Fidelity Portfolio Advisors
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Fidelity Portfolio Advisors
Posted by MikeD on 6/25 at 8:35 pm
I recently got a call from Fidelity (where I keep my investments not including company 401k) about converting my investments to their Porfolio Advisory Service. It is basically an active manager that manages my investments.

I currently have a grab bag of stocks and mutual funds with no real rhyme or reason other than tips, stuff I read on here and companies I do business with. My mutual fund investments have done OK but stock picks have been pretty rough. I have done a great job in saving but not really got to where my investing side has matched this performance.

I would be paying 1.14% of the my portfolio in management fees. I'm pretty sure I'm paying the management fee on top of mutual fund fees. Their pitch said they save an average of 1.9% in taxes based on their account managers' decisions.

What are everyone's thoughts? Is this 'tax savings' realistic? Should I expect better performance with more active account management?



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Posted by ThaBigFella on 6/25 at 8:59 pm to MikeD
Can you purchase coca cola,Exxon, procter gamble,chevron,att,johnson and johnson,mcdonalds,walmart,pepsi and Phillip Morris on your own? They're going to charge you 1%+ to do that for you. If you value your money I'd say just buy an index fund, if you wanna be proactive you could just do it all on your own


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Posted by MikeD on 6/25 at 9:04 pm to ThaBigFella
Yeah I suppose I could but I seem to end up with a much more random and high risk portfolio of stocks.


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Posted by fishfighter on 6/26 at 4:44 am to MikeD
quote:

I could but I seem to end up with a much more random and high risk portfolio of stocks.


That is the problem. High risk stocks just blow the big one. If a stock doesn't pay a dividend, screw it. High risk stocks are like betting all on red or black. Yes, sometimes they can make money, but they can loose too! Long term, I see no reason of owning them.



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Posted by Vols&Shaft83 on 6/26 at 6:30 am to MikeD
I'd tell that portfolio advisor to suck my balls and do a thorough taint analysis. "Tax savings" will justify the fee? My ass.

Do what TheBigFella says, and don't buy anymore individual stocks until you learn about how to evaluate them on your own. Read some Ben Graham, study investopedia.com, invest time in growing your financial education and you'll outperform that portfolio advisor and keep the fees for yourself.



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Posted by RebelOP on 6/26 at 7:21 am to ThaBigFella
quote:

Can you purchase coca cola,Exxon, procter gamble,chevron,att,johnson and johnson,mcdonalds,walmart,pepsi and Phillip Morris on your own? They're going to charge you 1%+ to do that for you. If you value your money I'd say just buy an index fund,


So every managed portfolio has exactly these stocks in each one??? You can't tell someone to just got buy an index fund there is way to much more to consider.

There are advantages and disadvantages of having a actively managed portfolio. I'm not a fan of Fidelity because I would rather deal with a real person than someone over the phone.

quote:

if you wanna be proactive you could just do it all on your own

Companies spend millions on analysts and researchers who all day long watch trends, companies, earnings reports, etc.... A lot of people don't even want to deal with that kind of stuff. The fee helps both parties, the more you make the more they make so there is incentive to have the portfolio perform well, while your not having to do all the research/buying/selling/re-balancing.

OP I would tell you to maybe look at someone local that you can call up personally and go see or talk to. I wouldn't feel comfortable just calling a 1-800 number for my investment portfolio's. I like talking to an actual person and knowing I can give my guy a call when I need him.


This post was edited on 6/26 at 7:22 am

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Posted by ThaBigFella on 6/26 at 7:25 am to RebelOP
Umm the bulk of most managed funds is just that.... Unless you're seeking some small cap high risk,high reward return and seek out that specific manager who is after that. Fidelity advisors will take your money and buy what you could have on your own. Over 1% fee plus etf fees? Wow


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Posted by RebelOP on 6/26 at 7:31 am to ThaBigFella
ETF fees? Does Fidelity charge this in addition to the %?? Every fee based account I've ever heard of never charges anything but the fee.


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Posted by ThaBigFella on 6/26 at 7:53 am to RebelOP
thats what the OP stated....I dont have any managed funds so I know nothing on the matter.


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Posted by Oenophile Brah on 6/26 at 8:27 am to MikeD
I don't use Fidelity so I'm not aware of their success rate. I'm with MS/ Smith Barney in their Track System. It's the same idea, they have different risk levels and the fund is operated based on your tolerance. I had several years of success, and they do a good job of locking in tax savings. In my experience.

That being said, those fee's are a tad higher than mine. I'm charged less but I'm grandfathered in with a lump family account.

Most of these funds have high minimums and the fees decrease as the size increases.



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Posted by Janky on 6/26 at 8:29 am to RebelOP
quote:

ETF fees? Does Fidelity charge this in addition to the %?? Every fee based account I've ever heard of never charges anything but the fee.


Are you sure? You may want to check on that. I have been in the business for 12 years and never heard of this. I have heard of refunding 12-B1 fees back to the client if we are forced into a load waived A share. The FA does not have any control over fund/ETF fees charged by the fund company.

Edited to address the posts below.


This post was edited on 6/26 at 8:33 am

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Posted by RebelOP on 6/26 at 8:29 am to ThaBigFella
ETF fees are for ETF's, not Mutual Funds. Fee-based accounts use institutional share classes which have a significantly reduced operating expense than the Class A, B, and C shares the DIY investor has access to. So yes there are charges on top of the annual 1% or whatever they charge, but it's very minimal compared to the A,B,C share classes.

I'm not saying one is right and one is wrong, but it's at least worth the OP looking into especially if he doesn't want to sit around researching funds/stocks or whatever else he wants to buy inside his account.






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Posted by RebelOP on 6/26 at 8:39 am to Janky
When I first saw this, I was under the impression that they would charge the annual % PLUS any ETF commissions on trades. Which would just be completely unethical. But yes, the fee's of the funds would still be included as stated in my prior post.




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Posted by Broke on 6/26 at 8:45 am to MikeD
quote:

Their pitch said they save an average of 1.9% in taxes based on their account managers' decisions.


Wildest pitch I've ever heard. I would run from this broker.



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Posted by MikeD on 6/26 at 8:22 pm to Broke
Thanks for the advice guys. In my job, I cannot monitor the market during the day and honestly I don't think I can put in the time to research stuff like I should or need to.

The 1.1% fee includes all trades and management but any expense ratios in mutual funds will be added on top. The 1.9% in tax savings was not mentioned this afternoon when he called this afternoon.

Does anyone see value in using investing professionals for non-experts and non-active traders?



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Posted by Janky on 6/26 at 9:13 pm to MikeD
quote:

Does anyone see value in using investing professionals for non-experts and non-active traders?


Yes. Fidelity, no.



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Posted by RebelOP on 6/26 at 10:15 pm to Janky
quote:

Yes. Fidelity, no.


Agreed, you need to get a hold of someone. No 1-800 number is going to solve your problems. Ask several of your closest friends who they use. Do research on their firms and make sure they and their staff are well credentialed.




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