Help my broker is trying to freak me out

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
User avatar
Sandtrap
Posts: 7546
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Help my broker is trying to freak me out

Post by Sandtrap » Wed May 15, 2019 7:23 pm

Step 1 and 2 to "ripping that bandaid off".
. . .
GETTING STARTED
https://www.bogleheads.org/wiki/Getting_started

Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Wiki Bogleheads Wiki: Everything You Need to Know

User avatar
dogagility
Posts: 476
Joined: Fri Feb 24, 2017 6:41 am

Re: Help my broker is trying to freak me out

Post by dogagility » Wed May 15, 2019 8:02 pm

Almond wrote:
Wed May 15, 2019 7:20 pm
My partner wants to know when I got my series seven license, and is still skeptical about doing it ourselves.
You can absolutely do this. Read the links given by Sandtrap, and have your partner read this thread.
Taking "risk" since 1995.

User avatar
celia
Posts: 9442
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Help my broker is trying to freak me out

Post by celia » Thu May 16, 2019 4:21 am

Almond wrote:
Wed May 15, 2019 3:43 pm
... If so why do most people not mange their own funds. Which is the question my partner keeps asking and I don’t know how to answer
Most people don’t have the confidence to manage it themselves. They look at the portfolio a broker set up for them and it looks very confusing to them. Well, it IS CONFUSING because the broker made it that way to look too complex for the account owner to understand it. Most brokers buy way too many different assets when an index fund could do the same thing (and for less cost).

Keep in mind that no-one cares about your money as much as you do. So who better to manage it than you?

It is also recommended that you do your own income taxes. They, too, look hard for a novice to understand, but they aren’t once you understand the different sections (incomes, deductions, credits, tax withholdings). After you do your taxes a couple of times, you can go through the whole year and know what expenses impact your taxes. Maybe you’ll buy a house. Wait, how do mortgage payments impact the taxes? I need to go see a doctor. Wait, how do medical payments impact my taxes? Look, I got a raise! How does that impact my taxes?

My point here is that by understanding your own tax situation, you can become a better financial manager of your assets.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

User avatar
Wiggums
Posts: 1046
Joined: Thu Jan 31, 2019 8:02 am

Re: Help my broker is trying to freak me out

Post by Wiggums » Thu May 16, 2019 4:56 am

celia wrote:
Thu May 16, 2019 4:21 am
My point here is that by understanding your own tax situation, you can become a better financial manager of your assets.
+1

This is very true and I wish I had taken the time to learn earlier.

-ryan-
Posts: 47
Joined: Fri Mar 01, 2019 7:14 am

Re: Help my broker is trying to freak me out

Post by -ryan- » Thu May 16, 2019 8:30 am

At the end of the day, investing effectively is actually an easy activity. Making the big decisions can be a little more difficult (aka: how much do I need to save/invest, what asset allocation will make me comfortable and allow me to reach my goals, etc. etc.) but I still believe the vast majority of people are more than capable of making these decisions without paid help.

While working as a licensed rep I was told, in so many words, that we wouldn't use index funds because clients are generally aware that they can invest in them without our help. We also tended to build portfolios that looked complex or had a complex sounding strategy, and that was at least partly related to giving the illusion that we were earning our 1.00-1.50% take. At one point I believed the rationale behind the portfolios we were creating, but costs do matter, and between fund costs, trading costs and our direct cost, the average person was paying 2.00-3.50% per year on their investments for something that (due to the number of funds involved) acted a lot like an index fund but with much lower compound returns (due to the aforementioned costs).

It was an interesting experience though, and strengthened my resolve that indexing is generally the way to go. We do own a Primecap fund though, and generally I do believe they have done a great job for an active fund, both in terms of reasonable costs and relative performance.

User avatar
ruralavalon
Posts: 15996
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Help my broker is trying to freak me out

Post by ruralavalon » Thu May 16, 2019 10:32 am

Almond wrote:
Wed May 15, 2019 3:38 pm
ruralavalon wrote:
Wed May 15, 2019 11:34 am
Almond wrote:
Wed May 15, 2019 11:15 am
Katietsu wrote:
Sat May 11, 2019 4:33 pm
Please pay attention to the post that pointed out that if you sell non-US stocks and invest the proceeds in VTI, you may be selling low and buying high. At minimum, you will be making a significant change to your asset allocation and should be doing so consciously.

You do not need to continue paying management fees even if you decide not to sell everything right away. You are invested in what appear to be pretty main stream funds. It is quite possible that you can transfer them to a discount brokerage without selling first. You would need to check on each fund.

And I would continue to do more reading and learning.
I think you are going in the right direction. But I think you need a bit more knowledge to take this to the next step.

Thank you for this. I plan to sell international funds, did not list them here, into international such as VUSTX, and us funds into voo or similar. I agree about not selling all at once but some funds have fees close to or at 1% which will hurt over time.

My other concern is % in fixed income. It is almost 50% and I want 70/30. If I sell those at a loss it does offset some gains but will be getting into something like VOO at higher level. So not sure what to do.
I suggest making an overall plan for all accounts first, before buying or selling anything in the taxable account.

Vanguard 500 ETF (VOO) is a reasonable choice for Investing in U.S. stocks. But I suggest instead Vanguard Total Stock Market ETF (VTI) because a little more diversified with the same very low expense ratio.

Turn off any automatic reinvestment of dividends or gains that may have been set up in the taxable account. There is no sense in buying more of anything you might sell soon.

Then you can sell any fund with an unrealized capital loss, and that will offset some of the unrealized capital gains if you sell a funds with gains.

It might help if you simply listed each fund currently in the taxable account (giving fund name, ticker symbol, and expense ratio), along with the amount invested, and the unrealized capital gain/loss status and amount for each investment.

In selling concentrate on high expense and less diversified funds.

There may be some funds in the taxable account worth keeping, such as PrimeCap Odyssey Stock Fund (POSKX) or Dodge & Cox International Stock Fund (DODFX).
I have about $14, 000 in unrealized gains if I sold everything. I think most of that is long term but hard to get a straight answer.

For US stocks I have unrealized gains as follows

T. Rowe Price Blue Chip Growth I TBCIX $3,300 the fee is .57
PRIMECAP Odyssey Stock POSKX $5,214. Fee is .66
CIPX $1,600. Fee is .90
Bridgeway Blue Chip 35 Index BRLIX $2,440 fee is .15
Dodge & Cox Stock Fund DODGX $260 fee .52
total = $12,814 unrealized gains

The rest are at a loss
REIPX -$328 fee .54.
APMRX -$1,205 fee1.05. This is not a US stock fund but I am not sure why I even have it?
APDQX - $582. Fee 1.05
NOSGX -$18 fee 1.00
TORIX -$72 loss fee .96
total = $2,205 loss

I just realized they sold some fund s this year for a total loss of $1,800 in addition to loss listed so I have about $4000. What would you suggest.

In international my biggest gain is
PRIZX $1,500 fee 1.07
OIGIX $800 fee 1.11
total = $2,300 unrealized gains

I have about $700 in losses in other international funds to offset this.
What is your federal tax bracket?

What are the fund names? What is CIPX?

What are the "other international funds"?

What other accounts and investments do you have? Please see "Asking Portfolio Questions".

Please just amend your post using the edit button (the pencil icon near the upper right corner of your post).
Last edited by ruralavalon on Thu May 16, 2019 11:13 am, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

atdharris
Posts: 114
Joined: Wed Jan 02, 2019 3:18 pm

Re: Help my broker is trying to freak me out

Post by atdharris » Thu May 16, 2019 10:58 am

Your broker wants to scare you because he wants to keep you as a client. Depending on his pay structure, he may make a cut off your account. I remember when I cashed out my whole life insurance policy for about $80,000 years ago. My family set me up to talk to our trust account manager about my options. They were pushing an annuity on me, claiming if I did that, I would save on the $10k tax bill I faced on the gains, which was true.

I asked them to send me information on the annuity. Then I looked at the fees - 1.85% management fee, 4.25% transaction fee on fund purchases and sales, and the funds themselves were 1.5% fees minimum. Despite paying the $10k in taxes, I would still come out way ahead if I just took the money and invested it myself. I did that and have no regrets.

User avatar
Darth Xanadu
Posts: 682
Joined: Sat Jan 27, 2018 1:47 am
Location: Middle Earth

Re: Help my broker is trying to freak me out

Post by Darth Xanadu » Thu May 16, 2019 11:08 am

Almond wrote:
Wed May 15, 2019 3:38 pm

I have about $14, 000 in unrealized gains if I sold everything. I think most of that is long term but hard to get a straight answer.
This alone would make me want to jump ship. Inexcusable that they can't give you this information in a matter of seconds.
"A courageous teacher, failure is."

User avatar
onthecusp
Posts: 642
Joined: Mon Aug 29, 2016 3:25 pm

Re: Help my broker is trying to freak me out

Post by onthecusp » Thu May 16, 2019 11:02 pm

Almond wrote:
Wed May 15, 2019 7:20 pm
jibantik wrote:
Wed May 15, 2019 6:45 pm
Almond wrote:
Wed May 15, 2019 5:51 pm
thank you everyone this has been really helpful. Thinking of moving to Merrill Edge. Need to check what I can move in kind. It is hard to believe paying 1% fee on $600k cost about $150k it seems so high and the fact it might be true is so shocking to me I can’t believe anyone would use a broker.
Almond, you may find this chart interesting (or shocking :D). You are taking 100% of the risk, putting up 100% of the capital, and your advisor wants to take 1/3rd of your retirement?? :annoyed

Image

(taken from here)

Wow seeing it like that is just shocking. Do most people just have no idea how much the pair broker is costing them? My partner wants to know when I got my series seven license, and is still skeptical about doing it ourselves. I don’t think managed funds have outdone the three portfolio mix.
Just piling on, but another way to look at a 1% fee comes a little later when you start exploring the concept of 'safe withdrawal rates' in retirement. A rate of 4% is a common selection, sometimes lower, rarely higher. Though we hope and expect better returns in good times a low withdrawal rate gets us safely through down markets for the long run. So after you quit putting money in, the broker will continue to want 1% when you are taking out 4%, so you get to spend only 75 cents out of every dollar you withdraw from your investments. It's the gift you keep on giving to the broker.

retiredjg
Posts: 36798
Joined: Thu Jan 10, 2008 12:56 pm

Re: Help my broker is trying to freak me out

Post by retiredjg » Fri May 17, 2019 5:46 am

onthecusp wrote:
Thu May 16, 2019 11:02 pm
So after you quit putting money in, the broker will continue to want 1% when you are taking out 4%, so you get to spend only 75 cents out of every dollar you withdraw from your investments. It's the gift you keep on giving to the broker.
I too find this to be an effective example to use. But you actually have less than 75 cents to spend because your taxes are included in that 4% as well.

barnaclebob
Posts: 3701
Joined: Thu Aug 09, 2012 10:54 am

Re: Help my broker is trying to freak me out

Post by barnaclebob » Fri May 17, 2019 8:50 am

Don't trust anyone who uses fear to make money from you.

User avatar
onthecusp
Posts: 642
Joined: Mon Aug 29, 2016 3:25 pm

Re: Help my broker is trying to freak me out

Post by onthecusp » Fri May 17, 2019 9:10 am

retiredjg wrote:
Fri May 17, 2019 5:46 am
onthecusp wrote:
Thu May 16, 2019 11:02 pm
So after you quit putting money in, the broker will continue to want 1% when you are taking out 4%, so you get to spend only 75 cents out of every dollar you withdraw from your investments. It's the gift you keep on giving to the broker.
I too find this to be an effective example to use. But you actually have less than 75 cents to spend because your taxes are included in that 4% as well.
More precisely the taxes don't come from the 1% they take, taxes come out of the 3% left over for the "customer" aka "mark".

pkcrafter
Posts: 13446
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: Help my broker is trying to freak me out

Post by pkcrafter » Fri May 17, 2019 10:20 am

Almond, the mechanics of investing are not difficult, the emotional aspects are what cause the difficulty. You are seeing the light; your partner isn't even looking. Every investor is ultimately responsible for his/her own money, so it's far better to know some simple fundamentals than to pass this responsibility to someone else who makes a living from your money.

You have been given good information and useful links, and here's a few more: the S&P Index Versus Active (SPIVA) report. Look at page 9 and below. You will find that about 90% of active funds underperform their related index benchmark over time, and that's without advisory fees.

https://www.spglobal.com/_assets/docume ... h-2019.pdf

The three fund portfolio

viewtopic.php?f=10&t=88005

What you need to do--

Help your partner understand the basics - Use this forum and the Bogleheads' Wiki
Bogleheads' pilosophy

https://www.bogleheads.org/wiki/Boglehe ... philosophy

create a plan, write it down (investment policy statement- Wiki)

implement

Stay the course

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.

User avatar
ruralavalon
Posts: 15996
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Help my broker is trying to freak me out

Post by ruralavalon » Fri May 17, 2019 10:32 am

Almond wrote:
Wed May 15, 2019 7:20 pm
Wow seeing it like that is just shocking. Do most people just have no idea how much the pair broker is costing them? My partner wants to know when I got my series seven license, and is still skeptical about doing it ourselves. I don’t think managed funds have outdone the three portfolio mix.
Suggest that your partner read this very short free pdf book: William Bernstein, "If you Can".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

User avatar
Michael Patrick
Posts: 69
Joined: Wed Dec 19, 2018 10:25 am
Location: Madison, WI

Re: Help my broker is trying to freak me out

Post by Michael Patrick » Fri May 17, 2019 10:45 am

Almond wrote:
Wed May 15, 2019 3:43 pm
Also I just did a calculation using nerd wallet if I leave $600k at 1% AUM fee, not including fund fees, over 15 years the total cost is $208k. WOW is that correct. If so why do most people not mange their own funds. Which is the question my partner keeps asking and I don’t know how to answer
They are very effective at selling their services. If you watch any TV at all, you'll see commercials with images of brokers working nights and weekends on how to maximize income while the clients go play with elephants or some such. Everyone looks so happy, and it's all so reassuring.

zachslow
Posts: 8
Joined: Tue May 07, 2019 12:42 am

Re: Help my broker is trying to freak me out

Post by zachslow » Fri May 17, 2019 11:45 am

Almond wrote:
Sat May 11, 2019 4:04 pm
Thank you everyone for the great advice. I felt I had read and learned a lot about the three fund portfolio but once I was talking with broker I got nervous and him saying such things as — obviously you can do as you want but not the first time I have see clients dump their well managed portfolio only for their new approach to tank etc etc. Yeah, he was freaking me out and It is a joint portfolio so made me even more concerned.

It is a taxable account so will have to pay CG, but agree with the strategy to hold onto any funds with a low fee for now so as to minimize CG. Alternatively I could wait for a market down turn, but that might be a while and in the meantime I am paying fund fees and management fees.

appreciate all the advice and confirmation that I am on the right path.
Hey there. I'm late to the party, but I went through this exact same thing two weeks ago.You can read about the exchange here.
viewtopic.php?f=1&t=280549

It's been really easy to get everything figured out once leaving my broker. Best of luck to you,

User avatar
jakehefty17
Posts: 119
Joined: Fri May 11, 2018 6:48 pm
Location: New York

Re: Help my broker is trying to freak me out

Post by jakehefty17 » Fri May 17, 2019 2:02 pm

Almond wrote:
Wed May 15, 2019 3:43 pm
Also I just did a calculation using nerd wallet if I leave $600k at 1% AUM fee, not including fund fees, over 15 years the total cost is $208k. WOW is that correct. If so why do most people not mange their own funds. Which is the question my partner keeps asking and I don’t know how to answer
FUD. Fear, uncertainty, and doubt.

Salespeople will try to convince you that it's too difficult to do yourself. They will take advantage of human weakness.

"I do this and the portfolio blows up they will probably think I am to blame" - Fear
"I would be getting in at the top of the market, that I wouldn't be fully diversified" - Uncertainty
"...is he right? Am I mad to rip the band aid off?" - Doubt

Some people want their hand held when they cross the road. Others choose to do it themselves. To alleviate FUD, you need to educate yourself.

I'll leave some links from the wiki that helped me get started.
https://www.bogleheads.org/wiki/Boglehe ... philosophy
https://www.bogleheads.org/wiki/Risk_tolerance
https://www.bogleheads.org/wiki/Asset_allocation
https://www.bogleheads.org/wiki/Priorit ... nvestments
https://www.bogleheads.org/wiki/Tax-eff ... _placement
https://www.bogleheads.org/wiki/Asset_a ... e_accounts

Suggested readings will help you understand why index funds make sense. Some also overview savings rates/budgeting techniques/risk tolerance.
I'm partial to "The Only Investment Guide You'll Ever Need" - Andrew Tobias and "The Little Book of Common Sense Investing" - John Bogle.
https://www.bogleheads.org/wiki/Books:_ ... t-up_Books

Share the basics with your partner when you understand it well enough yourself. Be sure-footed in the road ahead and stay the course.
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

ImUrHuckleberry
Posts: 195
Joined: Sat Apr 15, 2017 7:44 am

Re: Help my broker is trying to freak me out

Post by ImUrHuckleberry » Fri May 17, 2019 5:07 pm

Do most people actually pay somebody to manage their finances? Nearly everyone I know rolls their own. It would surprise me if most people pay somebody.

dbr
Posts: 29509
Joined: Sun Mar 04, 2007 9:50 am

Re: Help my broker is trying to freak me out

Post by dbr » Fri May 17, 2019 5:34 pm

ImUrHuckleberry wrote:
Fri May 17, 2019 5:07 pm
Do most people actually pay somebody to manage their finances? Nearly everyone I know rolls their own. It would surprise me if most people pay somebody.
I know lots of people who mention "my/our financial advisor." I just lays low and says nuthin.

User avatar
BolderBoy
Posts: 4368
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

Re: Help my broker is trying to freak me out

Post by BolderBoy » Sat May 18, 2019 10:13 am

Watty wrote:
Sat May 11, 2019 9:56 am
A broker needs to make things seem complex and scary to justify their costs. If you decide to invest in index funds you will not need your broker.
+1. This is a fundamental investing truth.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

Sandi_k
Posts: 1015
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: Help my broker is trying to freak me out

Post by Sandi_k » Sat May 18, 2019 11:25 am

Almond wrote:
Wed May 15, 2019 7:20 pm

Wow seeing it like that is just shocking. Do most people just have no idea how much the pair broker is costing them? My partner wants to know when I got my series seven license, and is still skeptical about doing it ourselves. I don’t think managed funds have outdone the three portfolio mix.
I second the recommendation for Bernstein's If You Can article for your partner. If she won't read that (~14 pages, IIRC), then show her this (John Oliver's epic rant on investment advisors):

https://www.youtube.com/watch?v=gvZSpET11ZY

inbox788
Posts: 6393
Joined: Thu Mar 15, 2012 5:24 pm

Re: Help my broker is trying to freak me out

Post by inbox788 » Tue May 21, 2019 8:03 pm

Almond wrote:
Sat May 11, 2019 9:22 am
... I was making a grave mistake...

I looked at his portfolio vs VTI over the past few years and I think his did better by a few thousand.
I believe you may be mistaken. Your "grave mistake" might be believing this myth. Did you actually make a real comparison? I checked a few of the funds and a couple outperformed, but not by much, and most others underperformed. Since we don't know your weighing or timing, it's hard to make a true comparison.

What was your portfolio size? If you simply had $50,000 invested in VTI 5 years ago, you'd be looking at about $20,000 in capital gains plus about another 5,000 in dividends. If you had an average of over $30,000 invested in this timeframe, you likely would have done as well if not better yourself.

User avatar
Misenplace
Moderator
Posts: 824
Joined: Mon Feb 01, 2016 9:46 pm

Re: Help my broker is trying to freak me out

Post by Misenplace » Tue May 21, 2019 8:40 pm

Almond wrote:
Wed May 15, 2019 5:51 pm
It is hard to believe paying 1% fee on $600k cost about $150k it seems so high and the fact it might be true is so shocking to me I can’t believe anyone would use a broker.
Yeah, it is hard to believe. But most folks get that deer in the headlights look when you try to explain it to them. One is really better off in a target date fund using index funds than using a broker. Once you do the arithmetic, you realize that there really is no alpha to these brokers/advisors/salespeople, and at best you will lose their management fee, and at worst you will lose many times that fee to loads, 12b-1 fees, and churn. Let me tell you, I see a lot of that doing taxes for the elderly for TaxAide.

The one advantage of brokers/so-called advisors is that they encourage you to save and invest. They do that because they can earn more fees from your savings/investments. However, some folks need someone pushing them to save, so I guess that is a good thing.

User avatar
bertilak
Posts: 6604
Joined: Tue Aug 02, 2011 5:23 pm
Location: East of the Pecos, West of the Mississippi

Re: Help my broker is trying to freak me out

Post by bertilak » Wed May 22, 2019 10:26 am

goodenyou wrote:
Sat May 11, 2019 10:20 am
I will bet that your performance after ALL fees and taxes will be inferior to VTI.
Early on, my father's investments were at Merrill Lynch. He was comfortable with ML after decades of investing with them, specifically his advisor, and that advisor's father before him!

BUT ... ML was expensive. They put my father into heavily loaded, high expense ratio, funds. ML reporting sidestepped fees and loads. For example, they reported great returns on a fund but when I looked carefully I saw that the current value of my father's holding in this great-performing fund was below what it cost three years in the past! It had a ways to go before it would break even! That did not take into account the 1.25% AUM fee!

MY POINT: Take what your broker tells you with a grain of salt!

P.S. eventually, after my father switched his allegiance from ML to me -- he stopped caring about ML statements :), I got him out of ML and over to Vanguard.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker, the Cowboy Poet

Topic Author
Almond
Posts: 38
Joined: Wed May 01, 2019 3:11 pm

My Broker is Freaking me out UPDATE

Post by Almond » Thu May 23, 2019 6:30 pm

[Thread updated, see below. --admin LadyGeek]

Hello everyone,

I posted the below thread and want to thank you all for the helpful information and the suggestion to have my partner read it. She did and it really helped. However she still has a few questions, so hoping you can help.

She has been told that brokers have to buy a % of funds they hold for you and are therefore aligned/invested in ensuring your portfolio performs. Is this true?

I suggested, that in addition to % brokers charge for accounts under management they also are incentivized to put you in funds. not saying they do this all time, but she thinks that contradicts what she has been told. Is this true? My understanding and again it is just from reading what I have learnt here and researching is that brokers do not have a fiduciary duty, in the strict sense, to their clients and so incentives to them is a grey area and something they can do.

If we decide to mange it ourselves well there is a possibility the market collapses just like in 08. The concern is that because it is self managed her desire to sell and go to cash will be greater. I have done a ton of research on this and feel comfortable that it is probably the biggest mistake you can make. My partner has not. So in order to help us with this, so she doesn’t panic when it does do you have any information and links on this? I know I can use portfolio visualizer, but is there anything else? I think I remember reading about ‘BOB’ who timed the market really bad and enter in 2001 but stayed, enter in 2008 but stayed etc. Any help on this would be great. I know we can adjust AA but more focused on information/examples that shows the bigger pictures

Here is the original thread

Thank you

viewtopic.php?t=280849

EDIT: Just wanted to add that we are not really managing our funds if we go the vanguard 3 portfolio method. We are leveraging and using the expertise of a giant in the industry. Any suggestions on how I can explain this point as I think it will help change everything. yes we are managing it in that we are going with this method but it is not some crazy plan I came up with by myself. Thank you

EDIT2: Just to be clear what my partner is trying to get clear on is why everyone pays a broker 1% plus as opposed to doing the three fund portfolio. In the original thread I linked she is now clear on what the true costs over time those services cost. She just has some additional questions and concerns.
Last edited by Almond on Thu May 23, 2019 6:42 pm, edited 1 time in total.

Jags4186
Posts: 3484
Joined: Wed Jun 18, 2014 7:12 pm

Re: My Broker is Freaking me out UPDATE

Post by Jags4186 » Thu May 23, 2019 6:39 pm

I don’t know what “but a % if funds they hold for you” means.

If you hire a fee based advisor they will talk to you and design the plan. That is why they are there for. You cannot—or at a minimum should not—be telling them what and how to invest.

If you decide going with an investment advisor is appropriate make sure they are a fiduciary charging either by the hour or as a percent under management. Do not go with a broker who makes commissions on funds they sell you.

ThriftyPhD
Posts: 823
Joined: Mon Jul 31, 2017 10:43 am

Re: My Broker is Freaking me out UPDATE

Post by ThriftyPhD » Thu May 23, 2019 6:41 pm

Almond wrote:
Thu May 23, 2019 6:30 pm
I think I remember reading about ‘BOB’ who timed the market really bad and enter in 2001 but stayed, enter in 2008 but stayed etc. Any help on this would be great.
https://awealthofcommonsense.com/2014/0 ... ket-timer/
Almond wrote:
Thu May 23, 2019 6:30 pm
If we decide to mange it ourselves well there is a possibility the market collapses just like in 08. The concern is that because it is self managed her desire to sell and go to cash will be greater. I have done a ton of research on this and feel comfortable that it is probably the biggest mistake you can make. My partner has not. So in order to help us with this, so she doesn’t panic when it does do you have any information and links on this?
It's a real concern, and if you're not both on board and understanding that there will be downturns you need to weather through, it could be very detrimental. I've seen suggestions to use Vanguard PAS or a similar lowerish cost service which will you in index funds, but may be more acceptable to your wife since an 'expert' is managing it. Another option might be a fixed fee hourly financial advisor. Then your wife doesn't have to trust you, but will instead be trusting the advisor.

protagonist
Posts: 5829
Joined: Sun Dec 26, 2010 12:47 pm

Re: My Broker is Freaking me out UPDATE

Post by protagonist » Thu May 23, 2019 6:45 pm

There are others here more knowledgeable than I am about these matters, but at first glance it seems like what she is being told is a lot of nonsense.

The SEC rules stipulate that a broker has no fiduciary duty to his/her clients.

Whereas the best course of action is generally self-management, you have to know yourself. If you feel like you are the type who would be prone to panic, it may be safer to pay a professional. But you have to choose VERY wisely as there are so many who would gladly take your money and offer you nothing (or less) in return. There are a few who frequent this forum who I believe are trustworthy. There are fiduciaries (as distinguished from brokers), who do have responsibility to their clients. If you go this route, research very, very carefully.

But please, run, don't walk, from an advisor who tells you that brokers have a duty to their clients.

BarbBrooklyn
Posts: 290
Joined: Fri Aug 24, 2018 9:33 am
Location: NYC

Re: My Broker is Freaking me out UPDATE

Post by BarbBrooklyn » Thu May 23, 2019 6:47 pm

Who is it who told her that the broker must buy/own the fund they are recommending?
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

Lee_WSP
Posts: 392
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: My Broker is Freaking me out UPDATE

Post by Lee_WSP » Thu May 23, 2019 6:49 pm

Almond wrote:
Thu May 23, 2019 6:30 pm
Hello everyone,

She has been told that brokers have to buy a % of funds they hold for you and are therefore aligned/invested in ensuring your portfolio performs. Is this true?
Absolutely untrue. Brokers are not fiduciaries, they do NOT HAVE YOUR BEST INTERESTS at heart. Unless I'm mistaking brokers for other financial instrument sellers. But I'm pretty sure I'm not mixing them up.
I suggested, that in addition to % brokers charge for accounts under management they also are incentivized to put you in funds. not saying they do this all time, but she thinks that contradicts what she has been told. Is this true? My understanding and again it is just from reading what I have learnt here and researching is that brokers do not have a fiduciary duty, in the strict sense, to their clients and so incentives to them is a grey area and something they can do.
They are absolutely incentivized to sell you stuff.

If we decide to mange it ourselves well there is a possibility the market collapses just like in 08. The concern is that because it is self managed her desire to sell and go to cash will be greater. I have done a ton of research on this and feel comfortable that it is probably the biggest mistake you can make. My partner has not. So in order to help us with this, so she doesn’t panic when it does do you have any information and links on this? I know I can use portfolio visualizer, but is there anything else? I think I remember reading about ‘BOB’ who timed the market really bad and enter in 2001 but stayed, enter in 2008 but stayed etc. Any help on this would be great. I know we can adjust AA but more focused on information/examples that shows the bigger pictures
That is a rational concern. However, you can take care of that by engaging with an actual fiduciary who is ethically required by their license to keep your best interests at heart. Someone like a lawyer is a fiduciary. That said, it's best if she/you took care of your own finances.

Cody6136
Posts: 248
Joined: Tue Apr 16, 2019 10:54 am

Re: My Broker is Freaking me out UPDATE

Post by Cody6136 » Thu May 23, 2019 6:56 pm

Almond wrote:
Thu May 23, 2019 6:30 pm
Hello everyone,

I posted the below thread and want to thank you all for the helpful information and the suggestion to have my partner read it. She did and it really helped. However she still has a few questions, so hoping you can help.

She has been told that brokers have to buy a % of funds they hold for you and are therefore aligned/invested in ensuring your portfolio performs. Is this true?

I suggested, that in addition to % brokers charge for accounts under management they also are incentivized to put you in funds. not saying they do this all time, but she thinks that contradicts what she has been told. Is this true? My understanding and again it is just from reading what I have learnt here and researching is that brokers do not have a fiduciary duty, in the strict sense, to their clients and so incentives to them is a grey area and something they can do.

If we decide to mange it ourselves well there is a possibility the market collapses just like in 08. The concern is that because it is self managed her desire to sell and go to cash will be greater. I have done a ton of research on this and feel comfortable that it is probably the biggest mistake you can make. My partner has not. So in order to help us with this, so she doesn’t panic when it does do you have any information and links on this? I know I can use portfolio visualizer, but is there anything else? I think I remember reading about ‘BOB’ who timed the market really bad and enter in 2001 but stayed, enter in 2008 but stayed etc. Any help on this would be great. I know we can adjust AA but more focused on information/examples that shows the bigger pictures

Here is the original thread

Thank you

viewtopic.php?t=280849

EDIT: Just wanted to add that we are not really managing our funds if we go the vanguard 3 portfolio method. We are leveraging and using the expertise of a giant in the industry. Any suggestions on how I can explain this point as I think it will help change everything. yes we are managing it in that we are going with this method but it is not some crazy plan I came up with by myself. Thank you

EDIT2: Just to be clear what my partner is trying to get clear on is why everyone pays a broker 1% plus as opposed to doing the three fund portfolio. In the original thread I linked she is now clear on what the true costs over time those services cost. She just has some additional questions and concerns.

You can do this.

Dottie57
Posts: 6373
Joined: Thu May 19, 2016 5:43 pm

Re: My Broker is Freaking me out UPDATE

Post by Dottie57 » Thu May 23, 2019 7:02 pm

There are a couple of truths everyone who has investments needs to know:

1. No one cares more about your money than you. No one.
2. If you like to pay your bills and spend money it behooves you to learn about investing your money so you have more of it.
3. Everyone needs to eat, have a home, family etc. This includes brokers, advisers and others in the financial advise area.
4. Financial advise people make most of their money from selling products to the public. The financial people need to make a living so expect that their needs may be different than yours. Beware. When buying anything, go ahead and trust but make sure you verify.

Good luck.

Topic Author
Almond
Posts: 38
Joined: Wed May 01, 2019 3:11 pm

Re: My Broker is Freaking me out UPDATE

Post by Almond » Thu May 23, 2019 7:22 pm

Cody6136 wrote:
Thu May 23, 2019 6:56 pm
Almond wrote:
Thu May 23, 2019 6:30 pm
Hello everyone,

I posted the below thread and want to thank you all for the helpful information and the suggestion to have my partner read it. She did and it really helped. However she still has a few questions, so hoping you can help.

She has been told that brokers have to buy a % of funds they hold for you and are therefore aligned/invested in ensuring your portfolio performs. Is this true?

I suggested, that in addition to % brokers charge for accounts under management they also are incentivized to put you in funds. not saying they do this all time, but she thinks that contradicts what she has been told. Is this true? My understanding and again it is just from reading what I have learnt here and researching is that brokers do not have a fiduciary duty, in the strict sense, to their clients and so incentives to them is a grey area and something they can do.

If we decide to mange it ourselves well there is a possibility the market collapses just like in 08. The concern is that because it is self managed her desire to sell and go to cash will be greater. I have done a ton of research on this and feel comfortable that it is probably the biggest mistake you can make. My partner has not. So in order to help us with this, so she doesn’t panic when it does do you have any information and links on this? I know I can use portfolio visualizer, but is there anything else? I think I remember reading about ‘BOB’ who timed the market really bad and enter in 2001 but stayed, enter in 2008 but stayed etc. Any help on this would be great. I know we can adjust AA but more focused on information/examples that shows the bigger pictures

Here is the original thread

Thank you

viewtopic.php?t=280849

EDIT: Just wanted to add that we are not really managing our funds if we go the vanguard 3 portfolio method. We are leveraging and using the expertise of a giant in the industry. Any suggestions on how I can explain this point as I think it will help change everything. yes we are managing it in that we are going with this method but it is not some crazy plan I came up with by myself. Thank you

EDIT2: Just to be clear what my partner is trying to get clear on is why everyone pays a broker 1% plus as opposed to doing the three fund portfolio. In the original thread I linked she is now clear on what the true costs over time those services cost. She just has some additional questions and concerns.

You can do this.

Thank you totally agree with this. Wondering how I can explain it is not ‘us’ managing this but going with a titan in the industry, the namesake of this forum, advise. Can you help explain it is not me but Mr Jack Bogle

esteen
Posts: 43
Joined: Thu May 23, 2019 12:31 am

Re: My Broker is Freaking me out UPDATE

Post by esteen » Thu May 23, 2019 7:41 pm

I'd like to emphasize what others have already told you and your partner. Though I am a new poster to Bogleheads (generally don't have time for discussion boards) I am not new to investing. Many years ago when I was, I had similar questions and misinformation as your partner does. That's why I feel it's important you both get this advice several times over.
Almond wrote:
Thu May 23, 2019 6:30 pm
She has been told that brokers have to buy a % of funds they hold for you and are therefore aligned/invested in ensuring your portfolio performs. Is this true?
This is absolutely untrue. Brokers have no obligation to purchase any funds you hold.
Almond wrote:
Thu May 23, 2019 6:30 pm
I suggested, that in addition to % brokers charge for accounts under management they also are incentivized to put you in funds. not saying they do this all time, but she thinks that contradicts what she has been told. Is this true?
You are correct. It's not that every broker is evil, or every hourly fee-only advisor is good. But brokers operate in a world of misaligned incentives, and there are far too many instances of them pushing funds that may not be in the best interest of the client. If you and your partner want to hear all the details I'd highly recommend Rick Ferri's Bogleheads on Investing podcast, Episode 8
Almond wrote:
Thu May 23, 2019 6:30 pm
My understanding and again it is just from reading what I have learnt here and researching is that brokers do not have a fiduciary duty, in the strict sense, to their clients and so incentives to them is a grey area and something they can do.
Correct, being a broker by itself does not demand a fiduciary duty. There are some hybrid advisers out there that can act as brokers and ALSO have a fiduciary duty, but they are not common.
Almond wrote:
Thu May 23, 2019 6:30 pm
If we decide to mange it ourselves well there is a possibility the market collapses just like in 08. The concern is that because it is self managed her desire to sell and go to cash will be greater.
This is a valid concern. Like others have suggested, with your current situation it might be best to get a reasonable cost fee-only adviser. If you want to use them on an ongoing basis you can use one with Assets Under Management fee structure such as Vanguard PAS or similar (doesn't have to be Vanguard, but should have low fees!). If you are intent on managing the funds yourself but need periodic advice (during a life event or a market crash), then establish an hourly-based fee-only advisor. They may be a bit more money up front, because they need to spend time to get to know you, but arguably have the most aligned incentives to the client. Plus, an experienced adviser may have some additional ideas for your financial picture that you haven't taught yourself!

If you were you solo you may be comfortable without an adviser, but you're not: you have a partner whose feelings and needs are just as important as yours, regardless of her level of knowledge and comfort with the subject matter. Without knowing more, I predict it may be helpful for your relationship to have an unbiased 3rd party giving sound, reasonable investment advice especially during turbulent times. This will help you both stay on track and also help the relationship.
Almond wrote:
Thu May 23, 2019 6:30 pm
EDIT: Just wanted to add that we are not really managing our funds if we go the vanguard 3 portfolio method. We are leveraging and using the expertise of a giant in the industry. Any suggestions on how I can explain this point as I think it will help change everything. yes we are managing it in that we are going with this method but it is not some crazy plan I came up with by myself. Thank you
Agree, and there are lots of ways to explain this, but perhaps the most convincing would be to have a 3rd party hourly fee-only advisor (as I suggest above) say this to her face-to-face.
Almond wrote:
Thu May 23, 2019 6:30 pm
EDIT2: Just to be clear what my partner is trying to get clear on is why everyone pays a broker 1% plus as opposed to doing the three fund portfolio. In the original thread I linked she is now clear on what the true costs over time those services cost. She just has some additional questions and concerns.
Not "everyone" is paying a broker 1+% to manage their money. As you see here at Bogleheads, there is a thriving community of folks who do not, and of course many more across the country who do not necessarily participate in forums but manage their money in an intelligent cost-conscious fashion. Yet expensive brokers are still more popular than makes sense. I think it's for a few reasons: 1) several decades ago it was much harder to self-invest. The rise of the internet, index funds, and other technology/advancements have moved investing in markets from something only an "industry" person could have time and expertise for, into something anyone can do with just a few clicks. 2) A large industry with big incentives for clients to stick (i.e. stay with the broker) will invariably move much more slowly than technology provides. This is largely due to 3) Asymmetric information. If you do not know about investing, people who do can steer you into whatever they want and you would have no way of knowing it was not best for you.

This is why arming yourself with knowledge from unbiased sources (i.e. people who do NOT have monetary incentives), as you have done here, will keep you heading down the right path. It is really hard to say "you're fired" to someone's face, especially if they have played the role of helper/mentor for a while in your financial life. I applaud you for taking action.

-ES

bradinsky
Posts: 90
Joined: Sat Jul 21, 2018 6:32 am

Re: My Broker is Freaking me out UPDATE

Post by bradinsky » Thu May 23, 2019 8:23 pm

Some brokers are honest & decent. Many are just like used car salesmen. They will tell you whatever they need to, to get the sale. Buyer beware!

User avatar
LadyGeek
Site Admin
Posts: 55004
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Help my broker is trying to freak me out

Post by LadyGeek » Thu May 23, 2019 8:28 pm

Almond - In order to give appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original. Also, I posted an update note in the first post.

In addition to seeing the entire discussion, members who've posted in the original thread will see the update appear under Your posts and be able to contribute again.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

clip651
Posts: 343
Joined: Thu Oct 02, 2014 11:02 am

Re: Help my broker is trying to freak me out

Post by clip651 » Thu May 23, 2019 10:37 pm

ruralavalon wrote:
Fri May 17, 2019 10:32 am
Almond wrote:
Wed May 15, 2019 7:20 pm
Wow seeing it like that is just shocking. Do most people just have no idea how much the pair broker is costing them? My partner wants to know when I got my series seven license, and is still skeptical about doing it ourselves. I don’t think managed funds have outdone the three portfolio mix.
Suggest that your partner read this very short free pdf book: William Bernstein, "If you Can".
Have you and your partner read If You Can? See link above. It may help you to read and discuss it together.

sschoe2
Posts: 383
Joined: Fri Feb 24, 2017 4:42 pm

Re: Help my broker is trying to freak me out

Post by sschoe2 » Fri May 24, 2019 9:40 am

Almond wrote:
Sat May 11, 2019 9:22 am
VTI. Well I called my broker and he started saying I was making a grave mistake that I would be getting in at the top of the market, that I wouldn’t be fully diversified
It was there my BS meter went off the scale. Total US stock market represents the entire US stock market many of which have pretty decent international exposure. In fact John Bogle was a big believer in you don't need international stocks as many large US corps get 40% of the revenue internationally. With a 3 fund portfolio you have the entire US stock market represented, the entire international stock market represented, and the bond market fully represented. That is near the pinnacle of diversification. All that is really missing is Reits which there are some in the stock market and precious metals if you feel you need them which most here don't.

User avatar
jakehefty17
Posts: 119
Joined: Fri May 11, 2018 6:48 pm
Location: New York

Re: My Broker is Freaking me out UPDATE

Post by jakehefty17 » Fri May 24, 2019 11:01 am

Almond wrote:
Thu May 23, 2019 6:30 pm
She has been told that brokers have to buy a % of funds they hold for you and are therefore aligned/invested in ensuring your portfolio performs. Is this true?

I suggested, that in addition to % brokers charge for accounts under management they also are incentivized to put you in funds. not saying they do this all time, but she thinks that contradicts what she has been told. Is this true?
Yes, brokers can receive a commission for getting you into specific funds. Most of which are high-cost and/or loaded funds.

My understanding and again it is just from reading what I have learnt here and researching is that brokers do not have a fiduciary duty, in the strict sense, to their clients and so incentives to them is a grey area and something they can do.
Nothing grey about it. They can and do.

If we decide to mange it ourselves well there is a possibility the market collapses just like in 08. The concern is that because it is self managed her desire to sell and go to cash will be greater. I have done a ton of research on this and feel comfortable that it is probably the biggest mistake you can make. My partner has not. So in order to help us with this, so she doesn’t panic when it does do you have any information and links on this?
This would have been a concern whether or not your assets are under management. You very well could have told your broker to cash out.

I know I can use portfolio visualizer, but is there anything else? I think I remember reading about ‘BOB’ who timed the market really bad and enter in 2001 but stayed, enter in 2008 but stayed etc. Any help on this would be great.
Here it is - viewtopic.php?t=166730
Time in market is more important than timing the market.


EDIT: Just wanted to add that we are not really managing our funds if we go the vanguard 3 portfolio method. We are leveraging and using the expertise of a giant in the industry. Any suggestions on how I can explain this point as I think it will help change everything. yes we are managing it in that we are going with this method but it is not some crazy plan I came up with by myself.
Have her google the 3 fund portfolio. It's one of the most widely accepted investing theories out there. There is no lack of information on the topic, and Bogle himself was one of the most famous investors of all time.

EDIT2: Just to be clear what my partner is trying to get clear on is why everyone pays a broker 1% plus as opposed to doing the three fund portfolio. In the original thread I linked she is now clear on what the true costs over time those services cost. She just has some additional questions and concerns.
I've never paid a broker in my life. When I first received 401k benefits, I researched investing and found myself here. To be successful at ANYTHING, you need to put in the effort to learn. It's good that she doesn't want to blindly listen to advice from people on a random forum. She's clearly a critical thinker. Have her do some of her own research, this isn't limited to the boglehead community alone. We're just the biggest advocators and an incredible knowledge bank in the forum to ask any question imaginable.
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

Topic Author
Almond
Posts: 38
Joined: Wed May 01, 2019 3:11 pm

Re: Help my broker is trying to freak me out

Post by Almond » Fri May 24, 2019 11:10 am

LadyGeek wrote:
Thu May 23, 2019 8:28 pm
Almond - In order to give appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original. Also, I posted an update note in the first post.

In addition to seeing the entire discussion, members who've posted in the original thread will see the update appear under Your posts and be able to contribute again.

thank you

User avatar
ruralavalon
Posts: 15996
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: My Broker is Freaking me out UPDATE

Post by ruralavalon » Fri May 24, 2019 2:38 pm

:?:
.
Almond wrote:
Thu May 23, 2019 6:30 pm
[Thread updated, see below. --admin LadyGeek]

Hello everyone,

I posted the below thread and want to thank you all for the helpful information and the suggestion to have my partner read it. She did and it really helped. However she still has a few questions, so hoping you can help.

She has been told that brokers have to buy a % of funds they hold for you and are therefore aligned/invested in ensuring your portfolio performs. Is this true?
No.


Almond wrote:
Thu May 23, 2019 6:30 pm
I suggested, that in addition to % brokers charge for accounts under management they also are incentivized to put you in funds. not saying they do this all time, but she thinks that contradicts what she has been told. Is this true? My understanding and again it is just from reading what I have learnt here and researching is that brokers do not have a fiduciary duty, in the strict sense, to their clients and so incentives to them is a grey area and something they can do.
Not a grey area at all.

Brokers are not fiduciaries, so are not required to place the investors best interets ahead of their own, are only required to sell "suitable" investments not the best or least expensive.

The incentive is to sell funds with sales loads (a % of investment paid front or when you sell) and 12b1 fees (incorporated into high expense ratios). That is another source of their compensation.



Almond wrote:
Thu May 23, 2019 6:30 pm
If we decide to mange it ourselves well there is a possibility the market collapses just like in 08. The concern is that because it is self managed her desire to sell and go to cash will be greater. I have done a ton of research on this and feel comfortable that it is probably the biggest mistake you can make. My partner has not. So in order to help us with this, so she doesn’t panic when it does do you have any information and links on this? I know I can use portfolio visualizer, but is there anything else? I think I remember reading about ‘BOB’ who timed the market really bad and enter in 2001 but stayed, enter in 2008 but stayed etc. Any help on this would be great. I know we can adjust AA but more focused on information/examples that shows the bigger pictures

Here is the original thread

Thank you

viewtopic.php?t=280849
Here is Bob's story: "What if you only invested at market peaks?"

You can control risk with a fixed income allocation. Graph, "An Efficient Frontier: the power of diversification". Please see:
1) Wiki article Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk"; and
2) Wiki article, "Asset allocation".

A good way to avoid panic selling is to use a single very diversified, low expense balanced fund like a Vanguard Target Retirement fund or Vanguard LifeStrategy fund.

Those types of funds are as diversified as a three-fund type portfolio, and almost as low in expense ratio. "It’s like salad dressing. You can buy premixed dressing in a bottle, mix from two bottles from a store, or make the dressing yourself to your own taste and save a little bit of money too. They all work." TFB blog post, Target Retirement Funds vs LifeStrategy Funds vs DIY Mix""

Investors using Target Retirement funds have proven resistant to trading during market swings. According to Vanguard pdf, "How America Saves 2018" (p. 9) less than 2% of plan participants holding a single target date fund traded at all in 2017.


Almond wrote:
Thu May 23, 2019 6:30 pm
EDIT: Just wanted to add that we are not really managing our funds if we go the vanguard 3 portfolio method. We are leveraging and using the expertise of a giant in the industry. Any suggestions on how I can explain this point as I think it will help change everything. yes we are managing it in that we are going with this method but it is not some crazy plan I came up with by myself. Thank you
The broker certainly has less expertise than Bogle, Buffett and many others who have suggested the simple index approach and the three-fund portfolio idea.

Taylor Larimore post, "Articles recommending the three-fund portfolio". You can just borrow (for free) the expertise of all of these commentators.

Almond wrote:
Thu May 23, 2019 6:30 pm
EDIT2: Just to be clear what my partner is trying to get clear on is why everyone pays a broker 1% plus as opposed to doing the three fund portfolio. In the original thread I linked she is now clear on what the true costs over time those services cost. She just has some additional questions and concerns.
There is no good reason to pay 1% of your portfolio annually to a broker. It is just the triumph of salesmanship by the financial services industry, convincing novices that investing is hard and complex.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Busdrvr
Posts: 30
Joined: Fri Jan 29, 2016 11:56 am

Re: Help my broker is trying to freak me out

Post by Busdrvr » Sat May 25, 2019 5:07 pm

You could have someone like Mark Zoril at https://planvisionmn.com/ take a look at your entire situation for a $96 annual fee and he doesn’t have anything to sell you other than his expertise/advice. This may alleviate some of the reticence of going it alone. You can learn all you need about Mark by listening to Rob Berger at his doughroller.net podcast. Rob interviews him in #268 and here you can determine if his offer has merit for your situation. He speaks at length about his previous time at a broker and about conflicts of interest and what a true fiduciary is/does.

Disclosure:Yesterday we had our first teleconference with Mark after a 2 week period of uploading our accounts/situation for his software(emoney). It was a great experience for us and we are looking forward to hearing back from him regarding some of the action items. He is definitely one who likes simplicity in a portfolio which you will also hear if you listen to the podcast I referenced.

User avatar
grabiner
Advisory Board
Posts: 24594
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: My Broker is Freaking me out UPDATE

Post by grabiner » Sun May 26, 2019 8:30 pm

Almond wrote:
Thu May 23, 2019 6:30 pm
She has been told that brokers have to buy a % of funds they hold for you and are therefore aligned/invested in ensuring your portfolio performs. Is this true?
This may be a policy of the broker's firm, but there is no such general regulation. Even advisors with a fiduciary responsibility do not need to invest in the same funds (although they should have a good reason for not doing so, such as an advisor who lives in NY, or who holds all his bonds in a 401(k), recommending that a NJ resident buy a NJ muni fund).
Wiki David Grabiner

cherijoh
Posts: 5798
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: Help my broker is trying to freak me out

Post by cherijoh » Sun May 26, 2019 9:17 pm

ImUrHuckleberry wrote:
Fri May 17, 2019 5:07 pm
Do most people actually pay somebody to manage their finances? Nearly everyone I know rolls their own. It would surprise me if most people pay somebody.
I think it may be somewhat age related. Amongst my friends, many picked up a financial advisor as they started thinking about retirement. I have tried to convince them they could do it themselves, but so far it has fallen on deaf ears.

Once you hit ~50, you get put on the mailing lists for free dinner seminars that offer a "free" consultation with the FA hosting the seminar. A lot of people also inherit an advisor from their parents or grandparents.

criticalmass
Posts: 1073
Joined: Wed Feb 12, 2014 10:58 pm

Re: Help my broker is trying to freak me out

Post by criticalmass » Sun May 26, 2019 10:53 pm

Almond wrote:
Sat May 11, 2019 9:22 am

My plan was to put US stocks in VTI.
Suggestion: Describing what "VTI" is can be very helpful/ time saving to readers who haven't memorized all of the ticker symbols. (Other symbols were spelled out, thank you.) VTI turns out to be the Exchange Traded Fund version of VTSAX - "Vanguard Total Stock Market Index Fund."

Post Reply