Managed Account from Fidelity---help!!!!!

[Jpblondh]

Please help me from Fidelity purgatory. I was talked into turning my close to 1M into a managed account 3 months ago. I am 69, retired with other assets not on hand with FIDO. I was shocked to see how the most conservative portfolio has lost 0.87% in 3 months. Plus I am paying them to lose this. Never had this problem before. I am great at losing my own money, I don't need them. I need to get out now, correct?
Thanks----scared Calling my CFP today at 9am EST.
it has taken them over 2 months to transfer 400K from TRP.

 

[VanWinkle]

Please help me from Fidelity purgatory. I was talked into turning my close to 1M into a managed account 3 months ago. I am 69, retired with other assets not on hand with FIDO. I was shocked to see how the most conservative portfolio has lost 0.87% in 3 months. Plus I am paying them to lose this. Never had this problem before. I am great at losing my own money, I don't need them. I need to get out now, correct?
Thanks----scared Calling my CFP today at 9am EST.
it has taken them over 2 months to transfer 400K from TRP.

What made you go to Fido managed account in the first place. Is that
reason still relevant today? 3 months is not enough time to find out
anything about the portfolio they put you into. If it is conservative, it likely holds a high percentage of bonds and they have been hit with rising interest rates for an over 2% loss this year on intermediates.

I would give them a year before making a decision if you want to see results.

Emotional decisions will likely lead to reduced gains or losses.

Best to you,

VW

 

[RunningBum]

Agree with VW. Short-term performance is not something to take action on. They should have you in an investment plan you are comfortable with going forward. If you do not understand it or do not agree with it, you should be talking with them. Or if you know what it is you want, you can do it yourself.

The other thing the managed account does is keep you from making emotional decisions contrary to your best interests, like jumping out of the market after a drop. Given the emotions in your post, it sounds like you can use this steadying hand.

The delay in getting your money transferred might have been with TRP, not Fido.

If you're really unhappy with Fido, leave them, but have a solid plan for what to do, and stick with it.

 

[Jpblondh]

Thanks VW-- I had the 1M in 401K's from CVS and Walgreens forever. The last 5 years or so put it all in stable value. It only paid @2 to 2.5% the last 3 years, but it was always positive. Was talked into changing it into IRA due to more possibilities. Wish stable value was one, but no luck. Just the bond dilemma. So here we are down 8700 for 3 months plus fees. After 2007-2008 promised myself never to lose money again. The jubilance of gaining 10,000 to me is not worth the misery of forfeiting 2,000.

 

[Jpblondh]

Agree with VW. Short-term performance is not something to take action on. They should have you in an investment plan you are comfortable with going forward. If you do not understand it or do not agree with it, you should be talking with them. Or if you know what it is you want, you can do it yourself.

The other thing the managed account does is keep you from making emotional decisions contrary to your best interests, like jumping out of the market after a drop. Given the emotions in your post, it sounds like you can use this steadying hand.

The delay in getting your money transferred might have been with TRP, not Fido.

If you're really unhappy with Fido, leave them, but have a solid plan for what to do, and stick with it.

They did say TRP was the issue, but what were they going to say?
The concept of being down is disparaging.

 

[flintnational]

OP, most of us select an asset allocation and then stick with it over the long term. So, I would not be concerned if Fidelity has lost money or not in the short term. More importantly, you should:

1) understand what they have you invested in
2) does this meet your long term goals
3) does the asset allocation match your risk tolerance.

If the investments meet these criteria, stay the course. If not, make changes.

 

[Jpblondh]

RB or VW, do you use a managed account?
Thanks

 

[Jpblondh]

I understand the account. Mostly in bonds 85% or so when I selected it. It's the most conservative they have for anyone with an aversion to risk.
Still no consolation. I would rather be in MM and get nothing, at least it is all there.

 

[REWahoo]

After 2007-2008 promised myself never to lose money again. The jubilance of gaining 10,000 to me is not worth the misery of forfeiting 2,000.

Based on this, I question whether you should be investing in stocks or bonds. They fluctuate in value and can/do decline, so by definition you can't expect to honor your promise to yourself. CD's don't go down - nor do they go up very much, at least not at present.

 

[RunningBum]

RB or VW, do you use a managed account?
Thanks

I don't. I read a lot of books and learned from a lot of smart people here. I also made some mistakes and learned from them. Now I buy and hold low cost index funds, stick with my AA, don't panic in bad times and don't get greedy in good. 2007-08 was a blip to me. I stayed the course and recovered from it.

 

[flintnational]

I understand the account. Mostly in bonds 85% or so when I selected it. It's the most conservative they have for anyone with an aversion to risk.
Still no consolation. I would rather be in MM and get nothing, at least it is all there.

It sounds like you do not want to take any risk with this money. If, so, why bonds? They can go down as you have experienced. What is the other 15% of the account? It sounds like you may want to invest only in cash, MM, and CDs. If this is the case, why did you use Fidelity to allocate the funds?

 

[VanWinkle]

RB or VW, do you use a managed account?
Thanks

I do not use a managed account, I use a self directed portfolio consisting of 3 funds at Vanguard at a 50% stock and 50% bonds allocation. This works great for me, but investing is personal so it may not work for everyone. You need to educate yourself more on the market and how to keep emotions out of your decisions. A managed account can do that for you, but you have to let them manage it instead of cashing out at the first sign of a normal market move. Markets go up and down, but through history have gone up more than down. You have to trust that.

VW

 

[euro]

Based on this, I question whether you should be investing in stocks or bonds. They fluctuate in value and can/do decline, so by definition you can't expect to honor your promise to yourself. CD's don't go down - nor do they go up very much, at least not at present.

Agreed - if you expect to match the risk profile and return of a stable value fund, then you should try to transfer your money back into your original 401k (although that may not be an option anymore if you quit working there). Stable value funds are generally a perk of 401k accounts and are not available in the open markets. The reason why they are what they are is that someone else (your employer) carries some of the risk. Fidelity (or anyone else outside of your 401k) will not share risk - they just provide service.
A CD ladder or a treasury bond ladder would be far better for you, given your risk profile. Fido will help you set those up, if you like. However, while there is basically no risk of losses, your returns will be lower than what your stable value fund is/was. If that is the only way you can sleep at night though, then that is the way to go.

 

[Jpblondh]

It sounds like you do not want to take any risk with this money. If, so, why bonds? They can go down as you have experienced. What is the other 15% of the account? It sounds like you may want to invest only in cash, MM, and CDs. If this is the case, why did you use Fidelity to allocate the funds?

The was no stable value fund so to speak in the family that I could find that would give me the 2 or 3% I had before. I would never try bonds on my own.No knowledge of such. And the most conservative one they have is mostly in bonds, no CDS or MM. For 0.9% fee they figure must at least beat that for you. MM would not do it.

 

[Jpblondh]

Agreed - if you expect to match the risk profile and return of a stable value fund, then you should try to transfer your money back into your original 401k (although that may not be an option anymore if you quit working there). Stable value funds are generally a perk of 401k accounts and are not available in the open markets. The reason why they are what they are is that someone else (your employer) carries some of the risk. Fidelity (or anyone else outside of your 401k) will not share risk - they just provide service.
A CD ladder or a treasury bond ladder would be far better for you, given your risk profile. Fido will help you set those up, if you like. However, while there is basically no risk of losses, your returns will be lower than what your stable value fund is/was. If that is the only way you can sleep at night though, then that is the way to go.

I didn't know that they would allow that to occur. It was with empowerment, I had closed it out.

 

[euro]

The was no stable value fund so to speak in the family that I could find that would give me the 2 or 3% I had before. I would never try bonds on my own.No knowledge of such. And the most conservative one they have is mostly in bonds, no CDS or MM. For 0.9% fee they figure must at least beat that for you. MM would not do it.

Well, if all you want to do is put the money in a money market fund, then you are certainly right in that you don’t need To pay Fidelity for their advice. Using/paying them only makes sense if they can contribute their bond/equities experience. If that is too risky for you, you can cut the service and just do MM or treasuries, or CDs on your own. You can still do that within the Fido framework if the money is already there.

In general, if you just want to pull everything back from Fido, as your post title suggests, just give them a call an tell them or visit a Fido branch, if there is one nearby.

 

[Bryan Barnfellow]

With possible inflation on the horizon I would question whether a 2.0-2.5% return from a stable value fund is low risk going forward. Also, remember that most bond funds are very different animals from your own portfolio of individual bonds.

Are you willing to list here the investments that Fido has you in? Are they individual bonds or bond funds? Are they short/medium/long term? It sounds to me that you might want to stay this year with Fido but talk with them about your concerns and tweak the allocation of your $1M.

-BB

 

[Markola]

OP, you must have discussed other life goals with Fidelity besides “don’t lose money,” and they subsequently built a very conservative portfolio for you best projected to meet those goals, which you agreed to in a more calm, long term mindset. By panicking over a little temporary, normal market turbulence, you are throwing the whole plan out the window. I had friends who did this in March, which is too bad. You will feel relief after you fire them for a month or two or three until this little rough patch is forgotten, and then you’re back to square one. Why not give the plan a chance to outpace the fees and inflation you’ll pay anywhere and also meet your broader life objectives? Well planned paper investments go up and they go down but mostly they go up.

 

[Jpblondh]

OP, you must have discussed other life goals with Fidelity besides “don’t lose money,” and they subsequently built a very conservative portfolio for you best projected to meet those goals, which you agreed to in a more calm, long term mindset. By panicking over a little temporary, normal market turbulence, you are throwing the whole plan out the window. I had friends who did this in March, which is too bad. You will feel relief after you fire them for a month or two or three until this little rough patch is forgotten, and then you’re back to square one. Why not give the plan a chance to outpace the fees and inflation you’ll pay anywhere and also meet your broader life objectives? Well planned paper investments go up and they go down but mostly they go up.

Spent much time discussing goals etc. It is just difficult for me not to panic. Like in Uncle Buck "That's my job". Quotes my other half.

 

[Jpblondh]

OP, you must have discussed other life goals with Fidelity besides “don’t lose money,” and they subsequently built a very conservative portfolio for you best projected to meet those goals, which you agreed to in a more calm, long term mindset. By panicking over a little temporary, normal market turbulence, you are throwing the whole plan out the window. I had friends who did this in March, which is too bad. You will feel relief after you fire them for a month or two or three until this little rough patch is forgotten, and then you’re back to square one. Why not give the plan a chance to outpace the fees and inflation you’ll pay anywhere and also meet your broader life objectives? Well planned paper investments go up and they go down but mostly they go up.

Spent much time discussing goals etc. It is just difficult for me not to panic. Like in Uncle Buck "That's my job". Quotes my other half.

 

[Markola]

What did the CFP say when you called them?

 

[Venturer]

RB or VW, do you use a managed account?
Thanks

I use Fidelity managed account since 03/28/2020 which was the beginning of the pandemic. I had a bad experience with a FA with a different company that was recommended to me. He had both my DW and I in some stuff that wasn't making us much but it was as we found out making him good money. Then he left that company and wanted us to follow him to his new "better" chance to make "us" more money.(make him more by churning us). After reading here and some agonizing decisions we went to Atlanta to the Fidelity office there. My DW wanted a "safer " portfolio and I am a "little" more risk adverse. Long story short I am in a 65-25-10 mix portfolio. & DW is in a 50-40-10. My account was $105k up 01/31 and I just looked, it is still $97k up this am. My DW is up $48k but she has a lot less in hers because she took a child care break from work for 15 yrs. Could we be even higher by ourselves maybe. But I sleep well at night now because I truly feel our Advisor is trying to do us well. We still can't go to the office so far but he said as soon as this mess is over we are going to come in and have another meeting. For now we just communicate by email text and phone & he is really quick to respond. I know that as far as managed accounts Fidelity is very competitive with the rate. As many have said here I would stay the course for at least 6 to 8 months and see how it goes. You might be surprised and pleased. Anyway my .02 cents and its your money -you do you! Good luck in the future and keep us informed!

 

[Markola]

I use Fidelity managed account since 03/28/2020 which was the beginning of the pandemic. I had a bad experience with a FA with a different company that was recommended to me. He had both my DW and I in some stuff that wasn't making us much but it was as we found out making him good money. Then he left that company and wanted us to follow him to his new "better" chance to make "us" more money.(make him more by churning us). After reading here and some agonizing decisions we went to Atlanta to the Fidelity office there. My DW wanted a "safer " portfolio and I am a "little" more risk adverse. Long story short I am in a 65-25-10 mix portfolio. & DW is in a 50-40-10. My account was $105k up 01/31 and I just looked, it is still $97k up this am. My DW is up $48k but she has a lot less in hers because she took a child care break from work for 15 yrs. Could we be even higher by ourselves maybe. But I sleep well at night now because I truly feel our Advisor is trying to do us well. We still can't go to the office so far but he said as soon as this mess is over we are going to come in and have another meeting. For now we just communicate by email text and phone & he is really quick to respond. I know that as far as managed accounts Fidelity is very competitive with the rate. As many have said here I would stay the course for at least 6 to 8 months and see how it goes. You might be surprised and pleased. Anyway my .02 cents and its your money -you do you! Good luck in the future and keep us informed!

We do the same with Vanguard’s similar program called Personal Advisor Services. The difference is, everything with our assigned CFP is handled over the phone and online, which is one reason why the cost is only 30 basis points, since Vanguard customers don’t have to pay for those storefronts and downtown offices. We have full alignment with our low-fee index fund values and we get fantastic service for any possible money question or need that we have. That program suits us well for who we are but if Vanguard didn’t exist, I’d go with FIDO or Schwab.

 

[OldShooter]

@Jpblondh, I have been in several situations where I had to evaluate an investment manager’s performance and, as several here have pointed out, 3 months is far too short. My minimum, and I cannot even defend it as being long enough, is two years. Five or even 10 years are much better periods, but if I waited 10 years and was not dead yet, I would have very little time to benefit from what I learned.

One thing I believe is valid is to use PortfolioVisualizer (https://www.portfoliovisualizer.com) to compare your new Fidelity portfolio to some standard benchmarks like a total US market fund or, if more appropriate, an indexed bond fund.. Backtesting has its pitfalls to be sure, but IMO it is valid to look at things like maximum drawdown, volatility, etc. in your search for high stability. Backtesting is virtually useless to predict total return, but I think it has at least some validity for predicting volatility. YMMV, of course.

 

[latexman]

I've heard this said, "one of the reasons to keep your old 401k is access to a stable value fund", on the forum many times over the years.

I don't know if you can go back to your 401k. I doubt it, but you don't know until you try. If nothing else, maybe this experience will help others to realise what they have before they lose it.

Thanks for sharing.