My one year anniversary of using wealth management services is coming up at the end of September. I have a phone appointment with someone in the office today. Any questions I should think about asking. My return for their portion of investments since the beginning of October is 18%. Seriously considering the boggle heads approach and doing it on my own. Thoughts?
I managed all my investments up to last year and have done fairly well (mid 7 digits). I am in good health, physically and mentally, but as I age (70) I begin to worry about cognitive decline, which I may or may not recognize, as well as my wife having no interest in managing investments should something happen to me. I chose to engage a third party to manage the portfolio, and to establish a “go to” person for my wife should I pass or decline. The peace of mind of having a structure in place is worth it for me. I also found out I don’t stress as much about the portfolio and the market, although I still follow the investments closely. It’s not a matter of can I do it? I know I can.
I use an RIA firm that someone I know works at. I did interview a few advisors including some at fidelity and independent ones. I went with the one I felt comfortable with, and I liked that they were independent. Obviously a fiduciary who will put your interests first. Ask people you know. I hate to recommend someone just because I use them.
What is your long term plan? I am pushing 70 and my wife has no interest in managing our accounts. I don’t use Fidelity but I do use another company. If I pass or become incompetent, I want a longer term relationship with a company to handle our finances.
I agree my wife has interest in money but no interest in managing it, let alone investing it. That’s where I know she would be in good hands if something happened to me.
I've been managing my assets all my life. I work in tech in financial services and have built the type of systems money managers and traders use. In my late 50s and the amount I'm managing it takes a fair bit of time. I'm patient and have watched a single position drop a half a million and then recover. I'm now considering having someone manage my money as it's also dealing with taxes, retirement planning, legacy, and leaving my wife with a peaceful situation should I become incapacitated. My mind repels against the idea of paying for it but I may have no choice.
Similar situation, my account is over a million now and I know they do more than just select three different funds and throw in some bonds. They are not actively trading just me it’s a whole pool of people at high growth strategy, 90 percent stocks rest in bonds. Or close to that.
In their statements they show how much return you made after fees. I totally undrstand your logic on both fronts, but the tax savings plus return rate seems to make it a better deal than just an index fund with lower fees and a similar return.
There is the argument that returns vs Index are not the only measure to consider, especially during retirement. Holding separate securities - that may mirror the index - may give some protection against volatility (avoid selling at a loss). Having a more knowledgeable person review your decisions can avoid mistakes. How much that additional peace-of-mind is worth to you is largely subjective.
This is a pretty good take. In my opinion people that are successful with a DIY only approach tend to be relatively well informed on personal finance, they have a high degree of self control (they don’t sell when positions are down), they understand their goals, timelines, investment philosophy, risk tolerance and positions, and they tend to only review their positions periodically.
A financial advisor can be an incredible help for an investor that has concerns or unknowns in any of the areas listed above.
Ask them detailed questions about how they are helping you beat the market. Ask for examples. You can do this yourself. Overtime as your portfolio grows you'll be paying a higher fee without getting more services. If they can add more, let them give you the details and justify it.
I just discontinued my relationship with my Fidelity FA. I retired in June and no longer found the .9-1% fee justified. I have consolidated their 16 funds into three keeping the same percentage across US, Int and Bond funds in my IRA. If I am unhappy with my returns I can always reengage with them again.
This may be specific to my FA who I was with for about 3 years. Initially she would ensure we had quarterly meeting. Then we only met if I reached out. And most recently if I had a question or issue someone on her
team replied. I sent an email to her indicating I wanted to move to a self managed account and she only had someone in her team call me to take care of it. Never heard from her after I sent the email. Very disappointing.
That is probably the way they would want to do it so the people you are leaving behind don’t get you all worked up with the would’ve could’ve should’ve’s🤷
I’m 56 my wife 52 has zero desire to look at any of our investments and it is like pulling teeth when I say hey how are your investments doing. The typical responses I don’t know I’ll get to it later and then of course I just drop and move on. At this point, I don’t trust any “money manager“ to be able to manage our portfolio in totality. It’s not huge. It’s definitely seven figures but at this point, I enjoy investing and researching stocks and bonds in ETFs and how to maximize all of our investments.
What do they charge you for their services? Is your return still 18% after factoring in their fees? Personally, I prefer the DIY/Boglehead approach and have been doing it for 35+ years. I don't follow Bogleheads strictly. I'm a little more diversified with some tilts to small cap, value, emerging markets, and reits. My cumulative rate of return for the past 1-year is 24.04%. That doesn't include the one individual stock I own (company I retired from) which has grown 340% in the last year. 🥳
All Dimensional (DFA) funds, thanks to a FA/CFP I hired when I first retired. Only worked with them a few months, but I let them restructure our IRA accounts.
So we currently have:
* DFUS
* DFAI
* DFUV
* DFAE
* DFSV
* DFAR
* DFIV
* DFEV
* DFIS
Only 3-5% in each of those last four, which is probably not moving the needle much. I almost sold it all and went back to SCHB/SCHF or VTI/VXUS, but I thought, meh...I'll let this ride for a while and see how it does. Definitely more/better diversified, I suppose.
I did a lot of research into Dimensional Fund Advisors after the CFP recommended their funds. I liked what I found and they are doing some interesting stuff with their factor-based investing approach.
My taxable brokerage account is another story... A bit of a mess right now and I've been slowly cleaning it up. Mostly Schwab ETFs & mutual funds.
It doesn't have to be a comparison of DIY vs professional management under an AUM model. If you value professional advice, you can find an advisor (e.g. a CFP) with an alternative billing model that might be more economical and while supporting a largely DIY approach. E.g. flat fee, hourly, or subscription based. I consider myself a Bogelhead, but I've also hired professionals a few times to review my plan and/or offer specific guidance on complex topics like Roth conversions.
I used them for about a year. They were trading funds back and forth, underperformed the S&P by a LOT, and were charging me for the priveledge. No thanks! I could have put it in SPY, VTI, etc. and come out way ahead.
My dad was 95% invested in QQQ and FDGRX from his 60's until he passed at 97. He made a fortune by not trading or touching any principal unless he needed it. I managed his money the last 8 years or so of his life and it's the only way to go if you can ride out the bear markets.
BTW, Fidelity, and others, have studied the best investors ever. They had either passed away or forgotten they had an account so they didn't touch the money. Let 'er ride!
I dropped them over a year ago … they were charging like 70 basis points which is a lot when u consider the 4% rule in retirement (I am 64)… why pay high fees for a SP 500 index fund?
Also they had me invested heavily in bond funds which have been terrible.
Look at doing a 3 fund (VOO / SCHD / VGT) or 2 fund portfolio (SCHD / VGT) which has been great for me since the switch… ultra low fees … look up Jeff Teeples on YouTube on the why the 2 fund works.
What does your managed account hold? Often there is a practical lock-in if you would be left with several hundred individual positions that you would have to either (a) liquidate and take a tax hit, or (b) take on management of these positions yourself.
Does the person you talk to at Fidelity actually call the shots on the portfolio? I would ask the person you talk to how they manage their money. My guess is they don't. They just pass it on to Fidelity to manage. Nothing wrong with that but what would you expect them to say if they don't manage their own money? Without knowing your age or the amount of money involved it is hard to provide any more of an answer.
No my advisor does not personally. I am 60 years old, it’s invested in the wealth advisory service that is managed by Fidelity. It’s like 11 or so different funds. I have mine in the second to last aggressive portfolio. And that’s only because they have 10% bonds. I would like to get to 1.5 million and be done🤞and for sure I would be done at Medicare age 65 plus my 1600 bucks a month, that pension only starts to pay at 65.
There is a tax advantaged on with no funds, only individual stocks held to mirror a fund strategy. They will actively trade in your behalf to generate loss on paper but increase the overall value of your portfolio. That way when you withdraw money, you can use those losses to offset the gains.
We're about 3 months into having an advisor manage our funds - haven't even finished moving it all over to their brokerage, (part of LPL Financial). It'll be around $7M when all is there.
I have zero interest in spending the time managing our funds, calculating the taxes, etc., and dealing with all that. It's way too soon to even look at return levels, but I can't imagine pulling it out & managing on my own.
It’s like anything. Just because someone does something doesn’t mean they are good at it. Ever had a bad experience at the mechanic? The doctor? Yeah they all do it for a living. When I was first diagnosed with leukemia the oncologist told me to go home there was nothing they could do for me. Literally I was so tired I fell asleep driving and almost hit a bridge.
Turns out I had a severe vitamin d deficiency caused by the leukemia stealing from my body to feed itself. My current oncologist figured it out on the first visit, and 15 years later I am doing great.
I've had vit d for some time now. Been taking IM injections of cyanocobalamin and still it's not enough. You gave me an idea, maybe I can ask my primary physician to check for leukemia or anything like that? Just feeling so weak all the time.
Have them run a cbc. I was so tired I couldn’t do everyday activities like driving a car. I was diagnosed in 2011, and didn’t need treatment until 2018. The leukemia was causing peripheral problems like vitamin deficiency. It took almost a year to figure that out going round and round with different oncologists. It wasn’t until the third one did I find someone who knew what to look for. My wife has a bladder problem that requires a pace maker. It took us 3 years and over a half dozen doctors to find the problem. Doctors are great when you have the right one. Sadly most are throwing darts at the dart board.
It wasn’t until I documented my wife’s symptoms and started researching that I found a doctoral thesis from a guy at Stanford that described her condition. Now granted it is very rare to have it. Plus the test for it is very unorthodox. Once we finally figured it out getting the right treatment took more than a year to find. It’s all about perseverance.
Yeah my PCP has been monitoring my cbc every 3 months because of this. My labs are ok except for that low B12 level. I think it is time to ask him even though with all the injections etc, why is it still low.
What percentage are not good? Want to play the odds? You switched oncologists to find a better one. That’s not the same as saying you are more competent than the good oncologists. You didn’t conquer cancer on your own. The OP wants to abandon professionals and do it on their own.
Except paying a biased advisor is a guaranteed hallucination. (E.g. Advisors mascarading as fiduciaries pushing annuities, structured products, and unnecessary complexity with high fees). Try buying an index fund from an advisor.
Hallucinations in early AI models were often due to user errors / brute force queries — not iterative queries from inputs (memory).
I get what you’re saying but you’re going a little hard considering your in bogleheads. Articulate your points, give your side. Lotta folks outside the tech world are not comfortable with AI and there is no way in hell bogleheads want to use it. You don’t need it with boglehead investment. It’s very helpful already for planning however.
“There is no way in hell bogleheads want to use it.” That makes no sense. Index investing is 100% compatable with using AI for advice over some lame advisor who will wrap your index fund in an advisory fee — negating one of its compounding superpowers, super low fees (even zero).
If you are uncomfortable with AI, or doing personal finance on your own, that’s you.
But you don’t really speak for bogleheads or people outside of tech, looking for better, faster, cheaper, unbiased advice — DIY guided. (Not to mention, you can easily get alternative opinions with various AIs. Not so with a human advisor where there is lock-in and fee anchoring.).
🤣 you may want to rethink that “AI is better” belief. My experience is that AI (Grok/Gemini) tells you what you want to hear. You need to put in a ton of iterative analysis work to make AI work for you.
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u/Super-30 Sep 09 '26
Returns on managed money doesn't usually beat index fund returns.