I echo the PPs and your own position OP. You are paying too much. Review the services Vanguard offers gratis or at reduced rates for the Voyager Select level of assets invested, which you would be if you moved the entire amount over. I am sure there is a deal for CFP services. They do offer active management as well, so you could throw DH a bone.

Anonymous wrote:Big waste of money paying a money manager. He probably has you in lots of high actively managed funds with high expense ratios too. Get rid of him and move everything into low cost index funds at Vanguard.

If you do want to use a financial adviser, use one that works for a fixed fee, rather than a commission based on the value of your assets. Meaning, it might be worth it to pay someone $1000 or so once a year to look over your investments and to determine if you should change anything rather than pay someone 1.25% of your assets forever to manage your money.

Good fee based advisors don't do one-time reviews. They work on a quarterly retainer that typically runs about as much as AUM in the end--minimum $1,000 a month. Otherwise they'd have to have thousands of clients.

Vanguard advisors are great, and cost nothing if you have $500K (or maybe its $1M) invested with them.

Helps to alleviate stress between me and my husband. I use to handle all of the investments/taxes and felt more responsibility than I needed to being "the messenger" - especially with bad news or in down times.

Big waste of money paying a money manager. He probably has you in lots of high actively managed funds with high expense ratios too. Get rid of him and move everything into low cost index funds at Vanguard.

If you do want to use a financial adviser, use one that works for a fixed fee, rather than a commission based on the value of your assets. Meaning, it might be worth it to pay someone $1000 or so once a year to look over your investments and to determine if you should change anything rather than pay someone 1.25% of your assets forever to manage your money.

Buffett has a bet with a hedge fund as to whether a low cost S&P 500 can beat the hedge fund and so far he is crushing them.

http://www.marketwatch.com/story/warren-buffett-on-track-to-win-hedge-fund-bet-2014-12-04

Anonymous wrote:

Anonymous wrote:DH and I disagree on the merits of using a private money manager that charges us 1.25% every quarter to manage our investments - mostly IRA money, vs. using a Vanguard or Fidelity type of company to do it for us thus saving on fees. We aren't high rollers, have about $800K with this guy. We've used him for 10 years. Of course our 401Ks are with the current custodian - who happens to be Vanguard.

Every day that passes, I become more and more anti-money manager. I work in Financial Services, and am the right hand person to a licensed advisor. I see what these fees add up to in our clients portfolios and boy it is a lot! I looked at our portfolio over the weekend and I would estimate that we pay our advisor around $6K per year to manage our accounts. The better the year, the higher the fees.

DH disagrees with me, thinks that its when the markets are down is when we need our advisor the most. thinks that we couldn't do better on our own - letting Vanguard or Fidelity do the management for us.

What camp are you in?

I assume you mean 1.25% annually. If quarterly that would be outrageous.

If you really want a money manager you can get one for less. I think index funds are preferable in theory, but having a manager keeps you from making stupid, emotion-driven mistakes and may get you some added services. I switched to a manager at the top of the tech bubble when I couldn't figure out what to do next. It's worked well. She charges 1% annually on only one of our accounts that is about half of our holdings of about $1.3 M.

Yes, 1.25% per year - with fees coming out every quarter.

The 1% fee usually comes into play when your accounts are over $1M. some are willing to go lower if you threaten to leave.

Anonymous wrote:I agree with others than you should not expect a FA to beat the market, especially after paying those fees. The best rationale for paying is, as PP noted, that you might do something even more stupid without him (e.g. move entirely out of stocks in the middle of a downturn).

However, 1.25% is a lot if you think of it in terms of the % of your gains (maybe 20% on average?). Kepp paying that and your total investments over 20-30 years will be reduced by 20-30%. If you have a strategy then you should be able to execute it on your own.

Also note Vanguard has CFPs (who I think have a fiduciary duty to help you, and not Vanguard) available-- either for .3% of a portfolio or a one-time time fee for a plan of about $250 (which may be waived if you move a lot of money to them).

OP here. Totally agree. I told DH that in the last 10 yrs we've probably paid him $60K? that's a nice chunk gone from our retirement.
One of our big clients just jumped ship and went with Vanguard because of their on-staff CFP.

Anonymous wrote:I would go with Vanguard or Fidelity. Their target retirement funds are basically what their financial experts think is the right mix of types of investments for people retiring close to X year--why pay someone more for their guess as to what might be the best allocation? It's very hard to beat the market in the long run, at least for individual retirement accounts without insider trading info, especially after you figure in 1.25% of fees. I doubt your guy is some sort of Warren Buffet genius. How does the return on your investments compare to similar categories of investments through Vanguard after you figure in fees? Did your investments weather the financial crisis better than index funds did? I think the answers to those questions will show you what you should be doing, and hopefully get you and your husband on the same page.

Thanks PP- those are all really good points! I compared the value of our accounts between 2007-2008 and we were down about 50%. I'm going to take a look at Vanguard to see how their funds fared during that same period.

I agree with others than you should not expect a FA to beat the market, especially after paying those fees. The best rationale for paying is, as PP noted, that you might do something even more stupid without him (e.g. move entirely out of stocks in the middle of a downturn).

However, 1.25% is a lot if you think of it in terms of the % of your gains (maybe 20% on average?). Kepp paying that and your total investments over 20-30 years will be reduced by 20-30%. If you have a strategy then you should be able to execute it on your own.

Also note Vanguard has CFPs (who I think have a fiduciary duty to help you, and not Vanguard) available-- either for .3% of a portfolio or a one-time time fee for a plan of about $250 (which may be waived if you move a lot of money to them).

Anonymous wrote:DH and I disagree on the merits of using a private money manager that charges us 1.25% every quarter to manage our investments - mostly IRA money, vs. using a Vanguard or Fidelity type of company to do it for us thus saving on fees. We aren't high rollers, have about $800K with this guy. We've used him for 10 years. Of course our 401Ks are with the current custodian - who happens to be Vanguard.

Every day that passes, I become more and more anti-money manager. I work in Financial Services, and am the right hand person to a licensed advisor. I see what these fees add up to in our clients portfolios and boy it is a lot! I looked at our portfolio over the weekend and I would estimate that we pay our advisor around $6K per year to manage our accounts. The better the year, the higher the fees.

DH disagrees with me, thinks that its when the markets are down is when we need our advisor the most. thinks that we couldn't do better on our own - letting Vanguard or Fidelity do the management for us.

What camp are you in?

I assume you mean 1.25% annually. If quarterly that would be outrageous.

If you really want a money manager you can get one for less. I think index funds are preferable in theory, but having a manager keeps you from making stupid, emotion-driven mistakes and may get you some added services. I switched to a manager at the top of the tech bubble when I couldn't figure out what to do next. It's worked well. She charges 1% annually on only one of our accounts that is about half of our holdings of about $1.3 M.

Low cost index funds. I have a master's degree in finance (quantitative) and one thing I learned is that it is incredibly hard to beat the market over time and keeping fees as low as possible will help you much more than somebody picking a portfolio for you.

Go with Vanguard or Fidelity.

I would go with Vanguard or Fidelity. Their target retirement funds are basically what their financial experts think is the right mix of types of investments for people retiring close to X year--why pay someone more for their guess as to what might be the best allocation? It's very hard to beat the market in the long run, at least for individual retirement accounts without insider trading info, especially after you figure in 1.25% of fees. I doubt your guy is some sort of Warren Buffet genius. How does the return on your investments compare to similar categories of investments through Vanguard after you figure in fees? Did your investments weather the financial crisis better than index funds did? I think the answers to those questions will show you what you should be doing, and hopefully get you and your husband on the same page.

They still get paid in down markets, complete scam. Index funds and low fees. Watch wolf of wall street if thou want insight into these people.

DH and I disagree on the merits of using a private money manager that charges us 1.25% every quarter to manage our investments - mostly IRA money, vs. using a Vanguard or Fidelity type of company to do it for us thus saving on fees. We aren't high rollers, have about $800K with this guy. We've used him for 10 years. Of course our 401Ks are with the current custodian - who happens to be Vanguard.

Every day that passes, I become more and more anti-money manager. I work in Financial Services, and am the right hand person to a licensed advisor. I see what these fees add up to in our clients portfolios and boy it is a lot! I looked at our portfolio over the weekend and I would estimate that we pay our advisor around $6K per year to manage our accounts. The better the year, the higher the fees.

DH disagrees with me, thinks that its when the markets are down is when we need our advisor the most. thinks that we couldn't do better on our own - letting Vanguard or Fidelity do the management for us.

What camp are you in?