S/O How to fire our financial advisor

[Anonymous]

I have been trying to convince DH for the last couple of years that we need to let our FA go. Great guy, he's been our advisor for 10 years.

I first thought about letting him go a couple of years ago when I sat down and added up all the fees we've paid between the both of us over the last 10 years. I'd say out of my retirement account alone I've paid $24,000 in fees. DH more because he has more in his account.

I got nauseous when I saw how much we've diluted our retirement accounts by, just with fees!

Then I watched/listened to Warren Buffett's Letter on CNBC a couple of weeks ago and was even more convinced that we need to do this now! I think that DH is finally on board also - thank God.

So, how do I go about firing our FA and getting our funds moved over to Vanguard? We both already have separate investment accounts with Vanguard, I really like them so this is the company I want to go with.

Also for those who use Vanguard to manage your funds, do you use their Personal Advisor Service or just put the money into Index funds?

[Anonymous]

I'm not saying keep him, but you're only looking at the fee side of the equation. Has the FA outperformed the market? This is an easy enough analysis to do -- look at the ROI on your managed fund over the last 10 years and compared to the Vanguard funds. If you exceeded Vanguard, then the $24,000 may have been money well spent.

Note: Usually, actively managed money doesn't outperform index funds. But there are certainly exceptions.

[Anonymous]

Anonymous wrote:I'm not saying keep him, but you're only looking at the fee side of the equation. Has the FA outperformed the market? This is an easy enough analysis to do -- look at the ROI on your managed fund over the last 10 years and compared to the Vanguard funds. If you exceeded Vanguard, then the $24,000 may have been money well spent.

Note: Usually, actively managed money doesn't outperform index funds. But there are certainly exceptions.

OP here - do you mean look at my overall performance of my account over the last 10 years?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm not saying keep him, but you're only looking at the fee side of the equation. Has the FA outperformed the market? This is an easy enough analysis to do -- look at the ROI on your managed fund over the last 10 years and compared to the Vanguard funds. If you exceeded Vanguard, then the $24,000 may have been money well spent.

Note: Usually, actively managed money doesn't outperform index funds. But there are certainly exceptions.

OP here - do you mean look at my overall performance of my account over the last 10 years?

Even if by some miracle the OP has managed to outperform the market after fees based on their FA's recommendations I would still get rid of them. Just because someone has beat the market in the past doesn't mean that they will outperform in the future. There is a reason that the SEC mandates in all disclosures that "past performance is no guarantee of future results"

[Anonymous]

Who are you with? Asking because I dated a FA years ago (with Edward Jones) and he was a total hack. Fee structures are different depending on whom you're with too.

[Anonymous]

I'd say go with a fee-only certified financial planner. We had a FA and moved and were seeking someone local. We decided to go with the financial planner, and while we paid a bunch up front (2K), she gave us action steps and told us how and what to invest in in Vanguard. I've moved all of our accounts (were in Franklin Templeton) over to Vanguard. She told us to avoid the personal advisor service as she was telling us what to do. And, she told us what to do in teh future should we have more money to invest in in the coming years. We can touch base with her every couple of years for much less than the 2K. She said to avoid the FAs because of what you state - the fees - and she showed us exactly how much money we would have paid staying in Franklin TEmpleton vs. moving over ot VAnguard, which performs the same.

[Anonymous]

Anonymous wrote:Who are you with? Asking because I dated a FA years ago (with Edward Jones) and he was a total hack. Fee structures are different depending on whom you're with too.

OP here - we are with an advisor in a different state where we used to live. Not part of a large company like Edward Jones.

[Anonymous]

Just tell vanguard you want to switch. They will fill out paperwork to transfer all of your investments (in funds, stock do not liquidate them!!) to a vanguard account. You will never have to talk to your FA again.
I wish I could do this, but I use a good Friends's husband, and I pay him an absurd amount and it kills me each month to get the statements. He's not beeen doing great for me either, so basically the only one making much money is him.

[Anonymous]

First if all, you get nauseated, not nauseous.

Second, do the math and show it to DH. The fees alone should wipe out any "extra" gains from the planner's incredible financial savvy.

I say this as an MBA from a top 20 school who would post the stock picks of the finance team vs a dart board pick every quarter, and the dart board pick beat "knowledge" of the market every time.

Lastly, agree just go to vanguard and ask them to help you transfer.

[Anonymous]

Anonymous wrote:First if all, you get nauseated, not nauseous.

Second, do the math and show it to DH. The fees alone should wipe out any "extra" gains from the planner's incredible financial savvy.

I say this as an MBA from a top 20 school who would post the stock picks of the finance team vs a dart board pick every quarter, and the dart board pick beat "knowledge" of the market every time.

Lastly, agree just go to vanguard and ask them to help you transfer.

your advice would have been so much more appreciated if it wasn't laced with so much self-righteousness. Or did I get term wrong as well? You certainly are a few rungs above me given your Top 20 School MBA. I beg your pardon. please forgive me. I mean....wow.

[Anonymous]

You can't take a grammar correction on an anonymous forum? When else would anyone tell you that you are using the word incorrectly?

And I said the top 20 MBA school thing because I wanted you to know I have at least some idea of what I'm talking about when it comes to the stock market. Again, this is an anonymous forum; you don't know who's telling you what.