Does our adviser hate us - Brokerage Account help please

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justaguy01
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Does our adviser hate us - Brokerage Account help please

Post by justaguy01 » Mon May 13, 2019 1:33 pm

I’ve been naive and complacent with the management of my money. Please don’t yell or scold, I know, I’m dumb.
We live frugally and I thought that was enough.


We (myself, wife, and our 4 children) are blessed and have a wonderful life. I’m 39, my wife is 40 – children between 9 & 13. We fully fund my 401k, RothIRA and her IRA. We have a 4 month emergency fund in MM; contribute to 529 plans for all of our children and our only debt is our home ($201,000, Zillow estimates value around $515,000). We also contribute $300/month to a brokerage account (assets listed below).

I have allowed our adviser (that we have had since 2003) to manage all of our buckets.

I think they are all less than great but it looks like our Brokerage account may be especially rough (between this account and our 3 IRAs we have a total of 38 different funds). It hasn’t been easy getting the numbers out of them – but here they are.

ASSET NAME TICKER; Gross Expense Ratio; Deferred Load; 12B-1
DIAMOND HILL LARGE CAP C DHLCX; 1.71%; 1.00; 1
FIDELITY ADV NEW INSIGHTS C FNICX; 1.62%; 1; 1
FRANKLIN INCOME FUND - CLASS C FCISX; 1.12%; 1; 0.65
FRANKLIN SMALL CAP GROWTH FCSGX; 1.85%; 1; 1
HARRIS ASSOC INVT OAKMRK OANIX; 0.84%; 0; 0
LOOMIS STRATEGIC INCOME FUND-C NECZX; 1.71%; 1 1
PIMCO DIVIDEND INCOME C PQICX; 1.91%; 1; 1
PIMCO INCOME C PONCX; 1.89%; 1; 1
PIMCO INTL STCKPL TR STRAT C PIPCX; 1.99% 1; 1
PIMCO INVESTMENT CORPORATE C PBDCX; 1.74%; 1; 1
PRIMECAP ODYSSEY FUNDS GROWTH POGRX; 0.65%; 0; 0
VANGUARD HIGH YIELD TAX EXEMP VWALX; 0.09%; 0; 0


So how ugly is it?
In looking at performance – I don’t see how this complex breakdown performs any better than the simple 2 or 3 fund portfolio.
I’ve been scouring the earth to find a resource that shows me that actively managed portfolios are better than passive but I’m coming up empty. I’m to the point now that any more research will just lead to paralysis by analyses.

Question – I really like the Fidelity interface and we happen to have a couple offices close to where I work/live. If I transfer assets to them; how ugly will the cost be? Do I just take the hit now and be done with it?

You’ve heard it all before and I’ve read a good number of stories here – ‘but they are really nice, and they really seem to care’ in reference to advisers. I can't fix yesterday; but with your help I hope I can make tomorrow better.

Thank you all
Last edited by justaguy01 on Mon May 13, 2019 3:21 pm, edited 1 time in total.

Jack FFR1846
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Re: Does our adviser hate us - Brokerage Account help please

Post by Jack FFR1846 » Mon May 13, 2019 1:38 pm

First, your advisor does not hate you, he loves you. Look at all those fees!!!

With Fidelity, it's easy to either have them transfer everything over online or go into the office and ask them to do it. Have a current statement if you go to the office. At the office, tell them you plan to do it yourself and don't want an advisor or account management of any kind. There will then be no management fees whatsoever. You can pretty easily set up either a 3 fund portfolio at Fidelity or buy a target date INDEX fund to just do everything and not have to look at it.

I have a bit over a Million dollars at Fidelity and pay a total of under $200 a year for expense ratio which is my total of all fees.
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retiredjg
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Re: Does our adviser hate us - Brokerage Account help please

Post by retiredjg » Mon May 13, 2019 1:51 pm

It's ugly for you. Nice for the person who has been selling you this garbage. Who does this "advisor" work for?

Ugly does not mean fatal. This is all fixable.

The expense ratios alone are high. Replacing these funds with lower cost funds will offset the deferred loads you may have to pay. Eventually, you will be coming out on the good end of all this.

Just how big is this taxable account? Have you held these funds long enough for the deferred load to be gone?

mptfan
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Re: Does our adviser hate us - Brokerage Account help please

Post by mptfan » Mon May 13, 2019 2:01 pm

justaguy01 wrote:
Mon May 13, 2019 1:33 pm

So how ugly is it?
Very, but you can fix it. Don't beat yourself up about the past. I hate to ask, but are you paying account maintenance fees or AUM (assets under management) fees on top of those high expense ratios? I suspect you are.
Last edited by mptfan on Mon May 13, 2019 2:03 pm, edited 1 time in total.

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oldcomputerguy
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Re: Does our adviser hate us - Brokerage Account help please

Post by oldcomputerguy » Mon May 13, 2019 2:02 pm

If you're contemplating moving to Fidelity, it's worth noting here the post from Jack FFR1846:
You can pretty easily set up either a 3 fund portfolio at Fidelity or buy a target date INDEX fund to just do everything and not have to look at it.
Notice that he capitalized the word "INDEX". This is because Fidelity has two different "flavors", if you will, of target-date funds. One type, the "Fidelity Freedom Funds", consists of actively-managed holdings and has higher ERs ranging from 0.49% to 0.75%, while the other type, the "Fidelity Freedom Index Funds", are passively-managed versions holding passively-managed funds as their holdings, with ERs ranging from 0.08% to 0.14%. If you decide you want to go with a Fidelity target-date fund, be careful of exactly what you're getting.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

NotWhoYouThink
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Re: Does our adviser hate us - Brokerage Account help please

Post by NotWhoYouThink » Mon May 13, 2019 2:02 pm

Your advisor is trained in sales, not finance or investing. His corporate overlords have recommended this type of portfolio, and told him how to sell it to you. Probably, he believes that they are smarter and righter than you are, and he thinks he's doing you lots of good while also making money. What a world we live in! He's wrong, but that doesn't make him hostile.

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justaguy01
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Re: Does our adviser hate us - Brokerage Account help please

Post by justaguy01 » Mon May 13, 2019 2:03 pm

retiredjg wrote:
Mon May 13, 2019 1:51 pm
It's ugly for you. Nice for the person who has been selling you this garbage. Who does this "advisor" work for?

Ugly does not mean fatal. This is all fixable.

The expense ratios alone are high. Replacing these funds with lower cost funds will offset the deferred loads you may have to pay. Eventually, you will be coming out on the good end of all this.

Just how big is this taxable account? Have you held these funds long enough for the deferred load to be gone?
About $80,000 in the account - I'm checking on how long I have owned them.....

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justaguy01
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Re: Does our adviser hate us - Brokerage Account help please

Post by justaguy01 » Mon May 13, 2019 2:05 pm

mptfan wrote:
Mon May 13, 2019 2:01 pm
justaguy01 wrote:
Mon May 13, 2019 1:33 pm

So how ugly is it?
Very, but you can fix it. Don't beat yourself up about the past. I hate to ask, but are you paying account maintenance fees or AUM (assets under management) fees on top of those high expense ratios? I suspect you are.
Not on this account (AUM or maint. fees that is)

mptfan
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Re: Does our adviser hate us - Brokerage Account help please

Post by mptfan » Mon May 13, 2019 2:07 pm

justaguy01 wrote:
Mon May 13, 2019 1:33 pm
I’ve been scouring the earth to find a resource that shows me that actively managed portfolios are better than passive but I’m coming up empty.
The reason you can't find it is because it does not exist...the opposite is true... low cost index investing beats active management most of the time.

After 10 years, 85 percent of large cap funds underperformed the S&P 500, and after 15 years, nearly 92 percent are trailing the index.

https://www.cnbc.com/2019/03/15/active- ... exing.html

Congratulations for opening your eyes to reality and taking control of your own money.
Last edited by mptfan on Mon May 13, 2019 2:11 pm, edited 1 time in total.

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BL
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Re: Does our adviser hate us - Brokerage Account help please

Post by BL » Mon May 13, 2019 2:10 pm

Class C funds means he is getting a 1% 12b-1 kickback from the company with those expensive ERs, so of course he loves having you! Also there is a deferred load of 1% to pay if you sell within 1 year, IIRC.

Check Fidelity Freedom Index funds if you want simplicity. Choose the date by the % bonds you want.
(Bonds in or out of the target date funds generate ordinary income taxes, but it is so much better than what you have. If you have high taxes then municipal bonds would work, otherwise they probably won't generate as much as bonds you pay taxes on.

There are links in the Wiki to the 3-fund portfolio: all you need is a total US stock market, total International and a total bond market or similar. As long as you stick with index funds at Fidelity you are probably ok (0.0 to 0.3% ER (Expense Ratio) should be fine.) If you post according to "asking portfolio questions" in Help threads, you can get good advice here. Beware of asking what to invest in because that would open up the chance for them to sell you higher-ER funds. Ask about bonuses and/or free selling/buying. If you are uncertain and susceptible to investing advice, consider going to Vanguard where they won't give you expensive advice, and you could hire PAS to manage your funds in low-ER funds at 0.3% AUM.

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Re: Does our adviser hate us - Brokerage Account help please

Post by CedarWaxWing » Mon May 13, 2019 2:52 pm

NotWhoYouThink wrote:
Mon May 13, 2019 2:02 pm
Your advisor is trained in sales, not finance or investing. His corporate overlords have recommended this type of portfolio, and told him how to sell it to you. Probably, he believes that they are smarter and righter than you are, and he thinks he's doing you lots of good while also making money. What a world we live in! He's wrong, but that doesn't make him hostile.
Your scenario works for the younger, new members of the sales force. Over time, perhaps this does not hold true for an experienced sales person.

I would consider that a sales force, like any other group, has a bell curve of knowledge, intelligence, and honesty, and fair mindedness unless of course management is very good at selecting for only certain characteristics (such as engaging personality, ability to not be curious, etc).

If there is a bell curve, some of those sales folks are very honest... and therefore cannot stay in that job for years and years unless they never understand what they do and how it affects both them and their client.

My definition of an honest FA is that an FA behaves as a fiduciary, which is what all FAs want their client to think is going to happen. My definition of smart (enough) is that he figures out how it all works and may actually read enough to find out how his business works. Are there really that many helpless investors out there that an FA can explain he/she is not going to do what is best for the client because it does not generate "enough" income for the FA, and that the resulting lost of potential investing returns to the client will likely be more than 50% of their potential returns? Do most FAs not realize what they are actually doing, and never figure that out? Or are they simply silent and not willing to explain the facts of life to their customers.

I suspect most people on this list are not formally trained in finance or investing but over some period of time eventually found rationally written books, and maybe with a little luck also found Bogleheads.org and its great reading list.

If most FAs also never figure that out... and don't become knowledgeable, taking their advice is as harmful as taking the advice of one who figures it out but has no intent to be honest about it. The end result is the same.

Does being a pick pocket make someone hostile? Usually not until the pick pocket is challenged and exposed.

Pickpockets know what they are doing, and I am pretty sure most "FAs" eventually understand what they are actually doing.

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jriding
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Re: Does our adviser hate us - Brokerage Account help please

Post by jriding » Mon May 13, 2019 2:59 pm

You've gotten some excellent advice here. I am curious, is your adviser part of a large national firm or a small locally owned shop? I don't want to derail your thread so will leave the reason for my question for a separate thread.

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Stinky
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Re: Does our adviser hate us - Brokerage Account help please

Post by Stinky » Mon May 13, 2019 3:01 pm

justaguy01 wrote:
Mon May 13, 2019 1:33 pm
I’ve been naive and complacent with the management of my money. Please don’t yell or scold, I know, I’m dumb.
We live frugally and I thought that was enough.

We (myself, wife, and our 4 children) are blessed and have a wonderful life. I’m 39, my wife is 40 – children between 9 & 13. We fully fund my 401k, RothIRA and her IRA. We have a 4 month emergency fund in MM; contribute to 529 plans for all of our children and our only debt is our home ($201,000, Zillow estimates value around $515,000). We also contribute $300/month to a brokerage account (assets listed below).

I have allowed our adviser (that we have had since 2003) to manage all of our buckets.

I think they are all less than great but it looks like our Brokerage account may be especially rough (between this account and our 3 IRAs we have a total of 49 funds). It hasn’t been easy getting the numbers out of them – but here they are.

ASSET NAME TICKER; Gross Expense Ratio; Deferred Load; 12B-1
DIAMOND HILL LARGE CAP C DHLCX; 1.71%; 1.00; 1
FIDELITY ADV NEW INSIGHTS C FNICX; 1.62%; 1; 1
FRANKLIN INCOME FUND - CLASS C FCISX; 1.12%; 1; 0.65
FRANKLIN SMALL CAP GROWTH FCSGX; 1.85%; 1; 1
HARRIS ASSOC INVT OAKMRK OANIX; 0.84%; 0; 0
LOOMIS STRATEGIC INCOME FUND-C NECZX; 1.71%; 1 1
PIMCO DIVIDEND INCOME C PQICX; 1.91%; 1; 1
PIMCO INCOME C PONCX; 1.89%; 1; 1
PIMCO INTL STCKPL TR STRAT C PIPCX; 1.99% 1; 1
PIMCO INVESTMENT CORPORATE C PBDCX; 1.74%; 1; 1
PRIMECAP ODYSSEY FUNDS GROWTH POGRX; 0.65%; 0; 0
VANGUARD HIGH YIELD TAX EXEMP VWALX; 0.09%; 0; 0


So how ugly is it?
In looking at performance – I don’t see how this complex breakdown performs any better than the simple 2 or 3 fund portfolio.
I’ve been scouring the earth to find a resource that shows me that actively managed portfolios are better than passive but I’m coming up empty. I’m to the point now that any more research will just lead to paralysis by analyses.

Question – I really like the Fidelity interface and we happen to have a couple offices close to where I work/live. If I transfer assets to them; how ugly will the cost be? Do I just take the hit now and be done with it?

You’ve heard it all before and I’ve read a good number of stories here – ‘but they are really nice, and they really seem to care’ in reference to advisers. I can't fix yesterday; but with your help I hope I can make tomorrow better.

Thank you all
You've posted information on only your brokerage account, I believe.

What about your IRA and Roth IRA accounts? Are they with the same "advisor"? You say that you have 49 funds - that's a massive number of funds.

I believe that you should consider moving ALL of the money that you have with this "advisor" to Fidelity. Why limit it to just the brokerage account?
Last edited by Stinky on Mon May 13, 2019 3:02 pm, edited 1 time in total.
It's a GREAT day to be alive - Travis Tritt

Topic Author
justaguy01
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Re: Does our adviser hate us - Brokerage Account help please

Post by justaguy01 » Mon May 13, 2019 3:02 pm

jriding wrote:
Mon May 13, 2019 2:59 pm
You've gotten some excellent advice here. I am curious, is your adviser part of a large national firm or a small locally owned shop? I don't want to derail your thread so will leave the reason for my question for a separate thread.
Small locally owned shop

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justaguy01
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Re: Does our adviser hate us - Brokerage Account help please

Post by justaguy01 » Mon May 13, 2019 3:05 pm

Stinky wrote:
Mon May 13, 2019 3:01 pm
justaguy01 wrote:
Mon May 13, 2019 1:33 pm
I’ve been naive and complacent with the management of my money. Please don’t yell or scold, I know, I’m dumb.
We live frugally and I thought that was enough.

We (myself, wife, and our 4 children) are blessed and have a wonderful life. I’m 39, my wife is 40 – children between 9 & 13. We fully fund my 401k, RothIRA and her IRA. We have a 4 month emergency fund in MM; contribute to 529 plans for all of our children and our only debt is our home ($201,000, Zillow estimates value around $515,000). We also contribute $300/month to a brokerage account (assets listed below).

I have allowed our adviser (that we have had since 2003) to manage all of our buckets.

I think they are all less than great but it looks like our Brokerage account may be especially rough (between this account and our 3 IRAs we have a total of 49 funds). It hasn’t been easy getting the numbers out of them – but here they are.

ASSET NAME TICKER; Gross Expense Ratio; Deferred Load; 12B-1
DIAMOND HILL LARGE CAP C DHLCX; 1.71%; 1.00; 1
FIDELITY ADV NEW INSIGHTS C FNICX; 1.62%; 1; 1
FRANKLIN INCOME FUND - CLASS C FCISX; 1.12%; 1; 0.65
FRANKLIN SMALL CAP GROWTH FCSGX; 1.85%; 1; 1
HARRIS ASSOC INVT OAKMRK OANIX; 0.84%; 0; 0
LOOMIS STRATEGIC INCOME FUND-C NECZX; 1.71%; 1 1
PIMCO DIVIDEND INCOME C PQICX; 1.91%; 1; 1
PIMCO INCOME C PONCX; 1.89%; 1; 1
PIMCO INTL STCKPL TR STRAT C PIPCX; 1.99% 1; 1
PIMCO INVESTMENT CORPORATE C PBDCX; 1.74%; 1; 1
PRIMECAP ODYSSEY FUNDS GROWTH POGRX; 0.65%; 0; 0
VANGUARD HIGH YIELD TAX EXEMP VWALX; 0.09%; 0; 0


So how ugly is it?
In looking at performance – I don’t see how this complex breakdown performs any better than the simple 2 or 3 fund portfolio.
I’ve been scouring the earth to find a resource that shows me that actively managed portfolios are better than passive but I’m coming up empty. I’m to the point now that any more research will just lead to paralysis by analyses.

Question – I really like the Fidelity interface and we happen to have a couple offices close to where I work/live. If I transfer assets to them; how ugly will the cost be? Do I just take the hit now and be done with it?

You’ve heard it all before and I’ve read a good number of stories here – ‘but they are really nice, and they really seem to care’ in reference to advisers. I can't fix yesterday; but with your help I hope I can make tomorrow better.

Thank you all
You've posted information on only your brokerage account, I believe.

What about your IRA and Roth IRA accounts? Are they with the same "advisor"? You say that you have 49 funds - that's a massive number of funds.

I believe that you should consider moving ALL of the money that you have with this "advisor" to Fidelity. Why limit it to just the brokerage account?
Correct - only information on brokerage account

Yes - my plan is to move our IRAs and my Roth IRA at the same time (I have an appt Friday at 10am). I know I could do most of the moving without meeting with someone but I'd just feel a bit better sitting across from someone.

They are with the same advisor. 49 funds sounded like a lot me to too; thank you for the confirmation. Some funds are used in multiple accounts so the total number of unique funds are 38. I apologize for the exaggeration.

MotoTrojan
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Re: Does our adviser hate us - Brokerage Account help please

Post by MotoTrojan » Mon May 13, 2019 3:23 pm

This should be criminal.

CedarWaxWing
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Re: Does our adviser hate us - Brokerage Account help please

Post by CedarWaxWing » Mon May 13, 2019 3:29 pm

MotoTrojan wrote:
Mon May 13, 2019 3:23 pm
This should be criminal.
1+

mhalley
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Re: Does our adviser hate us - Brokerage Account help please

Post by mhalley » Mon May 13, 2019 3:54 pm

Good news, stocks are tanking, cap gains are lower than they were. What you should do is sell any losers, sell others to counter the losers, when see how much cap gains you have left. Decide how much taxes you are willing to pay, sell that much each year until gone.

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justaguy01
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Re: Does our adviser hate us - Brokerage Account help please

Post by justaguy01 » Mon May 13, 2019 4:02 pm

mhalley wrote:
Mon May 13, 2019 3:54 pm
Good news, stocks are tanking, cap gains are lower than they were. What you should do is sell any losers, sell others to counter the losers, when see how much cap gains you have left. Decide how much taxes you are willing to pay, sell that much each year until gone.
Making lemonade out of lemons - I like it - thank you!

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Stinky
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Re: Does our adviser hate us - Brokerage Account help please

Post by Stinky » Mon May 13, 2019 4:44 pm

justaguy01 wrote:
Mon May 13, 2019 4:02 pm
mhalley wrote:
Mon May 13, 2019 3:54 pm
Good news, stocks are tanking, cap gains are lower than they were. What you should do is sell any losers, sell others to counter the losers, when see how much cap gains you have left. Decide how much taxes you are willing to pay, sell that much each year until gone.
Making lemonade out of lemons - I like it - thank you!
And the good news is that you can reposition the Roth and IRA accounts without concern about taxes. Only place to think about taxes is in the taxable brokerage account.
It's a GREAT day to be alive - Travis Tritt

KingRiggs
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Re: Does our adviser hate us - Brokerage Account help please

Post by KingRiggs » Mon May 13, 2019 6:04 pm

$80k split across 13 funds...make my head spin!

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justaguy01
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Re: Does our adviser hate us - Brokerage Account help please

Post by justaguy01 » Mon May 13, 2019 8:19 pm

Thank you all very much - I got impatient and started the transfer process this evening (Brokerage, IRA, Roth IRA. I had to wait for wife's IRA due to needing to add her to the account first). You are correct - the transfer (at least so far) couldn't be easier!
I'm thinking: 70% Fidelity ZERO Total Market Index Fund (FZROX), 20% Fidelity ZERO International Index Fund (FZILX), and 10% Fidelity U. S. Bond Index Fund (FXNAX).

michaelingp
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Re: Does our adviser hate us - Brokerage Account help please

Post by michaelingp » Mon May 13, 2019 8:29 pm

CedarWaxWing wrote:
Mon May 13, 2019 2:52 pm

Pickpockets know what they are doing, and I am pretty sure most "FAs" eventually understand what they are actually doing.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

rgs92
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Re: Does our adviser hate us - Brokerage Account help please

Post by rgs92 » Mon May 13, 2019 8:40 pm

Your approach sounds great (except for the asset allocation of 90% equities). I would say about 60/40 Equities/Fixed Income.

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Taylor Larimore
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Re: Does our adviser hate us - Brokerage Account help please

Post by Taylor Larimore » Mon May 13, 2019 8:57 pm

justaguy01 wrote:
Mon May 13, 2019 8:19 pm
Thank you all very much - I got impatient and started the transfer process this evening (Brokerage, IRA, Roth IRA. I had to wait for wife's IRA due to needing to add her to the account first). You are correct - the transfer (at least so far) couldn't be easier!
I'm thinking: 70% Fidelity ZERO Total Market Index Fund (FZROX), 20% Fidelity ZERO International Index Fund (FZILX), and 10% Fidelity U. S. Bond Index Fund (FXNAX).
justaguy01:

Your thinking is sound. You are intending to use a very low-cost, very diversified and simple Fidelity Three-Fund Portfolio.

Your intended portfolio of 90% stocks may be too risky for your personal situation.

Asset-allocation is even more important than your securities because your asset-allocation determines your expected return and expected risk. Use this link to help you design the best stock/bond ratio:

Investor Questionnaire

Read my "Simplicity" link below.

Best wishes.
Taylor
Last edited by Taylor Larimore on Mon May 13, 2019 9:03 pm, edited 1 time in total.
"Simplicity is the master key to financial success." -- Jack Bogle

Ferdinand2014
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Re: Does our adviser hate us - Brokerage Account help please

Post by Ferdinand2014 » Mon May 13, 2019 8:59 pm

justaguy01 wrote:
Mon May 13, 2019 8:19 pm
Thank you all very much - I got impatient and started the transfer process this evening (Brokerage, IRA, Roth IRA. I had to wait for wife's IRA due to needing to add her to the account first). You are correct - the transfer (at least so far) couldn't be easier!
I'm thinking: 70% Fidelity ZERO Total Market Index Fund (FZROX), 20% Fidelity ZERO International Index Fund (FZILX), and 10% Fidelity U. S. Bond Index Fund (FXNAX).
Great funds. Fidelity is a great option. That will get you an incredibly low cost 3 fund portfolio for essentially $20/year of expense ratio cost vs about $1,200 now with your current funds. Your asset allocation at 10% bonds is aggressive. This may be perfectly appropriate based on your time horizon, other investments, etc. Also, bonds (FXNAX) in taxable incur more taxes then the stock funds. It’s important to look at your overall investments (brokerage, ROTH, 401k, etc) in your asset allocation choice.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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Re: Does our adviser hate us - Brokerage Account help please

Post by 2commaBH » Mon May 13, 2019 9:14 pm

Agree with many of the other posters. A few other thoughts:

- Having just done something similar for a relative, be prepared for (and try to minimize) transaction costs to sell all of this junk (and maybe to close the account). It really is adding insult to injury but is a necessary cost.

- I know your instinct will be to sell everything, but be aware of the tax implications - it may be worth it to stagger the sales into the next taxable year (then again, it may not) to avoid capital gains.

- You like Fidelity and that comfort level is important, but before you commit to anything take a look at Vanguard too. I prefer investing there (even though the user interface is not as good) because it lets me buy Vanguard ETFs commission free, which I prefer to mutual funds. Different strokes for different folks, but since you're building your foundation now for many years to come, make sure it's solid.

Good luck and welcome to the right path. :)

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Re: Does our adviser hate us - Brokerage Account help please

Post by bltn » Mon May 13, 2019 9:19 pm

BL wrote:
Mon May 13, 2019 2:10 pm
Class C funds means he is getting a 1% 12b-1 kickback from the company with those expensive ERs, so of course he loves having you! Also there is a deferred load of 1% to pay if you sell within 1 year, IIRC.

Check Fidelity Freedom Index funds if you want simplicity. Choose the date by the % bonds you want.
(Bonds in or out of the target date funds generate ordinary income taxes, but it is so much better than what you have. If you have high taxes then municipal bonds would work, otherwise they probably won't generate as much as bonds you pay taxes on.

There are links in the Wiki to the 3-fund portfolio: all you need is a total US stock market, total International and a total bond market or similar. As long as you stick with index funds at Fidelity you are probably ok (0.0 to 0.3% ER (Expense Ratio) should be fine.) If you post according to "asking portfolio questions" in Help threads, you can get good advice here. Beware of asking what to invest in because that would open up the chance for them to sell you higher-ER funds. Ask about bonuses and/or free selling/buying. If you are uncertain and susceptible to investing advice, consider going to Vanguard where they won't give you expensive advice, and you could hire PAS to manage your funds in low-ER funds at 0.3% AUM.
That last sentence is key. With your inexperience in managing your money (currently), I would strongly consider Vanguard. Having accounts at both Fidelity and Vanguard for years, I think you may be better served at Vanguard. But ,heck, either one will be an improvement.
Congratulations on beginning to manage your own money.

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