Vanguard Portfolio Advisory Service AA

[Slim11]

I am with you, I think the computer system creates the holdings baised on. Your risk factor. But if you can not do it yourself, it is probably worth it. I myself have tested some of these things and they were the same if not better then my picks over the last 2 years. I only put about 25 perce t of what I have into them. Its atually not a bad feeling to let someone else manage stuff. My other thoughts were to try them out in case of me getting hit by a bus tomorrow. My familly would have no clue how to invest the money in the bank, and I wouldnt be able to guide them properlly without building a relationship with someone. Now If the bus things happen , I can happily say to let fido invest it all. So there can be other factors at play. And most people , even relatives , dont like discussing finance.

 

[HI Bill]

Target Date Fund for such people. No point in paying 0.3% for such 'service' when you can purchase something like Target 2050 for just 0.08%. Especially when they have you in BND.

 

[audreyh1]

You just have to have a clue which is a huge hurdle for many people. Investing ignorance is common. Plus the professionals are motivated to keep you clueless and convince you that it’s way too hard (intimidation) and that they have the magic answers.

Approaching retirement I took the attitude that no one else cares about my money as much as I do (plus conflicts of interest opportunities seemed rampant). But by then I had some practical experience - I was aware of the fund choices available in my 401K, fortunately I had paid attention. But I also had made several newbie investment mistakes trying to time the market or trading some stocks, fortunately with smaller amounts and not in my 401K where trading stocks was not an option. I leaned how tricky some things can be. Fortunately I really buckled down and spent a couple of years educating myself on long term investing for retirement before seriously committing to a plan.

 

[Slim11]

This is why they need to have finance in schools. Just for the basics. I made tons of mistakes that cost me a lot over the years. People need to understand a little and the risks and options available to them as the get older. I atually did this to an extent where I worked. I got people to think about saving and retirement plans as they went through there careers. I didn't give advice on what to buy , just told them it was a good idea to save money for the future. And how deferred comps worked. After I retired, many on these same people, working and retired still call me for advice. And I am not the smartest for this, but people dont know what they dont know.

 

[mrfeh]

I would argue not "anybody" could put it together and manage it--at least not confidently. People pay to have others do their tax returns, maintain their lawns, change their oil, etc. Is $6000 for managing $2M in retirement savings so large in proportion to paying for those other services?

I also do my own taxes, mow my lawn and change my cars' oil.

 

[DrRoy]

I tried an advisor at 1% in 2005 for a portion of my portfolio, and I kept the rest. After 8 years, my overall returns were better than his, before the fee, so I took the funds back. If I had agreed to all of his suggestions along the way, his return would have been even lower.

 

[Yegey]

My feeling is that the simple portfolio is good. Many places will create a super complicated portfolio on purpose like 50 ETF because it gives them the appearance of doing something. This also makes it super difficult to unwind if you decided to leave.

In my opinion, paying an advisor to manage your portfolio does not add value. You are likely not to do better than say a target fund of equivalent allocation. What would be useful in my opinion is the planning advise they give. Too many people assign you should hire a Financial planner to managed their portfolio when they should emphasize the planning.

 

[Lorenzo]

I also do my own taxes, mow my lawn and change my cars' oil.

As I would bet a disproportionate number of forum members do (or at least used to do). Most of us here are not the "anybody" I referred to.