Moving from a CFP to ?

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Mettaman
Posts: 14
Joined: Sat Jun 27, 2015 12:31 pm

Moving from a CFP to ?

Post by Mettaman » Wed Dec 13, 2017 12:55 pm

Hello.

Question
Whether or not I should continue to retain my personal financial advisor or use a financial planning service from Vanguard or Schwab.

Background
I'm 68, retired 2 years ago. My income comes from social security and drawing down on savings. Thinking I needed help in managing my brokerage and 401(k) accounts I retained a fee only planner. The agreement changed and he now earns approx. 1% to prepare my taxes, monitor portfolios, and adjust same 2-3 times a year. My portfolios currently consist mainly of Vanguard index funds (60%) and some bonds (40%). Portfolios are up 10% in 2017. My annual goal is 5%.

Forum member insights are highly regarded. Thank you and happy, healthy holidays.

inbox788
Posts: 5139
Joined: Thu Mar 15, 2012 5:24 pm

Re: Moving from a CFP to ?

Post by inbox788 » Wed Dec 13, 2017 1:01 pm

You have a much better chance of meeting your 5% goal if 20 or 25% of the gains wasn't going to the advisor.

On a $1M portfolio, 1% comes to $10, 000/year. Is the tax preparation and what he does worth that much? More, if the portfolio is higher.

I figure if I pick a less than optimal portfolio like the 3-fund portfolio, I still do better than a better portfolio after 1% AUM.

https://www.whitecoatinvestor.com/150-p ... han-yours/

BTW, I still pay a CPA to do my taxes, but I keep asking why I bother when I can spend a few dollars for a program and do it myself.

mhalley
Posts: 5718
Joined: Tue Nov 20, 2007 6:02 am

Re: Moving from a CFP to ?

Post by mhalley » Wed Dec 13, 2017 2:24 pm

Sounds like you already have a reasonable portfolio, I see no reason you can’t do it yourself from now on. If you don’t want to do that, them paying vanguard .3% would be better than the 1% you are paying now, or put it in the lifestrategy moderate growth fund that is 60/40 and not pay any advisor fees.

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David Jay
Posts: 5041
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Moving from a CFP to ?

Post by David Jay » Wed Dec 13, 2017 3:11 pm

mhalley wrote:
Wed Dec 13, 2017 2:24 pm
...put it in the lifestrategy moderate growth fund that is 60/40 and not pay any advisor fees.
^^^ This. (and spend $60 for Turbotax)
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

Jack FFR1846
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Joined: Tue Dec 31, 2013 7:05 am

Re: Moving from a CFP to ?

Post by Jack FFR1846 » Wed Dec 13, 2017 3:17 pm

I have my taxes professionally prepared for $300. I keep just over $2M in index funds without any financial adviser. My total cost for fund ERs is $800. Thus my total cost for holding the funds and tax preparation is $1100.

Managing investments is easy. If you believe rebalancing is difficult (I take 15 minutes a year), just don't rebalance. No way it's worth 1% ($20k for me).
Bogle: Smart Beta is stupid

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