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Financial Advisor Question
Posted on 1/11/25 at 2:53 pm
Posted on 1/11/25 at 2:53 pm
I am in my early 50s and have a few hundred thousand with a broker from some old 401ks. I am thinking about putting that money in a Fidelity index fund until I am in my late 50s.
What kind of returns should I expect from an advisor? Am I being unreasonable to expect them to come close to matching the market? I know they will not always beat the street because I have a small percentage in lower risk funds.
I guess my question is what kind of returns should a man my age expect? I think can do as well as a broker by buying a good index fund. I have no other way of judging my broker besides looking at the market returns for the major markets and I know the NASDAQ is not a great comparison with the recent run it has been on.
Any thoughts would be welcomed. TIA.
What kind of returns should I expect from an advisor? Am I being unreasonable to expect them to come close to matching the market? I know they will not always beat the street because I have a small percentage in lower risk funds.
I guess my question is what kind of returns should a man my age expect? I think can do as well as a broker by buying a good index fund. I have no other way of judging my broker besides looking at the market returns for the major markets and I know the NASDAQ is not a great comparison with the recent run it has been on.
Any thoughts would be welcomed. TIA.
4
Posted on 1/11/25 at 3:52 pm to Tomcat
Don’t hire a FA for “returns” do it for sound financial planning and tax advice.
Posted on 1/11/25 at 3:56 pm to lynxcat
You should expect returns along with advice. To say you don’t hire a FA for returns is short sighted. You should expect good returns along with tax advice and planning.
Posted on 1/11/25 at 3:58 pm to lynxcat
Lynx is spot on. If you have a few hundred thousand and early 50’s your returns aren’t the main benefit. That’s how they’ll get paid, but maybe you can get someone that can sidestep some really bad markets for you between now and retirement that an index will not.
It’s all the other planning that having someone to bounce ideas, bring ideas to the table, verify or challenge your thoughts on big decisions, or just cut through the noise of what you need to know… that’s the value.
It’s all the other planning that having someone to bounce ideas, bring ideas to the table, verify or challenge your thoughts on big decisions, or just cut through the noise of what you need to know… that’s the value.
Posted on 1/11/25 at 4:30 pm to UpstairsComputer
I guess I am having trouble seeing their value when I have been getting below market results for the past few years. I a, having trouble getting over the fact that my FA has left tens of thousands on the table over the past five years, which can in turn grow exponentially.
Posted on 1/11/25 at 5:08 pm to Tomcat
You can run red lights to potentially get to your destination a lot quicker too… is it worth it?
This post was edited on 1/11/25 at 5:09 pm
Posted on 1/11/25 at 5:15 pm to Tomcat
Risk profile, goals…there’s more than hitting SP500 returns. If you want SP500 returns then you don’t need a FA. Go buy VTI and roll with it.
Posted on 1/11/25 at 5:47 pm to lynxcat
What kind of returns do you expect from your advisor relative to the market? Last year the S&P was at about 23% and my return as 15%. That is a big difference to me. Thoughts?
Posted on 1/11/25 at 6:17 pm to Tomcat
quote:
hat kind of returns do you expect from your advisor relative to the market? Last year the S&P was at about 23% and my return as 15%. That is a big difference to me. Thoughts?
What would you say when you and your advisor were down 18% and the S&P was down 30%?
“He lost me money?”
Posted on 1/11/25 at 6:29 pm to Tomcat
Financial advisors are about helping you structure your life/retirement plan.
Most money majors can’t beat market returns after their fees.
Also, don’t think people should work for free. If you have more assets invested they may offer discounted services or free advisory services depending on the brokerage
Most money majors can’t beat market returns after their fees.
Also, don’t think people should work for free. If you have more assets invested they may offer discounted services or free advisory services depending on the brokerage
Posted on 1/11/25 at 6:35 pm to Tomcat
Probably invested in some bond funds which historically return less than equity.
Less risk too. No free lunch
Less risk too. No free lunch
Posted on 1/11/25 at 6:46 pm to Shepherd88
quote:
What would you say when you and your advisor were down 18% and the S&P was down 30%?
That has not happened. They lost more money when the market had a down year too. Seems like I am in the minority on this board. I think the best thing for me to do is just invest it in an index fund for a few years and then go back with an advisor.
Posted on 1/11/25 at 7:48 pm to Tomcat
I don’t know how it’s possible to take less risk and get less return on the way up while simultaneously taking less risk and worse returns on the way down too. Unless your risk tolerance changed in the middle of this. Seems like the mistake would have been letting you change risk profile. If that didn’t happen then it’s revisionist history.
But it sounds like your mind is made up and the thread was just to complain that you hadn’t done this sooner. Nothing to worry about, I’m sure the next 5 years will be just as easy.
But it sounds like your mind is made up and the thread was just to complain that you hadn’t done this sooner. Nothing to worry about, I’m sure the next 5 years will be just as easy.
Posted on 1/11/25 at 7:54 pm to UpstairsComputer
I did not change my risk tolerance. My mind was not made up that is why I posted here. I am just tying to find out what kind of returns people expect relative to the market at this age. I still have not gotten an answer. I just get the advice to trust your FA. I have don’t that, but just want to see what others have gotten on their returns that are in my similar situation.
Posted on 1/11/25 at 8:25 pm to Tomcat
It’s an unknowable question is why you can’t get an answer. There a hundreds of variables. No one knows what the market will do, what you’ll be invested in, when the next crisis will be, when the next 6 trillion will be printed, how you and your advisor respond etc.
Anyone that says they know I can guarantee knows less than those that readily admit they don’t know.
If you find no value in the peripheral advice and the market goes up 20% every year then you shouldn’t have an advisor. If you are truly coming to the board with a legitimate inquiry then this is the answer. No one knows. Sounds like your advisor sucks if you lose more on the way down too.
Anyone that says they know I can guarantee knows less than those that readily admit they don’t know.
If you find no value in the peripheral advice and the market goes up 20% every year then you shouldn’t have an advisor. If you are truly coming to the board with a legitimate inquiry then this is the answer. No one knows. Sounds like your advisor sucks if you lose more on the way down too.
Posted on 1/11/25 at 8:52 pm to UpstairsComputer
quote:
It’s an unknowable question is why you can’t get an answer.
It’s not an unknowable question. The original question was about what type of returns would a person in my situation expect related to the market. I am aware of all of the variables.
quote:[quote]
If you are truly coming to the board with a legitimate inquiry then this is the answer. No one knows. Sounds like your advisor sucks if you lose more on the way down too.
Of courses, no one know what the marker will do. I am just trying to get outside opinions, because I am questioning whether my advisor needs to be changed due to the returns I am getting.
Let me simplify this for the board. What would be a reasonable expected return for 2024 when using a FA in what is supped to be a moderate risk portfolio?
This post was edited on 1/11/25 at 8:57 pm
Posted on 1/11/25 at 9:01 pm to Tomcat
6-8%
Posted on 1/11/25 at 10:00 pm to Tomcat
Posted on 1/12/25 at 9:21 am to Tomcat
quote:
They lost more money when the market had a down year too. Seems like I am in the minority on this board.
Maybe you just have a bad advisor/ company
The best thing I have heard is that a good FA won’t make you money but he will stop you from losing money
Posted on 1/12/25 at 11:57 am to Tomcat
quote:Depends entirely on how much risk you tell him/her you are OK with.
What kind of returns should I expect from an advisor?
That’s a “you” decision.
If you often change your position on risk that is a negative to most competent brokers/managers.
I have been with mine over 20 years and have subtly changed my risk position no more than 3 times and at his suggestion as to my situation changing.
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