Letting go of Fee-Based Advisor

[Anonymous]

We've been with our same Fee-Based advisor for many years. Our portfolio has done well, that said I don't really have anything to compare it to so don't know if another advisor might or might not get the same types of returns for us. I also cringe whenever I see our quarterly statements and see the fees we're paying. Not that I expect money management to be "free", but I can't help but wonder if moving our money to a Fee-Only advisor is a better/smarter alternative. Or should we self-manage?

We've got another 10-12 years before we plan to retire or semi-retire.

[Anonymous]

No insight to offer but we are considering the same thing. And we can't say our portfolio has done particularly well - the performance seems roughly the same as an index fund. Hate seeing the fees we're paying. Have been researching using personalcapital.com and considering self-management.

[Anonymous]

Anonymous wrote:No insight to offer but we are considering the same thing. And we can't say our portfolio has done particularly well - the performance seems roughly the same as an index fund. Hate seeing the fees we're paying. Have been researching using personalcapital.com and considering self-management.

OP here - I'm assuming there's some kind of fee structure with using the Personal Capital software? Or do you pay a one-time fee to purchase the software?

I made the mistake of enlightening myself on exactly how much we've paid in total fees over the past 15 years with our same advisor, and how much more we would have in our portfolio had we not paid those fees

[Anonymous]

Do you mean your current advisor is charging a % of managed assets? What is your %?

[Anonymous]

Anonymous wrote:

Anonymous wrote:No insight to offer but we are considering the same thing. And we can't say our portfolio has done particularly well - the performance seems roughly the same as an index fund. Hate seeing the fees we're paying. Have been researching using personalcapital.com and considering self-management.

OP here - I'm assuming there's some kind of fee structure with using the Personal Capital software? Or do you pay a one-time fee to purchase the software?

I made the mistake of enlightening myself on exactly how much we've paid in total fees over the past 15 years with our same advisor, and how much more we would have in our portfolio had we not paid those fees

Personal Capital is free to use for just analysis and they have advisors available if you opt to use them. My big hesitation is plugging in all my account username/pwds.

You are brave, I am afraid to do the math on that!

[Anonymous]

Anonymous wrote:Do you mean your current advisor is charging a % of managed assets? What is your %?

yes, he's charging a quarterly fee based on the value of our total investments. we're at 1.25%. we end up paying a few thousand a year, if i were to add up all the quarterlies. over 15 years, that is a big pill to swallow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do you mean your current advisor is charging a % of managed assets? What is your %?

yes, he's charging a quarterly fee based on the value of our total investments. we're at 1.25%. we end up paying a few thousand a year, if i were to add up all the quarterlies. over 15 years, that is a big pill to swallow.

We use an adviser also, and we're at 0.75 or 0.8% -- 1.25% is high. Is he independent (like not at a company that also sells their own funds)?

You can always meet with him to ask him to justify his fees. To us, the fees are made up just by them doing tax loss harvesting and portfolio rebalancing, both of which I could do, but would honestly never get done if it was on my list.

Then the added value is on the advisory side. We meet with our advisers once a quarter, and use them for advice on tax minimization, college planning, retirement, plannning, estate planning, and trust planning. If you're not using them for this (all of this is included in the existing fees), then you're not getting the value you could from your adviser.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you mean your current advisor is charging a % of managed assets? What is your %?

yes, he's charging a quarterly fee based on the value of our total investments. we're at 1.25%. we end up paying a few thousand a year, if i were to add up all the quarterlies. over 15 years, that is a big pill to swallow.

We use an adviser also, and we're at 0.75 or 0.8% -- 1.25% is high. Is he independent (like not at a company that also sells their own funds)?

You can always meet with him to ask him to justify his fees. To us, the fees are made up just by them doing tax loss harvesting and portfolio rebalancing, both of which I could do, but would honestly never get done if it was on my list.

Then the added value is on the advisory side. We meet with our advisers once a quarter, and use them for advice on tax minimization, college planning, retirement, plannning, estate planning, and trust planning. If you're not using them for this (all of this is included in the existing fees), then you're not getting the value you could from your adviser.

Using a balanced fun or a Target Retirement fund achieves the rebalancing for far, far less money. Have you really run the numbers on how often they are TLH? I find it happens less frequently than many think.

[Anonymous]

Find an hourly financial advisor with at least 10-15 years of experience, i.e., someone who has been through up and down cycles. There aren't many but they are around.

[Anonymous]

The assets under management (AUM) payment method is lucrative for the financial advisor, especially if you are not meeting with the person periodically on related financial issues. If it has been steady state for a while and the asset allocations have not changed (much) then I'd do it myself and ditch the advisor.

[Anonymous]

I think the AUM approach can be useful for people with more money than sense. Do you fit into this category?

[Anonymous]

Teach yourself about personal finance, Google the Three-Fund Portfolio, and ditch the adviser, who is probably looking forward to his yearly trips to Cancun on your dime.

[Anonymous]

We have one though whether we should keep one is debateable. However, one thing to note is that the use of this advisor allows us to buy funds with institutional shares that have much lower fees. So say 0.05% instead of 0.30% or something like that. So the 1% we're paying may be more like 0.8%. Area there other ways to get into those type of shares without advisor (or having multi-million to hit those fund limits to get institutional shares)? It doesn't net a positive return but it does make the "fee" smaller in reality for analysis purposes.

[Anonymous]

In the same situation. I have successfully gotten the fee reduced to the fee from 1.25 to 1% by telling him I have been asking around and that seems to be what everyone I know is paying.

[Anonymous]

Anonymous wrote:We have one though whether we should keep one is debateable. However, one thing to note is that the use of this advisor allows us to buy funds with institutional shares that have much lower fees. So say 0.05% instead of 0.30% or something like that. So the 1% we're paying may be more like 0.8%. Area there other ways to get into those type of shares without advisor (or having multi-million to hit those fund limits to get institutional shares)? It doesn't net a positive return but it does make the "fee" smaller in reality for analysis purposes.

The fees on vanguard index funds are close to zero anyway. You can’t save much on VOO 0.04 percent...
But if it makes you feel better about your advisor, then fine...