Financial Advisor, cost per year

[Anonymous]

Anonymous wrote:

Anonymous wrote:Fidelity Investments is a very good co that’s family run by the Johnsons. They’ve never been part of a major scandal in 80 years in business. I wouldn’t know the first thing in how to invest money so I leave it up to the experts. They take a percentage, the more money you have with them the smaller the percentage.

This is not good advice. If you are going to use an advisor, use an independent advisor (known as an RIA), not one who works for the funds they want to sell you. I guarantee PP's funds are in a bunch of Fidelity funds, even if there are better non-Fidelity options out there.

I couldn’t trust an independent advisor. It’s too easy for them to run a pyramid scheme or steal some of your money. Investment companies sometimes have thieves working there as analysts but it’s rare and you’re covered by a billion dollar company.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s so easy to do on your own. Why have a planner - just keep it extremely simple.

Keep 1 year expenses in high yield savings
Max 2 401ks. 85/10/5 S&P/Int/Bonds
Max 2 back door Roth’s - 100% S&P
Max Family HSA - 100% S&P
Allocate desired amount to 529s: 100% S&P
Rest in VTSAX taxable at Vanguard.

Maybe try some loss harvesting but probably not the absolute most necessary thing. Get a decent accountant.

So you're almost all in S&P 500 or large cap US market.

S&P 500 has returned 8.63% YTD. VTSAX has returned 7.49% YTD.

Our portfolio has returned 10.36% YTD, and that's using an advisor. We're diversified so it's not only US, but also international markets (large cap, small cap, emerging) and also a bit in focused sectors like reinsurance, real estate, etc but never more than 2%. Then there's some bonds in there too, a mix of corporate, TIPS, and international bonds. Then tax loss harvesting is at about $10k so far this year.

But here's where it gets interesting. We also keep a chunk with a robo-advisor. That one we have configured high-risk (including up to 10% crypto). That's up 13.73% (including $37k in tax loss harvesting). That's 50% US stocks, 18% foreign devleoped markets, 15% emerging markets, 10% crypto, 3% US bonds, 3% foreign bonds.

I'm not saying an advisor is the best option -- it really depends on your circumstances -- but the "We'll just do it ourself and put it into a US index fund" is not necessarily the best strategy. You're missing out on returns by not sufficienctly diversifying.

Your figures are YTD. Over the long term I don’t believe that your portfolio beats mine and I’m not spending a huge sum of money each year on an advisor. You have 40% in international stocks and bonds - no way has that out outperformed the S&P 500 over the last 15 years.

I do have about 5% of my portfolio in crypto, Apple, Nvidia, and Netflix, but almost everything else is S&P. Only reason it’s 5% is because of how much it’s run up and I just haven’t sold.

[Anonymous]

I pay 0% because I do it myself. 99% of financial advisors can’t outperform the indexes consistently over the long term. Just put your money in a low cost S&P500 index ETF. You’re welcome.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s so easy to do on your own. Why have a planner - just keep it extremely simple.

Keep 1 year expenses in high yield savings
Max 2 401ks. 85/10/5 S&P/Int/Bonds
Max 2 back door Roth’s - 100% S&P
Max Family HSA - 100% S&P
Allocate desired amount to 529s: 100% S&P
Rest in VTSAX taxable at Vanguard.

Maybe try some loss harvesting but probably not the absolute most necessary thing. Get a decent accountant.

So you're almost all in S&P 500 or large cap US market.

S&P 500 has returned 8.63% YTD. VTSAX has returned 7.49% YTD.

Our portfolio has returned 10.36% YTD, and that's using an advisor. We're diversified so it's not only US, but also international markets (large cap, small cap, emerging) and also a bit in focused sectors like reinsurance, real estate, etc but never more than 2%. Then there's some bonds in there too, a mix of corporate, TIPS, and international bonds. Then tax loss harvesting is at about $10k so far this year.

But here's where it gets interesting. We also keep a chunk with a robo-advisor. That one we have configured high-risk (including up to 10% crypto). That's up 13.73% (including $37k in tax loss harvesting). That's 50% US stocks, 18% foreign devleoped markets, 15% emerging markets, 10% crypto, 3% US bonds, 3% foreign bonds.

I'm not saying an advisor is the best option -- it really depends on your circumstances -- but the "We'll just do it ourself and put it into a US index fund" is not necessarily the best strategy. You're missing out on returns by not sufficienctly diversifying.

VASGX or other similar index funds are absolutely highly diversified and are likely to beat your portfolio, especially with an expense ratio of .14.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Fidelity Investments is a very good co that’s family run by the Johnsons. They’ve never been part of a major scandal in 80 years in business. I wouldn’t know the first thing in how to invest money so I leave it up to the experts. They take a percentage, the more money you have with them the smaller the percentage.

This is not good advice. If you are going to use an advisor, use an independent advisor (known as an RIA), not one who works for the funds they want to sell you. I guarantee PP's funds are in a bunch of Fidelity funds, even if there are better non-Fidelity options out there.

I couldn’t trust an independent advisor. It’s too easy for them to run a pyramid scheme or steal some of your money. Investment companies sometimes have thieves working there as analysts but it’s rare and you’re covered by a billion dollar company.

DP. You don’t have to have them manage your money. You can get a plan and follow it. Heck, you could check in 6 months later, instead of a year, or even quarterly. It’s still way cheaper than .08-1%

[Anonymous]

Vanguard PAS, PAS Select, or Wealth Management are the answers for most people, with fees starting at 0.3% of assets under management (AUM) and decreasing (as a percentage) with increasing portfolio size. You will have professional portfolio construction and management and advice from qualified advisors who are not paid on commission. They will not manage, but will take into consideration, non-Vanguard assets in your portfolio, so you'll benefit from holistic analysis of your situation. You can obtain advice whenever you need it, but it will by by telephone or by video, not in person. The portfolio you'll have will not be overly complicated, will be tax-efficient, and won't be hard to unwind if you choose to leave the service and go in another direction in the future.

There is no reason to pay anywhere near 1% of AUM, and firms with that kind of fee typically construct complicated portfolios which are difficult to understand and to simplify if you leave them. Those kinds of portfolios also often have a lot of churn, generating excessive capital gains and tax liabilities. You'll often be put into proprietary mutual funds or ETFs with high expense ratios, further increasing your costs and depressing your returns, and it's not unusual to also be put into a large number of individual stocks, negating the principle of wide diversification to reduce risk.

https://investor.vanguard.com/advice