Paying a “wealth manager” 1pct fee- what can he do?

[Anonymous]

Anonymous wrote:

Anonymous wrote:He can take 1% of your assets every year plus whatever transaction fees and commissions he gets churning your account. That's pretty much about it.

This.

If you are wondering how to find one, just go to any mediocre private school and find the best dressed and most insufferable ass, who also has a laughable academic pedigree, and you have found a “wealth manager”.

LOL

[Anonymous]

Anonymous wrote:

Anonymous wrote:My guy didn't beat the market, year after year. but we our investments certainly grew year after relatively close to the pace of the market. We accepted that because we are in our 50s and wanted a conservative portfolio. (We lived through 2000 and 2008,)

The real value, it turned out, is that our investments did not fall as far as the market has in the last six months. Yes, we are down, but not nearly as much as some of our peers who were overweighted on tech.

You can manage a conservative portfolio on your own. Invest in stock index funds and have an appropriate amount in fixed income to cushion the bumps. By paying 1% to a manager, you’re guaranteed to not keep up with the market much less beat it.

"Invest in a stock index fund"....

my advisor is beating the index funds - which have had the worst downturn in 50 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My guy didn't beat the market, year after year. but we our investments certainly grew year after relatively close to the pace of the market. We accepted that because we are in our 50s and wanted a conservative portfolio. (We lived through 2000 and 2008,)

The real value, it turned out, is that our investments did not fall as far as the market has in the last six months. Yes, we are down, but not nearly as much as some of our peers who were overweighted on tech.

You can manage a conservative portfolio on your own. Invest in stock index funds and have an appropriate amount in fixed income to cushion the bumps. By paying 1% to a manager, you’re guaranteed to not keep up with the market much less beat it.

"Invest in a stock index fund"....

my advisor is beating the index funds - which have had the worst downturn in 50 years.

By how much and over what period of time? Possible, but doubtful, long term. Also it’s not the worst downturn in 50 years. Anyone who has bonds and stocks is suffering declines in both, not just fund investors.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My guy didn't beat the market, year after year. but we our investments certainly grew year after relatively close to the pace of the market. We accepted that because we are in our 50s and wanted a conservative portfolio. (We lived through 2000 and 2008,)

The real value, it turned out, is that our investments did not fall as far as the market has in the last six months. Yes, we are down, but not nearly as much as some of our peers who were overweighted on tech.

You can manage a conservative portfolio on your own. Invest in stock index funds and have an appropriate amount in fixed income to cushion the bumps. By paying 1% to a manager, you’re guaranteed to not keep up with the market much less beat it.

My advisor didn't beat the market for the last three years, but we still made a lot of money. Where he earned his fee is the last six months. Yes, my portfolio is down - but is faring much better than the market during the same period. We are now talking about strategies for investing the cash we began stockpiling more than a year ago on his recommendation. I think investing on your own is great if you have financial acumen and interest. I have neither.



"Invest in a stock index fund"....

my advisor is beating the index funds - which have had the worst downturn in 50 years.

By how much and over what period of time? Possible, but doubtful, long term. Also it’s not the worst downturn in 50 years. Anyone who has bonds and stocks is suffering declines in both, not just fund investors.

[Anonymous]

Advisors don’t beat the market. They invest approximately for your goals and keep you on track. Do-it-yourselfers may think that’s a sham, but if they showed you their full, unvarnished investing history, it probably doesn’t look good - lots of glorious spikes followed by near wipeouts. Do you want to gamble with you financial future or plan it? Get an independent (non-broker) advisor.

[Anonymous]

My advisor didn't beat the market on the way up, although they were pretty good. However, they have really protected me on the downside. Yes, I am down in 2022 - but not nearly as much as the market. I am very, very grateful to be in my current position.

[Anonymous]

Anonymous wrote:My advisor didn't beat the market on the way up, although they were pretty good. However, they have really protected me on the downside. Yes, I am down in 2022 - but not nearly as much as the market. I am very, very grateful to be in my current position.

+1

My stocks are down 10% year over year but thanks to diversification, my NW has not been impacted.

[Anonymous]

Anonymous wrote:Advisors don’t beat the market. They invest approximately for your goals and keep you on track. Do-it-yourselfers may think that’s a sham, but if they showed you their full, unvarnished investing history, it probably doesn’t look good - lots of glorious spikes followed by near wipeouts. Do you want to gamble with you financial future or plan it? Get an independent (non-broker) advisor.

I don’t understand. Are you saying DIYers are incapable of investing for my goals and staying on track? Because I am actually wondering why anyone needs to read the financial news bcs once I no longer was tracking mortgage rates the financial news is irrelevant to my savings plans.

[Anonymous]

I suggest you shop around and learn a bit more about the different types of credentials and roles of financial professionals, including CFA and fee-only planners. "Wealth manager" doesn't really mean anything it sounds like a stock broker who may be serving the employer's interest as well as yours.

[Anonymous]

once you get over $2 million or $3 million, you really need professional advice. That's my view. Under $1 million, you can buy a bunch of index funds.

[Anonymous]

Well I pay 1.25% and have talked to the guy twice in 2 years, for a total of 10 minutes. They do send me a online magazine with recipes and host Zoom yoga classes. What a waste,

[Anonymous]

Anonymous wrote:Well I pay 1.25% and have talked to the guy twice in 2 years, for a total of 10 minutes. They do send me a online magazine with recipes and host Zoom yoga classes. What a waste,

Yea, and how much did you pay in fees? One year it was over 30k! You could deduct it then, but not now according to my tax person.

[Anonymous]

LOL - not much financial wisdom in these posts. Not hard to understand why some of you think you’re doing well with your advisors.

[Anonymous]

I used to represent staff in a pension in a pension fund. I don’t know about advisors but when we compared index funds to managed funds the general trend we saw over and over is that there was always a bit of a “delay”. Managed funds were slower to start rising but also slower to start going down. It didn’t seem worth it it to pay around 1% for the typical management fee but some of the funds would have stand out years where they might drastically outperform the market or underperform the market depending on their allocation and what segment they were specialized in. The question we were always interested in asking theoretically is what the managers in the fund put in their own personal retirement funds rather instead of what they were trying to sell. The dirty secret on Wall Street is that most traders just used index funds in their own accounts.

[Anonymous]

Leaving aside the skill side of the equation, on the cost side I think a lot of people believe that 1%/year is small. It's not.

As a frame of reference historical equity excess returns are about 5-6%. The 10-year nominal treasury bond is yielding 2.88% and 10-year inflation-indexed bonds are yielding 0.54%.