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Should I switch to Vanguard?

Posted on 7/15/16 at 10:04 pm
Posted by Saint5446
Member since Jan 2014
823 posts
Posted on 7/15/16 at 10:04 pm
I have a solo 401k for my side business, looking to contribute about 15k yearly to it. I am 31 years old, plan currently has about 19k in assets. I also have about 14k in my full time employers plan that I am putting 9k a year in including my employer match. Total is about 24-25k in retirement savings yearly between both plans, currently have about 33k in assets between both plans. Got started a little late due to grad school and loans but starting to get rolling now. Total income between both jobs is about 180k year.

My question is this: I had a patient who is an advisor who set me up in my solo401k through invesco. I am into the following funds:
INVESCO GOVT MONEY MARKET - CASH RESERVE
INVESCO EUROPEAN GROWTH FUND -CLASS A
INVESCO ASIA PACIFIC GROWTH FUND - CL A
INVESCO SMALL CAP DISCOVERY FUND-CLASS A

I don't know a lot about reading the report sheet on individual funds, but looking at the rates of return over the past 5 years, 1 year, etc none of them have done very well at all, and actually seem to have performed badly. Don't know where to find expense ratios or what is a good amount, but i saw that one of them is like 1.5%. I know Vanguard offers much lower fees, seems to have performed much better, and seems to have a great interface to use.

The guy has now kind of become a friend although he is MUCH older than me, and I feel stuck. He is a patient and I see him every few months, has referred other patients to me, etc. I don't talk to him too often, but he checks in every now and then to see how me and my family are doing, seems to have taken a genuine interest in my life and is a little bit of a mentor when we talk. Am I getting fleeced? Are these funds ripping me off? Any input is appreciated. My balance is low enough to where it is not going to have a huge effect on my future, but I am starting to do pretty well and want to tighten up a bit moving forward.
Posted by Shepherd88
Member since Dec 2013
4589 posts
Posted on 7/15/16 at 10:16 pm to
Everyone on here will tell you to move your shite to Vanguard.. I'll be the first to say that Invesco is a pretty stellar company, their fees are a bit higher than most but for the most part they justify them.

Having said that if what you posted is your allocation, then in my opinion it's pretty aggressive and heavy international. I would have a sit down meeting with your advisor and pick his brain on what direction he's trying to take this based on your goals and then maybe get a second and third opinion.
Posted by Saint5446
Member since Jan 2014
823 posts
Posted on 7/15/16 at 10:30 pm to
Good to know. I think he based it off of diversifying me a bit from what I have at my salary job, which is a craptastic array of funds to choose from but a 4% match.
Posted by Fat Bastard
coach, investor, gambler
Member since Mar 2009
72682 posts
Posted on 7/16/16 at 9:02 am to
quote:

CLASS A
\



quote:

CL A




quote:

CLASS A


Posted by DzNtz
BR
Member since Oct 2007
684 posts
Posted on 7/16/16 at 10:02 am to
Can you elaborate in your distaste for class a? My wife has some class a in her 401k recommended by her advisor. I'm not familiar with them but was shocked by the fees associated with these funds. What's the skinny in these?
Posted by Janky
Team Primo
Member since Jun 2011
35957 posts
Posted on 7/16/16 at 10:27 am to
Usually class A funds have a big front load. The ones in your wife's 401(k) are probably load waived.
Posted by Saint5446
Member since Jan 2014
823 posts
Posted on 7/16/16 at 12:42 pm to
This is why I don't always trust financial advisors. I am a medical professional and have no idea about these things and I feel like they try to put you in self-serving shite a lot of the time. Not trying to generalize but in my two experiences with finance guys that has happened to me, which is why I was thinking about just saying screw them and rolling with Vanguard.
Posted by Janky
Team Primo
Member since Jun 2011
35957 posts
Posted on 7/16/16 at 2:13 pm to
I am one of those financial guys, but I am 100% fee based so we are on the same team.
Posted by meeple
Carcassonne
Member since May 2011
9377 posts
Posted on 7/16/16 at 5:01 pm to
quote:

This is why I don't always trust financial advisors. I am a medical professional and have no idea about these things and I feel like they try to put you in self-serving shite a lot of the time. Not trying to generalize but in my two experiences with finance guys that has happened to me, which is why I was thinking about just saying screw them and rolling with Vanguard.


This is me right now. On my second one and I just don't think he gives a flip. I'm doing better managing my company 401k... I'm slaying his returns, and I don't have any idea what I'm doing.

I'm on the verge of making the call to him and let him know I'm pulling out and going to Vanguard.
This post was edited on 7/16/16 at 5:02 pm
Posted by Costanza
Member since May 2011
3151 posts
Posted on 7/16/16 at 5:05 pm to
Do it. Doesn't necessarily have to be held with Vanguard, as you can buy most vanguard funds when your money is with another brokerage (TD Ameritrade, ScottTrade, Etrade, etc.) Just go for broad index funds with low fees. Set and forget.
Posted by Janky
Team Primo
Member since Jun 2011
35957 posts
Posted on 7/16/16 at 5:29 pm to
quote:

This is me right now. On my second one and I just don't think he gives a flip. I'm doing better managing my company 401k... I'm slaying his returns, and I don't have any idea what I'm doing.


I hear what you are saying, but there may be reason why you are beating him. Advisors have to gauge one's risk tolerance and invest accordingly. Sometimes you are asked questions and scored. If your risk tolerance comes out to be moderate or balanced and that is how he has you invested, but in your 401(k) you may be 100% aggressive and in all equities. Then when the market rips like it is right now you will win. I am not saying this is the case, but you need to make sure you are comparing apples to apples.

I had a client 2 years ago complain because he was beating me. I looked at his other account and he had 60% in the T Rowe Price healthcare fund which was killing it at the time. I explained to him that there is no way I could or would have all of that money in a sector fund.
Posted by Saint5446
Member since Jan 2014
823 posts
Posted on 7/16/16 at 7:22 pm to
The next question is with 20k in assets to put into it, which vanguard funds do you guys like? VSTMX?
Posted by ynlvr
Rocket City
Member since Feb 2009
4591 posts
Posted on 7/16/16 at 9:04 pm to
Keep it simple. If Vanguard . . .

VSTMX. $10k
VGTSX. $4k
Total Bond $6k
Posted by Fat Bastard
coach, investor, gambler
Member since Mar 2009
72682 posts
Posted on 7/16/16 at 9:43 pm to
yes vanguard is great. switch over. no loads, no annual fees among other things.

some funds i have done great with are

VGHCX

VGSLX

VPU
Posted by Janky
Team Primo
Member since Jun 2011
35957 posts
Posted on 7/16/16 at 9:50 pm to
Vtmsx is decent and vwinx is good on a conservative basis. Make a mix.
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