First, great forum. I've done alot of reading, and it's helped.
After my friend at work talked about how fees are the real problem for middle class investors, I began to talk about the financial advisor I use, and why he doesn't use one. I've since rudely been awakened to the fees I'm paying my advisor, when there is really no need. But I was never good with money, and after my father died and left me an inheritance, I was nervous that I was going to do something stupid like blow it all on silly things. I decided I was going to be mature and responsible, and get an advisor. I hired the guy that my sister and brother in law uses, and they're well off so this guy must be great. And he has been very nice, responsive and helpful when I had questions. But I think I'm paying too much.
Hey, you took responsibility for the inherited money and that is a primary component to investing success.
My investments with Ameriprise right now are:
-- $108K Riversource variable annuity (5 years I believe but I'll have to check - it could be 10)<--yes, you need to get details on costs associated with this. One option might be to use a 1035 exchange to Vanguard.
-- $112K SPS Advantage mutual fund
-- $92K IRA
-- $45K in an IRA account that includes $15K in REITs, and then $30K in some "thermostat" funds - I think they are conservative / haven't been doing wellSee if you can get ticker symbols for these funds. Do you know what your asset allocation is?
I opened up these accounts about 18 months ago. My advisor charges $750/year + about 1% on the funds themselves.Advisors usually charge on a percentage basis, not counting expense ratios of the funds.
I'm still trying to get him to tell me if he's making money off the funds in other ways. He sent me a report on the net return on all my investments with him this past year (June 2012 to June 2013) and the total net return after fees was 12.2%. My friend at work said that just putting my money in index funds w/ Vanguard would've meant a 13.5% return. You have to be very careful about these comparisons. You can't compare your returns to the S&P500 unless you have a portfolio that matches the S&P500. Returns depend on the amount of risk taken. Your returns most likely don't include the advisor's fees either.
I think my first step is to call Vanguard. I see alot of you guys using / recommending them. They are also who my friend at work uses. I'm guessing I can transfer most of my accounts easily except for the annuity. I'm planning on asking Vanguard what the options are, but I'm pretty sure I'll need to pay some severance or whatever you call it.Don't call Vanguard yet. There are several issues you need to learn about and it's best to learn them before making any moves. All the information you need can be obtained here (forum and Wiki) and in reading a few recommended books. Search for Books on the Wiki. Link to Getting started--http://www.bogleheads.org/wiki/Getting_Started
I feel pretty duped at this point, but I guess I'll chalk it up to a hard lesson learned.<--We call it the cost of education.
Other quick info about me:
42 years old
Single - no children
$20K in emergency fund
Maxing out my 401K contribution but apart from the above investments I only have an additional $75K in my work's 401K<--We need to know what your 401k fund choices are. Provide tickers, if any, and expense ratios.
Saving $1200/ month into my emergency fund - which will soon go into invesments
Salary is $130K/year with about $15K in annual bonuses after taxes
Guess what I'm looking for at this point are:
-- Anything apart from calling Vanguard you'd recommend? Anything I want to ask them?Don't call yet. Better if you understand what you're doing and what you want to do before making changes. One expample: If you transfer funds to Vanguard they will end up in a brokerage account and you'll have to sell them there and then open another account on the mutual fund side and transfer there to buy Vanguard funds. Vanguard charges some fees on selling, but they are probably less then what Ameriprise will charge you.
-- My advisor is paid in mid-January so I'm assuming I just ride out the rest of this year before transferring?<--No rush. Transfer time will depend on when you feel comfortable with an investment plan.
-- Does it sound like I'm in trouble re: retirement - do I need to save more / month?
No, you're not in trouble, but we will help you get more efficient.