier comments: Most front-load mutual funds can be transferred in-kind to other firms. Unless it's a proprietary fund (which is rare), if you pay a load for a fund you can both 1) Move it to another firm, and 2) Exchange it into a different fund within the same fund company for no cost.

Back in 2018, my (snake-bit) friend finally decided to consolidate more of his holdings with Fido. He had a small brokerage account and a larger Roth IRA with another firm, an account he opened years earlier because a friend of his at the time was his broker. That friend moved away but he kept his accounts with that firm. The Roth IRA had a large front-end load (nearly 5%) and it was clumsy for me to make the annual purchase.

I checked with Fido to make sure all of his holdings in the brokerage and Roth IRA could be moved in-kind (they could), so, being familiar with Fido's one-line asset transfer program, I went ahead and made the transfers. Fido didn't charge any front-end loads in the Roth IRA. And having all of investments under one roof, it is very easy to make the annual Roth IRA purchase. So, he gets to keep more of his money, and I have an easier time handling this transaction. Everyone wins (except his former broker, who did not contact him after the asset transfer, if he even noticed.)

 

[pb4uski]

The major criticism is that they hold too much of your cash in low-interest account. Cash sweep earns just .45%, versus other rates you know about.

There are workarounds, but they are a real PITA. I occasionally wonder if it is worth the effort and whether I should just move everything to Fido which would be much easier.

Interetingly, I miscalcuated last week and ended up buying $25k more SWVXX than I really had... my negative settlement account balance actually exceeded my unsettled orders over the weekend.

I tried to call and fix it after the close on Friday and couldn't so I put in an order to fixe it this morning.

 

[OldShooter]

There are workarounds, but they are a real PITA. ...

When I was setting up my test of Schwab's first robot, what I did was to keep going through their customer questionnaire, answering the questions differently each time, until it proposed a portfolio that was 95% equities and 5% cash. That was the best I could do.

Interestingly, a couple of months later I got a call from a Schwab rep who was concerned about this kind of AA for an old fart, 70+. I was impressed with that follow-up but when I explained that this was just a small test portfolio and not the whole enchilada all was fine. Nice guy.

FWIW, Schwab instituted this low interest cash sweep method IIRC not long after they eliminated trading fees. I have always looked at it as an unfortunate choice, but they have to make money somehow and apparently this is part of the strategy.