Wife's Roth @ a Financial Advisor

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
bigdawgwill44
Posts: 14
Joined: Sun Sep 09, 2018 11:51 pm

Wife's Roth @ a Financial Advisor

Post by bigdawgwill44 » Wed Sep 12, 2018 4:54 pm

My wife has a Roth IRA with about $ 86,000 in it. She had it prior to us getting married 8 years ago and we have never contributed to it since being married, it has just sat there. We are both 32 years old. We want to start maxing it out every year moving forward. It is currently being "managed" by a financial advisor. I would like to roll that account over to a Vanguard Roth IRA and manage it ourselves to be in much lower cost index funds without high fees. The fees on the funds they have her in are pretty high, I don't know if they charge a management fee, I am sure they do (How do I find this information?). She is skeptical moving from this guy (who she has never met) because the account seems to have done well. Here is how the account is currently being managed:

10% (QQQ) Invesco QQQ ETF
30% (CWGIX) Capital World Growth & Income CL A @ .77
40% (AGTHX) Growth Fund Of America CL A @ .64
20% (MMUFX) MFS Utilities CL A @ 1.01

My questions are:

1) How do you think this account is doing? Is this guy earning his keep?
2) Should we pull the money out and put into index funds in a vanguard account for low fees?
3) Should we meet with him?

Any help or advice would be greatly appreciated. If this guy is doing a good job I have no problem moving forward and maxing the account each year. Or how can I present information to my wife why we should go somewhere else.
Last edited by bigdawgwill44 on Wed Sep 12, 2018 5:31 pm, edited 2 times in total.

Raabe34
Posts: 243
Joined: Tue Apr 14, 2009 9:58 am

Re: Wife's Roth @ a Financial Advisor

Post by Raabe34 » Wed Sep 12, 2018 4:59 pm

Just so I get the facts right.

Worth 86k today and she is 32 and hasn't been contributed to in 8 years? Either this guys is hitting home runs or someone else funded this pretty good when she was younger.

delamer
Posts: 5813
Joined: Tue Feb 08, 2011 6:13 pm

Re: Wife's Roth @ a Financial Advisor

Post by delamer » Wed Sep 12, 2018 4:59 pm

Please supply names for funds, not just ticker symbols.

bigdawgwill44
Posts: 14
Joined: Sun Sep 09, 2018 11:51 pm

Re: Wife's Roth @ a Financial Advisor

Post by bigdawgwill44 » Wed Sep 12, 2018 5:24 pm

Raabe34 wrote:
Wed Sep 12, 2018 4:59 pm
Just so I get the facts right.

Worth 86k today and she is 32 and hasn't been contributed to in 8 years? Either this guys is hitting home runs or someone else funded this pretty good when she was younger.
All the money was contributed by her parents when she was younger, I am not sure when they stopped contributing or giving her the money to put in the account. I just know everything stopped in 2012 after we got married.

User avatar
ruralavalon
Posts: 13728
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Wife's Roth @ a Financial Advisor

Post by ruralavalon » Wed Sep 12, 2018 5:29 pm

bigdawgwill44 wrote:
Wed Sep 12, 2018 4:54 pm
My wife has a Roth IRA with about $ 86,000 in it. She had it prior to us getting married 8 years ago and we have never contributed to it since being married, it has just sat there. We are both 32 years old. We want to start maxing it out every year moving forward. It is currently being "managed" by a financial advisor. I would like to roll that account over to a Vanguard Roth IRA and manage it ourselves to be in much lower cost index funds without high fees. The fees on the funds they have her in are pretty high, I don't know if they charge a management fee, I am sure they do (How do I find this information?). She is skeptical moving from this guy (who she has never met) because the account seems to have done well. Here is how the account is currently being managed:

QQQ 10%
CWGIX 30% @ .77
AGTHX 40% @ .64
MMUFX 20% @ 1.01

My questions are:

1) How do you think this account is doing? Is this guy earning his keep?
2) Should we pull the money out and put into index funds in a vanguard account for low fees?
3) Should we meet with him?

Any help or advice would be greatly appreciated. If this guy is doing a good job I have no problem moving forward and maxing the account each year. Or how can I present information to my wife why we should go somewhere else.
delamer wrote:
Wed Sep 12, 2018 4:59 pm
Please supply names for funds, not just ticker symbols.
I agree.

Also:

1) you can just call and what fees they charge. What have the account returns been year to date and over the past years?
2) don't just pull the money out, you want to do a rollover of the account to a Roth IRA at Vanguard. Just call Vanguard, tell them you want a rollover to a Roth IRA at Vanguard with a "trustee to trustee" transfer. Vanguard will help you out with the paperwork; and
3) I don't see a reason to meet with him.
Last edited by ruralavalon on Wed Sep 12, 2018 5:39 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

bigdawgwill44
Posts: 14
Joined: Sun Sep 09, 2018 11:51 pm

Re: Wife's Roth @ a Financial Advisor

Post by bigdawgwill44 » Wed Sep 12, 2018 5:30 pm

delamer wrote:
Wed Sep 12, 2018 4:59 pm
Please supply names for funds, not just ticker symbols.
Updated in original post

Jack FFR1846
Posts: 7631
Joined: Tue Dec 31, 2013 7:05 am

Re: Wife's Roth @ a Financial Advisor

Post by Jack FFR1846 » Wed Sep 12, 2018 5:36 pm

Costs matter. They subtract from the bottom line on the account. I did a quick calculation in my head of her overall expense ratio. At that number, her yearly cost (just the ER's) is more than my total cost. But my portfolio is over $2.3 million. If the advisor charges 1%, she's paying about tripple what I pay on my portfolio.
Bogle: Smart Beta is stupid

delamer
Posts: 5813
Joined: Tue Feb 08, 2011 6:13 pm

Re: Wife's Roth @ a Financial Advisor

Post by delamer » Wed Sep 12, 2018 5:40 pm

It’s impossible to know how well the advisor has done, given that you don’t know what the contributions have been.

It is an aggressive portfolio, but that is OK given your wife’s age.

But there is no need to pay those kinds of fees on the funds themselves, on top of any management fee.

Do the transfer to Vanguard or another low cost provider.

Consider one of the lazy portfolios outlined here: https://www.bogleheads.org/wiki/Lazy_portfolios

Mr.BB
Posts: 547
Joined: Sun May 08, 2016 10:10 am

Re: Wife's Roth @ a Financial Advisor

Post by Mr.BB » Wed Sep 12, 2018 6:33 pm

"She is skeptical moving from this guy (who she has never met) because the account seems to have done well."
You can tell your wife that everyone is a genius in a bull market.
If you want to take this a step farther. Look at her old statements from eight years ago which fund(s) she had and compare those funds for the last eight years versus an index fund; and don't forget to take out the cost of fund's expense ratio along the way. (lots of calculators online that will do that for you).
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

User avatar
cheese_breath
Posts: 7822
Joined: Wed Sep 14, 2011 7:08 pm

Re: Wife's Roth @ a Financial Advisor

Post by cheese_breath » Wed Sep 12, 2018 7:10 pm

bigdawgwill44 wrote:
Wed Sep 12, 2018 4:54 pm
...She is skeptical moving from this guy (who she has never met) because the account seems to have done well....
Compared to what? The whole stock market's done well for the past few years. What's she measuring her Roth's increase against?
The surest way to know the future is when it becomes the past.

123
Posts: 3627
Joined: Fri Oct 12, 2012 3:55 pm

Re: Wife's Roth @ a Financial Advisor

Post by 123 » Wed Sep 12, 2018 7:16 pm

You may get some significant push-back from your spouse if you try to do anything with her Roth account. Since the parents funded the account they likley also opened it and may have choosen a financial adviser who manages their other accounts (this would account for your spouse never having met the adviser). Your FIL may be signfiicantly vested in what happens with the account and your spouse may not be interested in "going up" against him, just sayin'.

All that said, If she were my spoue I would move it to Vanguard.
The closest helping hand is at the end of your own arm.

ExitStageLeft
Posts: 799
Joined: Sat Jan 20, 2018 4:02 pm

Re: Wife's Roth @ a Financial Advisor

Post by ExitStageLeft » Wed Sep 12, 2018 8:00 pm

https://www.portfoliovisualizer.com/bac ... tion6_2=30

Subtract out the financial advisor fee and she probably would have done better at Vanguard.

Elysium
Posts: 1153
Joined: Mon Apr 02, 2007 6:22 pm

Re: Wife's Roth @ a Financial Advisor

Post by Elysium » Wed Sep 12, 2018 8:16 pm

OP,

I agree with your wife that her account is doing well. 70% of it is invested in two American funds that are growth oriented. I have not tracked them specifically, however, they have a pretty solid track record in general. They may or may not be ahead of the index funds always, but I don't think they will blow up badly either. They are team managed and I hear they have a pretty solid process of selecting reasonably priced growth stocks. As for QQQ, it's basically a tech fund and since tech has been on a tear for the last several years, it's no wonder it has done well. That said, tech tends to land very heavily. Again, he has only place 10% of her portfolio on this fund, which means he is using it for some extra gains not betting the farm. I don't know much about the last fund, but from the name it implies a play on dividends. Something to off set the growth heavy portfolio with some dividend paying stocks.

Overall, not a terrible job, and he already has got his commission through the front load American fund compensates advisors.

You may try to convince her to move to index funds, then again, she may not agree since the account has done well, in that case I wouldn't say it will be terrible decision, but then again who knows what the advisor will do in future.

Elysium
Posts: 1153
Joined: Mon Apr 02, 2007 6:22 pm

Re: Wife's Roth @ a Financial Advisor

Post by Elysium » Wed Sep 12, 2018 8:29 pm

OP, I had a look at the funds and the two American funds have done pretty well over the years compared to the index, and they are relatively less risky as well compared to index, based on drawdowns that were lower. Anyhow, question is are there any ongoing fees or just the initial load which he got paid directly. If so how much is the fees? you may want to keep it around in case you need any advice in future especially if your wife has no interest in finance she is not likely to understand anything you may end up doing with Vanguard. To make matters worse, if you move now to Vanguard and place everything in index funds and the market tanks soon after, her new portfolio will sink before it shows a profit, and that can be psychologically devastating, not to speak anything about your standing in front of her :twisted:

SoAnyway
Posts: 120
Joined: Tue Jul 31, 2018 11:49 pm

Re: Wife's Roth @ a Financial Advisor

Post by SoAnyway » Wed Sep 12, 2018 8:49 pm

123 wrote:
Wed Sep 12, 2018 7:16 pm
You may get some significant push-back from your spouse if you try to do anything with her Roth account. Since the parents funded the account they likley also opened it and may have choosen a financial adviser who manages their other accounts (this would account for your spouse never having met the adviser). Your FIL may be signfiicantly vested in what happens with the account and your spouse may not be interested in "going up" against him, just sayin'.

All that said, If she were my spoue I would move it to Vanguard.
+1.
OP, this is a relationship issue/conversation with your wife, and you can decide whether it's worth having that conversation taking all (non-posted) factors into account. You (and others who've posted) are correct that the fees are higher than optimal, and the "advisor" probably needs to go. As others upthread said, "everyone's a genius in a bull market" and "'done well' compared to WHAT?". That said, "happy wife, happy life." If push comes to shove, leave the Roth with high-fee bozo. As for NEW Roth contributions, have your wife start a new Roth at Vanguard. Then you can at least be comparing apples to apples - but do so over long-term that includes downturn. As for your specific questions:
1. Dunno - See "everyone's a genius in a bull market."
2. Yes, if you can persuade DW. Otherwise, see "happy wife, happy life".
3. No need to meet. What would you hope to get out of it?

97trophy
Posts: 2
Joined: Tue Nov 21, 2017 9:57 pm

Re: Wife's Roth @ a Financial Advisor

Post by 97trophy » Wed Sep 12, 2018 9:17 pm

My guess is you are probably paying a 1.5% adviser fee, that equals $1290 per year.

Take that amount out of the back in cash and put it on the table in front of your wife and explain you can save that each amount year by ditching the adviser.

When people see cold hard cash it makes them think differently.

bigdawgwill44
Posts: 14
Joined: Sun Sep 09, 2018 11:51 pm

Re: Wife's Roth @ a Financial Advisor

Post by bigdawgwill44 » Thu Sep 13, 2018 10:17 am

SoAnyway wrote:
Wed Sep 12, 2018 8:49 pm
123 wrote:
Wed Sep 12, 2018 7:16 pm
You may get some significant push-back from your spouse if you try to do anything with her Roth account. Since the parents funded the account they likley also opened it and may have choosen a financial adviser who manages their other accounts (this would account for your spouse never having met the adviser). Your FIL may be signfiicantly vested in what happens with the account and your spouse may not be interested in "going up" against him, just sayin'.

All that said, If she were my spoue I would move it to Vanguard.
+1.
OP, this is a relationship issue/conversation with your wife, and you can decide whether it's worth having that conversation taking all (non-posted) factors into account. You (and others who've posted) are correct that the fees are higher than optimal, and the "advisor" probably needs to go. As others upthread said, "everyone's a genius in a bull market" and "'done well' compared to WHAT?". That said, "happy wife, happy life." If push comes to shove, leave the Roth with high-fee bozo. As for NEW Roth contributions, have your wife start a new Roth at Vanguard. Then you can at least be comparing apples to apples - but do so over long-term that includes downturn. As for your specific questions:
1. Dunno - See "everyone's a genius in a bull market."
2. Yes, if you can persuade DW. Otherwise, see "happy wife, happy life".
3. No need to meet. What would you hope to get out of it?
You make some very good points, I don't want to switch things over and the market tanks and I get blamed for screwing with the fund. I think once I show her how much in fees is coming out of the account every year that will win her over.

ponyboy
Posts: 553
Joined: Fri Feb 06, 2015 10:39 am

Re: Wife's Roth @ a Financial Advisor

Post by ponyboy » Thu Sep 13, 2018 11:01 am

Your wife is 32...hasnt contributed for 8 years...so stopped when she was 24.

How is it possible the account is worth $86,000 today? Even if her parents were contributing...that means she would have to have earned income to even contribute. When did her parents start contributing, when she was 16? They could never contribute more than $5500/year...assuming she had that much in earned income.

Either way...I would stick with this financial advisor. They must be a wizard in the amount of return they're generating on that account. Either that or there is more to this story.

bigdawgwill44
Posts: 14
Joined: Sun Sep 09, 2018 11:51 pm

Re: Wife's Roth @ a Financial Advisor

Post by bigdawgwill44 » Thu Sep 13, 2018 11:06 am

She has had income since the age of 16 and the Roth was maxed until she was 24. Also she turns 33 next month.

turno77
Posts: 40
Joined: Tue May 14, 2013 2:45 pm

Re: Wife's Roth @ a Financial Advisor

Post by turno77 » Thu Sep 13, 2018 11:20 am

OP, you mentioned you want to start maxing out this Roth IRA going forward. If you start to contribute to it again, you would be faced with sales charges on contributions. Instead, you could start up a new Roth at Vanguard or elsewhere that is low-cost while you decide what to do with this one.

bigdawgwill44
Posts: 14
Joined: Sun Sep 09, 2018 11:51 pm

Re: Wife's Roth @ a Financial Advisor

Post by bigdawgwill44 » Thu Sep 13, 2018 11:28 am

turno77 wrote:
Thu Sep 13, 2018 11:20 am
OP, you mentioned you want to start maxing out this Roth IRA going forward. If you start to contribute to it again, you would be faced with sales charges on contributions. Instead, you could start up a new Roth at Vanguard or elsewhere that is low-cost while you decide what to do with this one.
Can you explain further about the charges? I have never heard of that.

Darth Xanadu
Posts: 426
Joined: Sat Jan 27, 2018 1:47 am
Location: Middle Earth

Re: Wife's Roth @ a Financial Advisor

Post by Darth Xanadu » Thu Sep 13, 2018 11:38 am

bigdawgwill44 wrote:
Thu Sep 13, 2018 11:28 am
turno77 wrote:
Thu Sep 13, 2018 11:20 am
OP, you mentioned you want to start maxing out this Roth IRA going forward. If you start to contribute to it again, you would be faced with sales charges on contributions. Instead, you could start up a new Roth at Vanguard or elsewhere that is low-cost while you decide what to do with this one.
Can you explain further about the charges? I have never heard of that.
I think this is in reference to the front sales loads some funds have. I know certain classes of American Funds have them. So they are skimming 5%-6% up front.
"A courageous teacher, failure is."

turno77
Posts: 40
Joined: Tue May 14, 2013 2:45 pm

Re: Wife's Roth @ a Financial Advisor

Post by turno77 » Thu Sep 13, 2018 11:43 am

bigdawgwill44 wrote:
Thu Sep 13, 2018 11:28 am
turno77 wrote:
Thu Sep 13, 2018 11:20 am
OP, you mentioned you want to start maxing out this Roth IRA going forward. If you start to contribute to it again, you would be faced with sales charges on contributions. Instead, you could start up a new Roth at Vanguard or elsewhere that is low-cost while you decide what to do with this one.
Can you explain further about the charges? I have never heard of that.
Typically when you purchase shares through a financial advisor, you pay sales charges (or front end loads). For your wife's American Funds, that is 4.5%.
https://www.americanfunds.com/individua ... icing.html

Kevin8696
Posts: 140
Joined: Mon Oct 08, 2012 7:45 pm

Re: Wife's Roth @ a Financial Advisor

Post by Kevin8696 » Thu Sep 13, 2018 11:43 am

bigdawgwill44 wrote:
Wed Sep 12, 2018 4:54 pm
My wife has a Roth IRA with about $ 86,000 in it. She had it prior to us getting married 8 years ago and we have never contributed to it since being married, it has just sat there. We are both 32 years old. We want to start maxing it out every year moving forward. It is currently being "managed" by a financial advisor. I would like to roll that account over to a Vanguard Roth IRA and manage it ourselves to be in much lower cost index funds without high fees. The fees on the funds they have her in are pretty high, I don't know if they charge a management fee, I am sure they do (How do I find this information?). She is skeptical moving from this guy (who she has never met) because the account seems to have done well. Here is how the account is currently being managed:

10% (QQQ) Invesco QQQ ETF
30% (CWGIX) Capital World Growth & Income CL A @ .77
40% (AGTHX) Growth Fund Of America CL A @ .64
20% (MMUFX) MFS Utilities CL A @ 1.01

My questions are:

1) How do you think this account is doing? Is this guy earning his keep?
2) Should we pull the money out and put into index funds in a vanguard account for low fees?
3) Should we meet with him?

Any help or advice would be greatly appreciated. If this guy is doing a good job I have no problem moving forward and maxing the account each year. Or how can I present information to my wife why we should go somewhere else.
Looks to me like you could do better in a Vanguard fund or funds.

Using the funds and allocations you provided, I ran a quick 10-yr comparison (using Portfolio Visualizer) between your four fund portfolio (all stock funds) to VG Total Stock Market Index Fund (VTSAX). I used only the fund results, i.e. I did not apply any management fee.

https://www.portfoliovisualizer.com/bac ... ion5_2=100

Summary of results:

Your Portfolio: 10-yr avg annual return 7.26%, Std deviation 15.11%.

VTSAX: 10-yr avg annual return 8.72%, Std deviation 15.58%.

The difference in the annual average return of 1.46% is due in large part to the higher expense ratio. Your portfolio's weighted avg expense ratio is 0.71%, versus 0.04% for VTSAX. Note also that the three mutual funds in your portfolio each have a 0.25% 12b-1 marketing fee embedded in the expense ratio, which serves to drive up costs, and thus drive down your portfolio returns. Yes, costs do matter.

Lastly, if there is an asset under management fee associated with the account, that would make the performance difference even greater.

billfromct
Posts: 720
Joined: Tue Dec 03, 2013 9:05 am

Re: Wife's Roth @ a Financial Advisor

Post by billfromct » Thu Sep 13, 2018 11:46 am

I believe that CWGIX (Capital World G&I), MMUFX (MFS Utilities) & AGTHX (Growth Fund of America) all have a 5.75% sales charge.

That has to be taken into account when comparing with the Vanguard funds.

bill

bigdawgwill44
Posts: 14
Joined: Sun Sep 09, 2018 11:51 pm

Re: Wife's Roth @ a Financial Advisor

Post by bigdawgwill44 » Thu Sep 13, 2018 12:10 pm

Do you pay the 5.75 fee every time you contribute or was that fee paid for back when the account was originally opened?

Dottie57
Posts: 4273
Joined: Thu May 19, 2016 5:43 pm

Re: Wife's Roth @ a Financial Advisor

Post by Dottie57 » Thu Sep 13, 2018 12:23 pm

bigdawgwill44 wrote:
Thu Sep 13, 2018 12:10 pm
Do you pay the 5.75 fee every time you contribute or was that fee paid for back when the account was originally opened?
Every purchase will have a front end load fee.

bigdawgwill44
Posts: 14
Joined: Sun Sep 09, 2018 11:51 pm

Re: Wife's Roth @ a Financial Advisor

Post by bigdawgwill44 » Thu Sep 13, 2018 12:45 pm

Dottie57 wrote:
Thu Sep 13, 2018 12:23 pm
bigdawgwill44 wrote:
Thu Sep 13, 2018 12:10 pm
Do you pay the 5.75 fee every time you contribute or was that fee paid for back when the account was originally opened?
Every purchase will have a front end load fee.
Well this fact alone has made the decision what to do moving forward. I'm not paying 5.75% every time we contribute plus the cost for the fund, plus the yearly management fee, that is insanity.
Last edited by bigdawgwill44 on Thu Sep 13, 2018 1:22 pm, edited 1 time in total.

augustwest73
Posts: 9
Joined: Mon Sep 12, 2016 4:36 pm

Re: Wife's Roth @ a Financial Advisor

Post by augustwest73 » Thu Sep 13, 2018 1:07 pm

From a fellow married person...Leave it where it is and just start new contributions somewhere else. It also makes it cleaner regarding community versus individual property. I'm reminded of the time I told my buddy that my wife makes poor choices. His reply was, "She picked you, didn't she?"

Pick your battles and this one just isn't worth it.

Kevin8696
Posts: 140
Joined: Mon Oct 08, 2012 7:45 pm

Re: Wife's Roth @ a Financial Advisor

Post by Kevin8696 » Thu Sep 13, 2018 2:03 pm

bigdawgwill44 wrote:
Thu Sep 13, 2018 12:45 pm
Dottie57 wrote:
Thu Sep 13, 2018 12:23 pm
bigdawgwill44 wrote:
Thu Sep 13, 2018 12:10 pm
Do you pay the 5.75 fee every time you contribute or was that fee paid for back when the account was originally opened?
Every purchase will have a front end load fee.
Well this fact alone has made the decision what to do moving forward. I'm not paying 5.75% every time we contribute plus the cost for the fund, plus the yearly management fee, that is insanity.
The 5.75% sales charge is deducted upfront when you make a purchase. Thus a $1,000 contribution would have $57.50 deducted, with the net amount of $942.50 being invested in the fund selected. Ka-ching !!

User avatar
Earl Lemongrab
Posts: 5262
Joined: Tue Jun 10, 2014 1:14 am

Re: Wife's Roth @ a Financial Advisor

Post by Earl Lemongrab » Thu Sep 13, 2018 2:20 pm

SoAnyway wrote:
Wed Sep 12, 2018 8:49 pm
2. Yes, if you can persuade DW. Otherwise, see "happy wife, happy life".
More like, "it's her money so it's her decision."
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

User avatar
Earl Lemongrab
Posts: 5262
Joined: Tue Jun 10, 2014 1:14 am

Re: Wife's Roth @ a Financial Advisor

Post by Earl Lemongrab » Thu Sep 13, 2018 2:28 pm

Frequently when there is an AUM fee, loads are waived. Your wife should be able to find out this information with a talk or email with the adviser.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

User avatar
ruralavalon
Posts: 13728
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Wife's Roth @ a Financial Advisor

Post by ruralavalon » Thu Sep 13, 2018 4:42 pm

bigdawgwill44 wrote:
Thu Sep 13, 2018 10:17 am
. . . . .
You make some very good points, I don't want to switch things over and the market tanks and I get blamed for screwing with the fund. I think once I show her how much in fees is coming out of the account every year that will win her over.
I think its a very good idea to help her look at what these expenses cost her in the long-run, so she can make her own decision about this.

Low expenses are critical to long-term investing performance. Seemingly small annual fees have a large cumulative impact over time. Here is a calculator she could use to estimate the impact of investing expenses. Bankrate.com, "Mutual fund fees calculator".

Here are two Morningstar articles se could consider.

Also, low expense ratios are the best predictor of future performance. Morningstar, 8/9/10 . “If there's anything in the whole world of mutual funds that you can take to the bank, it's that expense ratios help you make a better decision. In every single time period and data point tested, low-cost funds beat high-cost funds.” “Investors should make expense ratios a primary test in fund selection. They are still the most dependable predictor of performance.”

"The expense ratio is the most proven predictor of future fund returns." "There are many other things to consider, but investors should make expense ratios their first or second screen." Morningstar, 5/5/18.

billfromct wrote:
Thu Sep 13, 2018 11:46 am
I believe that CWGIX (Capital World G&I), MMUFX (MFS Utilities) & AGTHX (Growth Fund of America) all have a 5.75% sales charge.

That has to be taken into account when comparing with the Vanguard funds.

bill
This will be a 5.75% sales charge (called a front load) on every new contribution buying a fund. Then the expense ratio of the fund is an additional charge annually.

Earl Lemongrab wrote:
Thu Sep 13, 2018 2:28 pm
Frequently when there is an AUM fee, loads are waived. Your wife should be able to find out this information with a talk or email with the adviser.
Yes, she should find out if there is an annual percentage of Assets Under Management (AUM) fee charged, and if the sales charge (front load) is waived.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

NotWhoYouThink
Posts: 2029
Joined: Fri Dec 26, 2014 4:19 pm

Re: Wife's Roth @ a Financial Advisor

Post by NotWhoYouThink » Thu Sep 13, 2018 5:12 pm

She (or you) may be able to determine whether there is an AUM fee by looking at the statements. But most high cost financial advisors make their statements so confusing it won't be easy to tell. You can also check whether she has had the same investments for years with dividends reinvested, or whether the portfolio mix has been changing.

Post Reply