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Which advisor?

Posted: Sun Jan 07, 2018 12:07 pm
by Klaxton
I currently have 90% (about 1.4MM) of my investments with E. Jones and want to compare costs, fees with and services with Edelman Financial and Vanguard.
I have a telephone appointment with Vanguard coming up to review what they have to offer. I will be quizzing them on their 'total' advice. So far, with Edelman I have just been listening to their radio program.
I need someone to make decisions for me both with IRA, Roth IRA and taxable accounts. I don't seem to get 'all encompassing' advice with my current adviser insofar as, for instance,tax ramifications. Also, their cost seems to be comparatively steep. I am retired and I realize that just a 0.5 % reduction in cost over 20/30 years can be substantial. On the other hand, I realize that wise investment advice can an advantage worth paying.

If there has been such a comparison in this blog please let me know but I am otherwise open to listening for any advice that can be offered.

Re: Which advisor?

Posted: Sun Jan 07, 2018 1:17 pm
by Lafder
Welcome here!

Why not take a chance and post your portfolio here like this viewtopic.php?f=1&t=6212

You can go back and edit this post to add the info. See what bogleheads will suggest.

Then come back and post the proposed portfolios at VG and Edelman for comparison and let us talk it through.

I am biased, but I think bogleheads can help you come up with a better portfolio than the ones you have mentioned :) for zero extra management fees.

It may be possible to have the exact same holdings for the same costs (expense ratios on holdings) at any place. The difference will be the extra "management" fees or trade fees. At VG you can pay 0.3% for personal advisory services. But if you can post your holdings, you do not need to pay for PAS. Some people may like the extra handholding of advisory services and you may be one of them :)

Vanguard has a large number of low cost offerings. It would be my choice between EJ, Edelmann, and VG. I do not pay for the extra PAS at VG.

lafder

Re: Which advisor?

Posted: Sun Jan 07, 2018 1:52 pm
by nedsaid
Edward Jones has changed their model. They want their clients to pay a steep assets under management fee rather than just paying commissions. Edward Jones also loved the American Funds but have now ended their relationship. I have seen such portfolios mixed with individual stocks so that the advisor would have something to trade and generate commissions.

In the old days of paying a 5.75% commission on your American Funds and then holding them forever, American Funds were and are very good and you would have been very pleased with such a portfolio. It helped that their expense ratios were relatively low. Today, they want something like 1.35% Assets Under Management fee which I think is outrageous and that doesn't include the underlying expense ratios of their mutual funds or ETFs. For years and years, the industry standard for Assets Under Management has been 1.0% a year.

I think you will find you are just being raked over with fees. It boils down to the question whether or not you are getting value added for those fees. My guess is that you are paying over $14,000 a year in various fees to Edward Jones, even at $400 an hour, that would buy you 35 hours of advice from a financial planner. If you need advice, better to pay for it by the hour and not as a percentage of assets under management. I doubt your advisor spends even 15 hours a year on you. How often do you talk to him?

You could get an asset allocation plan for probably $1,000. You could get a full financial plan for probably more like $5,000. If your situation is really complex, it might cost you $10,000 for a comprehensive financial plan. The thing is, you don't need a complete asset allocation plan or a comprehensive financial plan every year. Just checking in with the planner or advisor maybe 2 or 3 times a year for updates. Advice is a lot cheaper purchased by the hour.

If you post your portfolio as has been suggested, we can give you some ideas. If you still need an advisor, at least you will be armed with some knowledge and the right questions to ask.

Re: Which advisor?

Posted: Sun Jan 07, 2018 2:10 pm
by livesoft
There is this thread about Vanguard pay-for advice that you should read: viewtopic.php?f=2&t=236085

Unfortunately, I think you are not going to get what you want from any advisor. Sorry.

Re: Which advisor?

Posted: Sun Jan 07, 2018 2:20 pm
by Grt2bOutdoors
For tax advice, pay a CPA and read IRS Publication 17.
For investment advice - come here, post your portfolio, ask your questions, read some books, save yourself ALOT of money.

No one at EJ or Edelman will tell you that. If you somehow managed to accumulate that large sum of monies, you did something right along the way, there is no reason why you can not continue without having to pay more than 30bps for 1-2 years before taking over the reins yourself.

Re: Which advisor?

Posted: Sun Jan 07, 2018 2:27 pm
by htdrag11
OP, I'm one of the converts here and now happily managing my own. From my experience with 3 different advisors, my impression is that they are all investment managers, not financial planners. However, they do have access to other partners who are either "free" or charge separate fees. No one really does it all.

My portfolio is slightly larger than yours. I've saved over $30,000 in the last few years. Furthermore, I could manage my Vanguard portfolios to minimize taxes, such as avoiding regular dividends and short term capital gains, based on some of the advices here.

Once you set your ISP and goals, you would hardly need to rebalance (more like autopilot). Stay the course and avoid the noise.

GL.

Re: Which advisor?

Posted: Fri Aug 31, 2018 5:04 pm
by CedarWaxWing
livesoft wrote: Sun Jan 07, 2018 2:10 pm There is this thread about Vanguard pay-for advice that you should read: viewtopic.php?f=2&t=236085

Unfortunately, I think you are not going to get what you want from any advisor. Sorry.
I think of this list as an online investment club substitute.

Good advice, good people with varied experience, a far better source of educational materials and a reading list.

Great discussions.... if one reads this list 2 hours a week, and 6 books the first year, 2-3 books thereafter (or more if you are having fun) there is no advisor who will offer more for less cost.

Re: Which advisor?

Posted: Fri Aug 31, 2018 6:18 pm
by mortfree
I’ll go out on a limb and predict that Vanguard will suggest the following:

Total US Stock
Total International Stock
Total US Bond
International bond fund

Re: Which advisor?

Posted: Fri Aug 31, 2018 6:42 pm
by arcticpineapplecorp.
Klaxton wrote: Sun Jan 07, 2018 12:07 pm I currently have 90% (about 1.4MM) of my investments with E. Jones and want to compare costs, fees with and services with Edelman Financial and Vanguard.
I have a telephone appointment with Vanguard coming up to review what they have to offer. I will be quizzing them on their 'total' advice. So far, with Edelman I have just been listening to their radio program.
I need someone to make decisions for me both with IRA, Roth IRA and taxable accounts. I don't seem to get 'all encompassing' advice with my current adviser insofar as, for instance,tax ramifications. Also, their cost seems to be comparatively steep. I am retired and I realize that just a 0.5 % reduction in cost over 20/30 years can be substantial. On the other hand, I realize that wise investment advice can an advantage worth paying.

If there has been such a comparison in this blog please let me know but I am otherwise open to listening for any advice that can be offered.
Welcome to the group. Definitely post all the details as Lafder recommended otherwise you're likely to get limited advice, which is not "all encompassing" as you desire.

Be cautious of your own beliefs. While it is true that a reduction in returns due to fees does make a substantial difference over time, I wouldn't necessarily assume it's ithe nvestment advice that's worth paying for (as in an advisor is able to do something you're not or put you investments you can't put yourself into). Usually what's worth paying for is if the advisor can keep you from selling during a steep decline. There's a white paper by vanguard (link below) that shows an advisor can add returns...not over the market, but over what you would get if you didn't manage your emotions and made foolish market timing type decisions.

source: https://www.vanguard.com/pdf/ISGQVAA.pdf

The other benefit that advisors might provide if they provide comprehensive services is tax advice as in how to do Roth IRA conversions, Tax Loss Harvesting, etc. You can learn these things on your own. Bogleheads has links to posts and info in the wiki explaining these concepts.

Re: Which advisor?

Posted: Fri Aug 31, 2018 7:02 pm
by Ron Scott
You think you need a financial advisor. You do not. Driving a car or making dinner for a party of 5 is harder. Having an advisor causes more harm than good. (You might need an accountant.)

EJ is NOT a good place to invest your money. Search this forum for comments. Look to VG, Fidelity or Schwab...any of them will recommend to you the most painless way to extract yourself from EJ.

Setting yourself up financially is easy. There's a system with a good amount of flexibility that most here follow.

Please read the wiki here, the Bogleheads Guide, and Bogle's "little book". 90% of what you'll need is there.

Also, post your questions here. It's a great resource for you.

Re: Which advisor?

Posted: Fri Aug 31, 2018 8:27 pm
by Kevin8696
mortfree wrote: Fri Aug 31, 2018 6:18 pm I’ll go out on a limb and predict that Vanguard will suggest the following:

Total US Stock
Total International Stock
Total US Bond
International bond fund
Oh no !! Not the famous closet target date fund wrapped in a 0.30% advisory fee...

Re: Which advisor?

Posted: Fri Aug 31, 2018 8:27 pm
by Kevin8696
mortfree wrote: Fri Aug 31, 2018 6:18 pm I’ll go out on a limb and predict that Vanguard will suggest the following:

Total US Stock
Total International Stock
Total US Bond
International bond fund
Oh no !! Not the famous closet target date fund wrapped in a 0.30% advisory fee...

Re: Which advisor?

Posted: Fri Aug 31, 2018 8:36 pm
by Kevin8696
Klaxton wrote: Sun Jan 07, 2018 12:07 pm I currently have 90% (about 1.4MM) of my investments with E. Jones and want to compare costs, fees with and services with Edelman Financial and Vanguard.
I have a telephone appointment with Vanguard coming up to review what they have to offer. I will be quizzing them on their 'total' advice. So far, with Edelman I have just been listening to their radio program.
I need someone to make decisions for me both with IRA, Roth IRA and taxable accounts. I don't seem to get 'all encompassing' advice with my current adviser insofar as, for instance,tax ramifications. Also, their cost seems to be comparatively steep. I am retired and I realize that just a 0.5 % reduction in cost over 20/30 years can be substantial. On the other hand, I realize that wise investment advice can an advantage worth paying.

If there has been such a comparison in this blog please let me know but I am otherwise open to listening for any advice that can be offered.
Welcome to the Forum !!!

Be sure to get your advisor a box of Kleenex as a going away present. He/She is gonna miss you :(

If you have the ability to evaluate their proposals, then you have the ability to manage the accounts yourself.

Why pay an assets under management fee ?

Lots of folks here to assist as well. You can do it.... you're a Boglehead now !!

Kevin