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Started By
Message
Judging performance of a financial advisor
Posted on 7/14/20 at 1:21 pm
Posted on 7/14/20 at 1:21 pm
I'm leaning towards cutting ties with my current financial advisor. Looking for other's opinions.
Started with them almost 4 yrs ago with $125,000. Fast forward to today and I'm up 26.6% (6.65% avg yearly) while paying them 1.2% yearly. The approach was always slow and steady, and consists of about 25 S&P 500 stocks that they manipulate monthly based on performance.
They've also got me started with Roths, 529s, life insurance, and basic personal finances that have me in better shape.
The 26.6% is more than I likely would have made over the 4 years with that money, but I feel like the market has done better than that. And I feel like it's a good time to jump with the racism pandemic election coming up. What do yall think?
Started with them almost 4 yrs ago with $125,000. Fast forward to today and I'm up 26.6% (6.65% avg yearly) while paying them 1.2% yearly. The approach was always slow and steady, and consists of about 25 S&P 500 stocks that they manipulate monthly based on performance.
They've also got me started with Roths, 529s, life insurance, and basic personal finances that have me in better shape.
The 26.6% is more than I likely would have made over the 4 years with that money, but I feel like the market has done better than that. And I feel like it's a good time to jump with the racism pandemic election coming up. What do yall think?
9
Posted on 7/14/20 at 1:24 pm to Zissou
You can do it yourself and save tens of thousands if not hundreds of thousands
Posted on 7/14/20 at 1:25 pm to Zissou
I average 9% a year with mine. Its my fraternity brother so I have a different level of comfort with him as well
Posted on 7/14/20 at 1:29 pm to Zissou
You would've made out better if you had dumped it all in VTSAX or VOO and called it a day.
Posted on 7/14/20 at 1:38 pm to Zissou
quote:
Started with them almost 4 yrs ago
quote:What's your risk profile?
and I'm up 26.6%
In a vacuum, that looks pretty bad because the S&P over the last four years is at least 50% higher than what you're getting. But without knowing the rest of your situation it's hard to judge your advisor here.
Posted on 7/14/20 at 2:59 pm to Zissou
I don't have all the details, but it may be time to fire your financial advisor.
This post was edited on 7/14/20 at 3:00 pm
Posted on 7/14/20 at 3:57 pm to Zissou
quote:
Started with them almost 4 yrs ago with $125,000. Fast forward to today and I'm up 26.6% (6.65% avg yearly) while paying them 1.2% yearly. The approach was always slow and steady, and consists of about 25 S&P 500 stocks that they manipulate monthly based on performance.
What is your risk profile with them? It sounds like you asked them to be conservative (slow and steady) but now you're upset that you weren't more aggressive.
quote:
They've also got me started with Roths, 529s, life insurance, and basic personal finances that have me in better shape.
So they are also providing benefits beyond returns though education and investment vehicles?
quote:
What do yall think?
I don't think you've given enough information to say one way or the other.
Posted on 7/14/20 at 5:06 pm to Zissou
When gut wrenching shite hits the fan will you freak out? That is the real question on whether you can go on your own. The problem is many think they can and they cannot.
Posted on 7/14/20 at 6:10 pm to Zissou
It may be time, but I would point you to the dalbar study for your reading pleasure.
Posted on 7/15/20 at 5:44 am to Zissou
Ask your advisor to drop the fee to flat 1%. That .2 bps over the 4 years would have likely brought you up to around 7% annual.
Also look at the internal expense ratios of the investments you own. Are you owning high expense ratio mutual funds inside of a fee wrap account? If so, you might be paying 1.2 for the FA and another 1% for investments (internal expenses).
If that’s how they have you set up- you/your advisor could cut your internal expenses by utilizing ETFs and index funds. If you were set up that way- making those changes could take another .7% off the cost of your portfolio.
If you have a taxable account (non IRA) and you own mutual funds- you are losing money to capital gains taxes generated by the active management of the each year. If you changed these to ETFs/Index Funds you won’t get capital gains from activity inside of the funds. Remember investing isn’t about what you make- it’s about what you keep- so you have to look at the taxable impact.
Also- what is your percentage of international investments? Those have greatly lagged the S&P.
Also look at the internal expense ratios of the investments you own. Are you owning high expense ratio mutual funds inside of a fee wrap account? If so, you might be paying 1.2 for the FA and another 1% for investments (internal expenses).
If that’s how they have you set up- you/your advisor could cut your internal expenses by utilizing ETFs and index funds. If you were set up that way- making those changes could take another .7% off the cost of your portfolio.
If you have a taxable account (non IRA) and you own mutual funds- you are losing money to capital gains taxes generated by the active management of the each year. If you changed these to ETFs/Index Funds you won’t get capital gains from activity inside of the funds. Remember investing isn’t about what you make- it’s about what you keep- so you have to look at the taxable impact.
Also- what is your percentage of international investments? Those have greatly lagged the S&P.
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