Hmm. I have 15M in my stock portfolio and never paid anyone to get to that point. You and I don't sound like day-traders, so I think you should be learning and doing on your own, OP. I buy and sell rarely (a few times a year), and do not check my portfolio obsessively, since I value my cardiovascular health.

If the special administrative hoops prove too much for you, then find someone cheaper.

Anonymous wrote:It should never be more than 1%. But I agree asset under management fees are generally not worth it unless you really are allergic to doing this yourself, in which case, I would just go with Vanguard Personal Advisors or similar, which runs 0.30% for all index to 0.40% for mix of indexes and individual investments.

But at $750,000 you can do it yourself. The clearance list would not be an issue for a broad based index fund like the S and P 500, so you wouldn't need to worry about that. If you need bonds, you can do a government bond fund, which also should not need clearance. So I don't think that service is worth much. And really, why does anyone need to invest outside of these indexes unless it a hobby or passion (clearly not your case)?

A backdoor Roth is super simple and takes very little time once a year through an account at Vanguard, Fidelity, or Scwab. Google whitecoatinvestor backdoor Roth for step by step instructions.

I would move everything at once to Vanguard or the other two. Pay for the really cheap personal advisor option and drop it once you are comfortable doing everything on your own.

Op here. Really good advice. Thank you!

Anonymous wrote:Its fine, OP, everyone I know that works for a big 5 pays a financial advisor to handle their money, it's so much easier.

Op here. That’s exactly it. However, I’m wondering if we can just negotiate a lower fee, like someone else suggested at .85%.

Anonymous wrote:18:16 here again.

I used the Schwab investment fee calculator to see how much the fees would cost you at the end of 20 years using the following assumptions: $750,000 starting balance, no additional funds put in, 7% returns.

You would have $450,000 (about 16%) less in the account charging 1.25% than in the one charging 0.3%. DIYing with no investment fee would give you greater than $600,000 more.

It saving would be even greater of course if you are annually putting in funds over that period.

https://www.schwabmoneywise.com/investment-fees-calculator

Op here. Wow! This is really eye opening. Thank you!

Anonymous wrote:An advisor is not there to lose your money. They go safe, but your money is lost to inflation and fees.
Can you find 2019 annual return? Not 'since', but just for 2019.

OP here. In 2019 it was 20.8%.

18:16 here again.

I used the Schwab investment fee calculator to see how much the fees would cost you at the end of 20 years using the following assumptions: $750,000 starting balance, no additional funds put in, 7% returns.

You would have $450,000 (about 16%) less in the account charging 1.25% than in the one charging 0.3%. DIYing with no investment fee would give you greater than $600,000 more.

It saving would be even greater of course if you are annually putting in funds over that period.

https://www.schwabmoneywise.com/investment-fees-calculator

Its fine, OP, everyone I know that works for a big 5 pays a financial advisor to handle their money, it's so much easier.

An advisor is not there to lose your money. They go safe, but your money is lost to inflation and fees.
Can you find 2019 annual return? Not 'since', but just for 2019.

It should never be more than 1%. But I agree asset under management fees are generally not worth it unless you really are allergic to doing this yourself, in which case, I would just go with Vanguard Personal Advisors or similar, which runs 0.30% for all index to 0.40% for mix of indexes and individual investments.

But at $750,000 you can do it yourself. The clearance list would not be an issue for a broad based index fund like the S and P 500, so you wouldn't need to worry about that. If you need bonds, you can do a government bond fund, which also should not need clearance. So I don't think that service is worth much. And really, why does anyone need to invest outside of these indexes unless it a hobby or passion (clearly not your case)?

A backdoor Roth is super simple and takes very little time once a year through an account at Vanguard, Fidelity, or Scwab. Google whitecoatinvestor backdoor Roth for step by step instructions.

I would move everything at once to Vanguard or the other two. Pay for the really cheap personal advisor option and drop it once you are comfortable doing everything on your own.

I have met with one a few times who wants to charge us 1.45%. He also shared that he would like us to consolidate several accounts to get a better rate of return, and that he does sometimes get a commission when clients invest in certain products.

Ours is 1%, and he does a great job.

I just checked our Fidelity account - self-managed 401k, mix of stocks and mutual funds - and our annualized rate of return since 2019 is 14.8%

Our Vanguard account, which is a basic mix of Vanguard mutual funds - 8.6%

fwiw

That’s a high % fee. You should be able to negotiate it down to around .85% (maybe less if you’re really persistent). You could certainly be paying less in fees overall if you paid on hourly basis. All depends on what the advisor is doing for you and the peace of mind it gives etc.

I think advisors who charge a % of “assets under management “ are a ripoff.

Most of the industry has gone that way, however because it is so profitable for them.

We’re currently paying our financial advisor (a fiduciary) an annual 1.25% fee and we have $750k in total assets in our portfolio. It’s a mix of stocks, index funds, etc. His fee is full service and includes handling of our backdoor Roth IRAs each year and our kids’ 529 plans, and he calls us when he wants to buy/sell (if any of this is relevant).

Due to my husband’s job, every fund and entity within that fund has to be pre-cleared through a database (which our advisor handles on our behalf). We could technically do this ourselves, but it’s a bit overwhelming and TBH I don’t understand a lot about investing. Our average annualized rate of return since we started with him in 2018 is 7.4% and 8.7% since 2019.

I keep reading on here about everyone managing their own money or using fee only advisors, and can’t help feeling like we’re overpaying. For example, we just checked the Schwab S&P 500 index fund, which isn’t restricted, and it looks quite promising at a fee of only .5%. I’m tempted to put $50k of cash into it to see how it performs vs giving it to him.

Given the pre-clearance requirements, his fee, the value of our portfolio, and ROI, should we look into other options for managing our money? I often read about fee only advisors but am at a loss. WWYD?