SEP vs Single 401k? Thinking of a managed account...

1.5% means you're paying him first, instead of yourself. You can do a soloK without paying an advisor. "Professional" management of your money is pointless, unless you have a huge pile of it. Pick a few balanced funds and forget,about it, keep your percent and a half.

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1.5% means you're paying him first, instead of yourself.

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Well, I started off with American Funds and thinking why the hell am I paying 5.75% front load (I have a ROTH through Northwestern Mutual and he put me in AF). But since I am looking to put the max I can for a single 401k I want the fees to be as small as possible and so 1.5% sounds a lot better than 5.75% + the other stuff AF charges. Also the managed account is transparent so I know everything as far as fees up front. I know you're saying the way to get the least in fees is do it myself but $50k+ a year is a lot of money, you're saying there's no value in a managed account? I should just put it in a balanced fund and hope for the best? Believe me, I'd rather keep the $1,500 per $100k so I am just thinking of every avenue and researvhing. I guess the question is can a managed account make that $1,500 look like a small fee and I get better returns than I would on my own?

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Will the 401(k) have a Form 5500 filing requirement, and if so does the $350 per year for the TPA cover the filing?

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I believe so, I need to make sure, but I think I remember him saying the TPA would file forms, etc.

His fee is included in the 1.5% as he is putting me in a managed account with SEI. He told me that's the fees total other than the $25 a year account fee and the TPA fee if I do 401k, but I want to see if I actually have to pay someone to be the TPA as well.

I used SEI as an advisor at one point. I have yet to find a third party advisor that is worth the hassle. You can probably build a decently allocated ETF portfolio that will do as well or better. Good luck.

I have not but they all seem to have a hook like that. Good harbor was the last one I looked at and the fact sheet looked great. Actual performance was garbage.

ETA: why are they in cash? Is it because they see something or is it a seasonal strategy?

So they saw something and it's not a seasonal decision. Gotcha.

Good luck.

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You can probably build a decently allocated ETF portfolio that will do as well or better. Good luck.

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Thanks. I tried calling Fidelity but it was too late and they were closed. I will try them and Vanguard since I have accounts at both. I think I saw that Vanguard can do the 401k with Roth contributions but Fidelity doesn't have that, not sure if true. A good option if I want to use it. A part of me wants to do it on my own and feels like I will do fine using one of Vanguards or Fidelity's funds, but then part of me says what if I don't? The 1.5% being paid out could be small potatoes if the return I get from a managed account is much better than what I would have done. I would simply choose a MF and hope it works out. My biotech fund has shite the bed all over this last few months. The healthcare fund I have was doing shitty for months but it's been a little better than the bio. I was up over 50% with FBIOX and now it's only up 6%. Of course, I haven't lost or gained anything as I'm not selling it yet. But it certainly was much better seeing my account with a lot more money

I guess I don't know if I want to put all of my retirement/investment $ on my hands and I'm hoping someone that gets paid to do this for a living could show me better returns or make sure I don't lose too much when the market is down or correcting. When you say I can build a decently allocated ETF portfolio, my thought was, "I can?" I really don't know enough about investing to put hundreds of thousands on the line. Not that I would just lose it obviously, but I don't want to make amateur mistakes either and I don't have enough time to learn all the ins and out of investing. Plus, I have to make my decision in the next few weeks as this tax year is wrapping up quickly. I hope talking to the Fidelity and Vanguard folks will maybe help the decision.

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If an advisor had ideas or strategies that consistently beat the market, he wouldn't be messing around with your initial 401k setup in the first place. Additionally, if you expect him to limit your losses in a down market, you're probably expecting too much.

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He's not managing the money, he's putting me in to a managed account so he's not claiming to have strategies that beat the market, he is saying this managed account has all the best people on it blah blah so I don't know if it's any different or not.

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However, if you're a skittish investor and you don't trust yourself, 1.5% isn't the worst thing in the world. If it takes a managed account and 1.5% for you to follow through with relatively basic investing, then so be it, especially if the alternative is that you'll be stressed out and moving your money in and out of the market over the next 30 years while doing it on your own.

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I definitely don't consider myself skittish, maybe to a fault. Like I said, I have watched FBIOX drop about 45% over the last few months and I have stayed with it. I've had Apple since 2008 and bought more right before it took a dive in 2012 and bought some more when it dropped to about $385 (after having bought months earlier for $685). I still hold all my Apple shares even though I wanted to sell a few times I do want to just put this somewhere and not have to watch it too much but of course I want it go grow. If the market is bad and I'm not in a good fund or whatever, I won't really know that other than the market price being low. But as in the examples above I just left it in there figuring it will "come back up eventually". Maybe that's bad though? Not for Apple but for funds?

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However, there is an overwhelming portion of the public that has absolutely no clue what they're doing, and they'll gladly pay 1.5% annually for someone to sit there and hold their hand through it all.

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I like to be shown and then I can do it on my own. I do like the idea of having someone help, but if you're saying CFP's bring nothing other than hand holding than I guess I really don't need to give away 1.5%.

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but I sometimes I liken financial advisory services to having your oil changed at a service center.

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It might not be the best analogy but I like it perfect. My dad will change his oil every time. I said frick it and I'll just pay $20 for someone to do it if I couldn't get him to do it when I was younger

I do prefer for someone else to do the "dirty work". But that's maybe where the analogy doesn't fit, is there any dirty work here?

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most advisors stick to the investment basics, and get paid to be the calm, steady presence that many investors need.

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I guess I'm just hoping someone with a lot of experience can bring more to the table than my barely know anything about investment self. By that I mean better returns or less of a hit when in a down market. What it sounds like from the few of you who have replied is "their guess is as good as mine". So why pay someone 1.5% for that? I am leaning towards that feeling now.

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You may want to explore target-date retirement funds from Fidelity and/or Vanguard if you choose to go on your own. They're sort of a jack of all trades, master of none type of approach, and what they lack in customization, they make up for in fees.

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Yeah, that's what I figured I'd look into. I have that with a 401k from an old employer that has done fairly well since I left that company. I'm 40 now and want to retire in 15 years so I may set it a little more aggressive at first if I go that route. Vanguard may be the way to go if Fidelity doesn't allow for the 401k and Roth contributions. I just know this year I need to go as much as possible and so the SEP isn't right for me. It may be going forward so depending on the TPA stuff maybe I'll switch to a SEP. Do you have a SEP or 401k?

Thanks