ThomasPartners Dividend Growth Question.

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maxgrowth
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ThomasPartners Dividend Growth Question.

Post by maxgrowth » Fri Mar 10, 2017 4:48 pm

Dear All,

I have about $200K saving which I wanted to invest for my retirement in additional to my 401K. I have a few questions which I really appreciate your input:

1. My Schwab CFP strongly suggested me to put into ThomasPartners Dividend Growth and balance income strategy with 0.9% actively management fee. Your input???
2. If not ThomasPartners, should I put them into Retirement Target Date Fund such as 2030 fund? I don't like to actively manage my portfolio.
3. Is this right market to make investment considering the stock market is so high? Should I wait until the stock market crashes? Thank you so very much for your input. Katherine.

Thank you so much for your help in advance!

dbltrbl
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Re: ThomasPartners Dividend Growth Question.

Post by dbltrbl » Fri Mar 10, 2017 5:37 pm

Vanguard balanced index or something similar at Schwab.

dbr
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Re: ThomasPartners Dividend Growth Question.

Post by dbr » Fri Mar 10, 2017 5:57 pm

One thing for sure is don't pay 0.9% for anything. Secondly you should fire that advisor for letting someone steal your money. I sure hope you are not also paying an advisory fee.

Failing any more specifics than you have given TR2030 might be fine. More than that, I would sit tight and start at "getting started" and learn much more about investing: https://www.bogleheads.org/wiki/Getting_started.

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in_reality
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Re: ThomasPartners Dividend Growth Question.

Post by in_reality » Fri Mar 10, 2017 7:50 pm

maxgrowth wrote:Dear All,

I have about $200K saving which I wanted to invest for my retirement in additional to my 401K. I have a few questions which I really appreciate your input:
Hi, and welcome.
maxgrowth wrote:1. My Schwab CFP strongly suggested me to put into ThomasPartners Dividend Growth and balance income strategy with 0.9% actively management fee. Your input???
No, because the 0.9% isn't worth it.
maxgrowth wrote:2. If not ThomasPartners, should I put them into Retirement Target Date Fund such as 2030 fund? I don't like to actively manage my portfolio.
Schwab Target Index funds by comparison cost 0.13%. https://www.schwabfunds.com/secure/file/P-9430864
Schwab has other Target Date Funds in the .5% range, so make sure to get Target Index ones. 2030 would be SWXEX
maxgrowth wrote:3. Is this right market to make investment considering the stock market is so high? Should I wait until the stock market crashes? Thank you so very much for your input. Katherine.

Thank you so much for your help in advance!
It might never be below today's prices though. It could just go sideways or only slowly up (such that we are all somewhat disappointed with returns but there is never a clear super low chance to buy and take advantage of subsequent stellar returns)

Also, a fund like SWXEX has some international exposure which isn't at such a high as the US.

maxgrowth
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Re: ThomasPartners Dividend Growth Question.

Post by maxgrowth » Sat Mar 11, 2017 2:02 am

Thank you guys so very much. You guys are just so awesome!!! You saved me.. I am going to go with Schwab Target Index ETFSa and Vanguard Index Funds.

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in_reality
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Re: ThomasPartners Dividend Growth Question.

Post by in_reality » Sat Mar 11, 2017 2:06 am

maxgrowth wrote:Thank you guys so very much. You guys are just so awesome!!! You saved me.. I am going to go with Schwab Target Index ETFSa and Vanguard Index Funds.
0.13% is a great price for a Target Retirement Fund! It's more diversified than going with dividend payers only- that's for certain!

Actually the Target Index series is a mutual fund that holds the Schwab ETFs so it's easy to use.

maxgrowth
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Re: ThomasPartners Dividend Growth Question.

Post by maxgrowth » Sat Mar 11, 2017 2:35 am

in_realty: I plan to put some money into Vanguard Target Index Funds as well. Is this a good idea? Any better options in Vanguard for me? Thank you for your advice again.

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in_reality
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Re: ThomasPartners Dividend Growth Question.

Post by in_reality » Sat Mar 11, 2017 2:42 am

maxgrowth wrote:in_realty: I plan to put some money into Vanguard Target Index Funds as well. Is this a good idea? Any better options in Vanguard for me? Thank you for your advice again.
The Target Index funds are great and very easy to manage. Highly recommended.

You might be able to save a tiny bit by holding the individual funds, and you might save a little bit by putting bonds in a tax sheltered account (although with today's low rates perhaps not).

I tend to think of Target date funds as the least expensive form of having an advisor (since there is a research team behind them).

Also, they will stay properly balanced and you won't be tempted to add this or that fund for whatever reason.

maxgrowth
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Re: ThomasPartners Dividend Growth Question.

Post by maxgrowth » Sat Mar 11, 2017 3:35 am

Thank you, in_reality. Really appreciate it. Have a great weekend!

Turn62yearsold
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Re: ThomasPartners Dividend Growth Question.

Post by Turn62yearsold » Tue Jan 16, 2018 5:27 am

Today just joined bogleheads. Thank you to everybody here on this superb forum.

I just got the same pitch from a Schwab CFA. Seemed a little peculiar that the guy had someone else call me. Basically asking if I had received my Portfolio Consultation Report which was sent via USPS, and if I would sign the paperwork for the Thomas Partners Dividend - actual name TPI Dividend Growth Strategy. I have been away on a long overseas trip, so had not seen the printed 37 page report, but have since downloaded from my Schwab online account. Had never heard this fund mentioned in my previous conversation, but immediately a red flag was raised when I heard the name mentioned.

At this point my advisor and I are just about a week away from our next telephone consultation. In the meantime, I have communicated by email that I was opposed to paying .90% (assuming this is in addition to their expense ratio), and that there were other funds with much lower costs, citing two in particular - VDADX, and SCHD (U.S. Dividend Equity ETF). I also wrote him that I am still encouraged that we both are attracted to this style of investment for an addition to my portfolio. In early 2017 I invested in VDAIX and also SFLNX for my HSA account. The HSA account value is less than 10 percent of the amount that my advisor wants to put into the Thomas Partners fund. I agree with the amount that he wants to allocate, but just disagree with his fund choice.

He is now aware of my existing HSA account and the positions in the 2 funds after he reads my email. I sent it just after the MLK 3 day weekend had begun, so I am anxious for his response.

Interesting article in the January 11th Wall Street Journal - Discount Brokers Push Pricier Services. I respect the WSJ, but still cannot trust 100 percent any media source. They never seem to get it right in my own industry, so maybe same thing with this article. I am not comforted in the vague language that Schwab's Joe Vietri uses here - " We never want a financial consultant to feel they have to sell one product over another from a compensation standpoint".

My retirement stuff is through Schwab, but an in service rollover could still be done with a different brokerage such as Vanguard. But, still will give these guys at Schwab a chance.

Thanks to everybody in advance.

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in_reality
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Re: ThomasPartners Dividend Growth Question.

Post by in_reality » Tue Jan 16, 2018 10:27 am

Turn62yearsold wrote:
Tue Jan 16, 2018 5:27 am

At this point my advisor and I are just about a week away from our next telephone consultation. In the meantime, I have communicated by email that I was opposed to paying .90% (assuming this is in addition to their expense ratio), and that there were other funds with much lower costs, citing two in particular - VDADX, and SCHD (U.S. Dividend Equity ETF). I also wrote him that I am still encouraged that we both are attracted to this style of investment for an addition to my portfolio. In early 2017 I invested in VDAIX and also SFLNX for my HSA account. The HSA account value is less than 10 percent of the amount that my advisor wants to put into the Thomas Partners fund. I agree with the amount that he wants to allocate, but just disagree with his fund choice.
Welcome.

Dividend Growth is basically a value strategy isn't it. I mean not really if dividends become expensive, but more often reinvesting dividends will be into value companies.

If I wanted a value strategy at Schwab, and wanted it managed, I would choose Schwab Intelligent Portfolios. They use the ETF versions of SFLNX [FNDX] and also similar funds for small caps, international developed large, international developed small and emerging [fnda, fndf, fndc, fnde].

Are you familiar with Schwab Intelligent Portfolios? There is no management fee, but the downside some say is the cash holdings that Schwab uses as a defensive asset and lends out via their mortgage dept. to earn money. Do you get some interest on it (national average). They also include precious metals in a small slice as part of their inflation protection. I use those funds but not the service at this time.

Another option is Schwab Intelligent Advisory, they have a 0.30% fee that gets capped to $900/quarter (or about $1.4M) if I recall. I don't know too much about them but think they are similar to the Schwab Intelligent Portfolios with more flexibility and advice.

I'd prefer either of those offerings, or managing my own with the funds they use, or straight market cap weighting over a dividend strategy (because I don't want to try and figure it if dividends have become expensive. I mean with low yields it's been recommended as an alternative way to generate income. Not sure if anyone listened to that or not though) But as you say, SCHD is a good fund if you choose that route.

dbr
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Re: ThomasPartners Dividend Growth Question.

Post by dbr » Tue Jan 16, 2018 10:30 am

Anyone who can actually figure out a strategy that is better than total market investing should find it child's play to manage that strategy. There should be plenty of ways to do so without paying 1% costs for active funds of some kind.

pkcrafter
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Re: ThomasPartners Dividend Growth Question.

Post by pkcrafter » Tue Jan 16, 2018 1:48 pm

I assumed Thomas Partners was a mutual fund, but can't find a ticker. Maybe it just a stock account. The following is interesting, and makes me wonder exactly what the total fees really are. Note too that returns are listed back to 2003, but Schwab did not partner up with Thomas until 2013. Additional fees were added at that time.
Portfolio management is provided by ThomasPartners, Inc. ("ThomasPartners"), a registered investment advisor. ThomasPartners and Charles Schwab & Co., Inc. ("Schwab") are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. ThomasPartners strategies are available through the Schwab Managed Account Connection® ("Connection") program. Please read Schwab's disclosure brochure for important information and disclosures relating to Connection and Schwab Managed Account Services.

*Satisfaction Guarantee
If you are not completely satisfied for any reason, at your request Charles Schwab & Co., Inc. ("Schwab") or Charles Schwab Bank ("Schwab Bank"), as applicable, will refund any eligible fee related to your concern within the timeframes described below. Two kinds of "Fees" are eligible for this guarantee: (1) asset-based "Program Fees" for the Schwab Private Client ("SPC"), Schwab Managed Portfolios ("SMP"), Schwab Intelligent Advisory ("SIA"), and Managed Account Connection ("Connection") investment advisory services sponsored by Schwab (together, the "Participating Services"); and (2) commissions and fees listed in the Charles Schwab Pricing Guide
https://www.schwab.com/public/schwab/in ... s_partners

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

dbr
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Re: ThomasPartners Dividend Growth Question.

Post by dbr » Tue Jan 16, 2018 4:41 pm

pkcrafter wrote:
Tue Jan 16, 2018 1:48 pm
I assumed Thomas Partners was a mutual fund, but can't find a ticker. Maybe it just a stock account. The following is interesting, and makes me wonder exactly what the total fees really are. Note too that returns are listed back to 2003, but Schwab did not partner up with Thomas until 2013. Additional fees were added at that time.
Portfolio management is provided by ThomasPartners, Inc. ("ThomasPartners"), a registered investment advisor. ThomasPartners and Charles Schwab & Co., Inc. ("Schwab") are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. ThomasPartners strategies are available through the Schwab Managed Account Connection® ("Connection") program. Please read Schwab's disclosure brochure for important information and disclosures relating to Connection and Schwab Managed Account Services.

*Satisfaction Guarantee
If you are not completely satisfied for any reason, at your request Charles Schwab & Co., Inc. ("Schwab") or Charles Schwab Bank ("Schwab Bank"), as applicable, will refund any eligible fee related to your concern within the timeframes described below. Two kinds of "Fees" are eligible for this guarantee: (1) asset-based "Program Fees" for the Schwab Private Client ("SPC"), Schwab Managed Portfolios ("SMP"), Schwab Intelligent Advisory ("SIA"), and Managed Account Connection ("Connection") investment advisory services sponsored by Schwab (together, the "Participating Services"); and (2) commissions and fees listed in the Charles Schwab Pricing Guide
https://www.schwab.com/public/schwab/in ... s_partners

Paul
So the proposal is to charge a management fee and on top of that fund expenses for the funds selected.

Turn62yearsold
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Re: ThomasPartners Dividend Growth Question.

Post by Turn62yearsold » Wed Jan 17, 2018 3:50 am

The Schwab CFA responded very promptly.

The Thomas Brothers fee replaces an expense ratio, and it will also replace my Schwab Private Client (SPC) fee for the assets to be managed. I understand now that this will result in a cost savings on actively managed U.S. Large Cap stocks. Instead of paying my SPC fee on equities, plus an expense ratio of a mutual fund or ETF, I would pay just the .90%.

No, it is not a mutual fund. It is a separately managed account - I would be the direct owner of the securities. The managers do buy and sell without my input, but I may restrict them from purchasing up to 3 securities. Also, I may instruct them to harvest tax losses at end of each year.

Yes, similar to VDAIX, OR VDADX, but with a key difference. The managers can opt to not buy a company if they see problems. ConocoPhillips probably was in the Vanguard (or Schwab) mutual fund when they cut their dividend in 2015, but not at Thomas Partners.

I did not choose the lower cost investment options at Schwab, such as Schwab Intelligent Portfolios (their robot advisor), but after 2 visits to their office, I agreed that the Schwab Private Client was worth the cost.

Holtgraver
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Re: ThomasPartners Dividend Growth Question.

Post by Holtgraver » Thu Jun 07, 2018 10:38 am

Investing is my hobby. It is not my wife's hobby. I want to have clear advice for her for what to do when I pass. I am considering using Thomas Partners and Intelligent Portfolios for this.

As an experiment, I put about 200K in a Thomas Partners account on April 23, 2018. I've tracked the performance of it since. I have 35 holdings (60 equity, 40 income) and track them very carefully, doing a full review of about 30 factors on each one every 2 weeks (8 hours per day). The TP portfolio performance is nearly identical to my performance on the 35 holdings. It has been very close every day since I set it up.

I set up the TP account to help me decide what should be done with our (spouse and me) money after I die. Based on this experiment, as of now, I will advise my wife (and the executor and my Schwab free advisor) to put 50% in TP and 50% in Intelligent portfolios after setting up an automatic withdrawal for the RMD and the monthly expenses.

I've just moved $100K into Intelligent portfolios and might revise the 50/50 split after I learn more about it in a few months.

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