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Started By
Message
Need help with mom's finances + potential financial advisor issue
Posted on 1/19/26 at 7:50 am
Posted on 1/19/26 at 7:50 am
I have some basic retirement investments so am not completely and totally ignorant, but don't know enough to really have answers for this situation. My mom is 70 and is very scatterbrained. She's kinda dumb in general but absolutely so with finances. She hasn't worked in decades and scrapes by living just on a meager pension left behind by her deceased husband. I was visiting her yesterday and she said she got a new financial advisor because she didn't like the last couple she tried. I was looking over the paperwork and was shocked at the fees. It looks like she's charged a 2% fee annually based on the amount in the portfolio. Then she is also charged 20% on any gains. I don't have it with me so unclear if that is on a regular type basis of unrealized gains, or if that is only if/when she cashes out. Still though...that seems shockingly high considering you could just park it in a brokerage and not pay regular fees. It's my understanding that outside of some money in checking and savings this is all the money she has, most of which was inherited from her mother's passing. It's around $60K. She will not be contributing to it and wants to simply put it somewhere where it can be safe and grow until she dies, which is presumably why she wanted to trust it to a professional in the first place.
She also sent me the breakdown of the portfolio which is below. The percentage is the allocation in the portfolio:
Invesco US Govt Money Fund: 16%
Invesco Global: 5%
Invesco V.I. Growth & Income: 5%
Fidelity VIP Mid Cap: 7%
Franklin Mutual Shares VIP Fund: 5%
Franklin US Govt Securities: 15%
Goldman Sachs Strategic Growth: 5%
Lord Abbett Fundamental Equity: 7%
MFS Total Return Bond Series: 15%
PIMCO Low Duration: 9%
PIMCO Short-Term: 9%
Am I crazy or is this nuts? What do I need to do here?
-I have the guy's contact information and considered calling him to discuss but on second thought I cant 'see that being productive. He's not going to flat out tell me she's being taken advantage of, and will probably just say things in financial advisor-speak that are above my head anyway that I don't understand.
-Should we just open a brokerage account with one of the big names and park it all there? If so should we do a basic S&P 500 type of index fund, or maybe split it up to have some very low risk bond stuff too due to her age? Having it split into 10+ different funds just seems wild to me.
This has caused her a lot of stress and she told me she has lost a lot of money with other advisors (probably due to shite like the above) so I'd really like to get this handled for her. Any help is greatly appreciated.
She also sent me the breakdown of the portfolio which is below. The percentage is the allocation in the portfolio:
Invesco US Govt Money Fund: 16%
Invesco Global: 5%
Invesco V.I. Growth & Income: 5%
Fidelity VIP Mid Cap: 7%
Franklin Mutual Shares VIP Fund: 5%
Franklin US Govt Securities: 15%
Goldman Sachs Strategic Growth: 5%
Lord Abbett Fundamental Equity: 7%
MFS Total Return Bond Series: 15%
PIMCO Low Duration: 9%
PIMCO Short-Term: 9%
Am I crazy or is this nuts? What do I need to do here?
-I have the guy's contact information and considered calling him to discuss but on second thought I cant 'see that being productive. He's not going to flat out tell me she's being taken advantage of, and will probably just say things in financial advisor-speak that are above my head anyway that I don't understand.
-Should we just open a brokerage account with one of the big names and park it all there? If so should we do a basic S&P 500 type of index fund, or maybe split it up to have some very low risk bond stuff too due to her age? Having it split into 10+ different funds just seems wild to me.
This has caused her a lot of stress and she told me she has lost a lot of money with other advisors (probably due to shite like the above) so I'd really like to get this handled for her. Any help is greatly appreciated.
11
Posted on 1/19/26 at 8:36 am to WG_Dawg
She is getting ripped off
Posted on 1/19/26 at 8:39 am to MSTiger33
Yeah it felt that way immediately. Good to know I'm not crazy.
Biggest question now is what to do next? She needs a "set it and forget it" type of option that would be entirely handled on the front end by me.
Biggest question now is what to do next? She needs a "set it and forget it" type of option that would be entirely handled on the front end by me.
Posted on 1/19/26 at 8:44 am to WG_Dawg
quote:
2% fee annually based on the amount in the portfolio. Then she is also charged 20% on any gains
That is called theft
Posted on 1/19/26 at 8:50 am to WG_Dawg
What's the goal? Income?
Sometimes the answers are so simple but made incredibly complicated.
And what's her total balance? It appears that growth is still in the equation, to some degree.
Sometimes the answers are so simple but made incredibly complicated.
And what's her total balance? It appears that growth is still in the equation, to some degree.
Posted on 1/19/26 at 8:51 am to WG_Dawg
It’s ridiculous, that’s literally what VC funds charge their investors.
For $60k, that’s also too many funds. She might want to look into something like Fidelity’s Robo advisor (Fidelity Go).
For $60k, that’s also too many funds. She might want to look into something like Fidelity’s Robo advisor (Fidelity Go).
Posted on 1/19/26 at 8:55 am to WG_Dawg
You are right to think ahe is being over charged and that portfolio is unnecessarily complex. Perhaps more importantly, why is she sitting on this $ if "just scraping by" in her 70s. I'd look at convincing her to plan to spend it deliberately to enhance her quality of life/peace of mind in her final decades or less. On otherhand, if she may need it as a reserve for large one off expenses then parking it all an index fund is higher risk than probably warranted.
Could the 20% just be tax withholding on realized gains? I never heard of a 20% commission on gains. That sounds egregious if accurate. Apparently performance based fees are a thing but stacking on top of AUM is gouging her twice, ouch.
Could the 20% just be tax withholding on realized gains? I never heard of a 20% commission on gains. That sounds egregious if accurate. Apparently performance based fees are a thing but stacking on top of AUM is gouging her twice, ouch.
Posted on 1/19/26 at 8:56 am to BestBanker
quote:
What's the goal? Income?
Some income would be great sure. Since she has no real job income and won't be contributing to this, I think the main goal is something like "want to put it somewhere where it can grow safely that will get more returns than a standard savings account".
I don't think her parents, siblings, or really anyone in her family tree has ever invested anything. So I know she's trying to do the right thing just has no clue what to do or where to start.
quote:
And what's her total balance?
About $60K.
Posted on 1/19/26 at 8:59 am to TorchtheFlyingTiger
quote:
Perhaps more importantly, why is she sitting on this $ if "just scraping by" in her 70s.
I hate to make this thread sound like I'm griping and talking shite about my mom, but she's a "just barely scrape by in life" kind of person. She has no job, doesn't leave the house, has no hobbies, no real friends. She literally just sits at home watching TV all day. I'm not even sure what enhancing her QOL would look like.
I do know that she is getting in poorer health and has had several issues over the last couple years with falls and hospitalizations. It is my assumption that probably the bulk of this money is going to end up needing to be used on healthcare at some point. Then whatever remains would just go to me when the time comes.
Posted on 1/19/26 at 9:04 am to WG_Dawg
Ok. So it's "savings", as it is, and she most likely doesn't want to risk losing it, but would like it to grow for what purpose? Just to have a a safety net or to generate income to what number annually?
Example: At 5% earnings, would she want an additional $3K of income? Or are you thinking you can take this 60k and turn it into a much higher figure, and by when?
Example: At 5% earnings, would she want an additional $3K of income? Or are you thinking you can take this 60k and turn it into a much higher figure, and by when?
Posted on 1/19/26 at 9:29 am to BestBanker
quote:
but would like it to grow for what purpose? Just to have a a safety net
no real purpose other than what you've mentioned. Sure she could put it in Ally or another online bank and earn 3.5% interest hassle free but I Think the goal with "investing" was to get a little bit better return. For no specific reason in particular other than just to see it grow more.
quote:
would she want an additional $3K of income? Or are you thinking you can take this 60k and turn it into a much higher figure, and by when?
her goal with this money isn't income. It's more so to grow the balance for any future needs, which will probably be medical in nature before too long. A couple years ago we looked at putting her into an assisted care facility but anyone halfway decent was really pricey. I don' think we're trying to do that again by next week or anything, but in another 5-10 years we might have to.
quote:
are you thinking you can take this 60k and turn it into a much higher figure, and by when?
not the aim at all. This isn't my money so I don't have any specific goals for it besides:
1) Don't continue losing it via insane fees and charges like she has been for years,
2) Get a little better return than what you'd get in a savings account
I really think just putting it all in a brokerage fund is going to be the easiest for all parties I just don' know what fund(s) specifically to put it in. Her portfolio allocation will look much different than whatever I have just because of the time horizon.
Posted on 1/19/26 at 9:38 am to WG_Dawg
Put it in a Fidelity brokerage account. They'll hold the funds in SPAXX making 3.4%
Posted on 1/19/26 at 9:40 am to WG_Dawg
Ok. So what earnings rate of return would she be satisfied?
Sorry for the questions but there is no button to push for the correct solution.
And the MM is taxable. Thinking tax deferred growth first. And rates are still low.
Sorry for the questions but there is no button to push for the correct solution.
And the MM is taxable. Thinking tax deferred growth first. And rates are still low.
Posted on 1/19/26 at 9:44 am to BestBanker
quote:
Ok. So what earnings rate of return would she be satisfied?
Idk..at least 5% I guess? If I asked her directly she'd look at me like I had 3 heads.
Posted on 1/19/26 at 9:49 am to WG_Dawg
Ok. Fixed annuities in the 5%+ range, no fees, tax deferred. Govt bonds in the 4s taxable, but most liquid.
Income taken from both or re-saved for later. One client purchased 5 yr fixed annuity at 5.7% last week.
The amount of her savings indicates a less risky approach for her deposits.
Income taken from both or re-saved for later. One client purchased 5 yr fixed annuity at 5.7% last week.
The amount of her savings indicates a less risky approach for her deposits.
Posted on 1/19/26 at 10:14 am to MSTiger33
Isn’t 2 and 20 how hedge funds work. Not some ladies podunk financial advisor.
Posted on 1/19/26 at 10:27 am to AaronDeTiger
quote:
Put it in a Fidelity brokerage account. They'll hold the funds in SPAXX making 3.4%
I think etrade offers a deposit bonus of approximately 300 dollars for a 60k deposit but funds must be held in account for a year.
With the SPAXX and
That 300 dollars bonus this is going to get you closer to that 5% return you wanted.
Posted on 1/19/26 at 10:34 am to dyerbro
Would something like a total stock market index fund or s&p500 index be too volatile for her situation?
Posted on 1/19/26 at 10:37 am to WG_Dawg
quote:That can't be right, can it?
Then she is also charged 20% on any gains
Posted on 1/19/26 at 11:00 am to GeauxTigers123
quote:
Isn’t 2 and 20 how hedge funds work. Not some ladies podunk financial advisor.
Yes, 2% management fee and 20% carried interest on the backend.
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