Judging performance of a financial advisor

You can do it yourself and save tens of thousands if not hundreds of thousands

You would've made out better if you had dumped it all in VTSAX or VOO and called it a day.

I don't have all the details, but it may be time to fire your financial advisor.

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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.

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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.

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They've also got me started with Roths, 529s, life insurance, and basic personal finances that have me in better shape.

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So they are also providing benefits beyond returns though education and investment vehicles?

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What do yall think?

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I don't think you've given enough information to say one way or the other.

"When gut wrenching shite hits the fan will you freak out?"

Talked to a neighbor who is a successful financial advisor. He said one of his main jobs is to keep people calm during volatile times.

I do not use one myself, but have focused on "critical mass" from an early age. That being enough to be able to step away from 8-5.

But lsu13lsu asks a great question. Did you instruct them to take a conservative approach to investing for you?

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ETA: The only way to judge an advisor is to compare them to the market. Doesn't mean S&P 500. It means whatever risk profile you agreed to in the beginning. Slow and Steady doesn't sound like you agreed to S&P 500, Russell 2000 or NASDAQ.

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I would agree to an extent but I would judge an advisor by are you consistently on track with meeting your long term goal?

If a plan was set up for you and 6% annual growth more than achieved that goal then what’s the purpose of trying to achieve 12% and taking on extra risk that could jeopardize your future.

Financial planning is not about returns, it’s about risk management.

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.