My first Advisory relationship was the old fashioned Stock Broker with a Full-Service broker. A friend of mine went into the business and I took my FDIC Insured Certificate of Deposit IRA over to him, this was back in late 1988 or early 1989, so I have been at this for a long time. He lasted a year, then it was on to Broker #2 who was pretty good, Broker #3 wanted all my business and I refused and he fired me, I went to Broker #4 who later went out on his own and I have followed him to two other firms. I have worked with Broker #4 for probably 27 or so years now, the relationship has been positive but I make all the decisions with his input. Probably half of the ideas are mine and half are his.Hi all, I'm working with a Financial advisor to develop a long term plan for retirement. I'm 58 and plan to retire next year. That work they've done has been helpful, showing cash flow per year and some tax efficient strategies.
The advisor also wants to manage my portfolio,...at a 0.9% fee, claiming he can "beat" the market. Another advisor I spoke with charges a flat fee, but it's based on 0.75% of the portfolio then adjusted annually for inflation.
I do have serious doubts about them beating the market, but with the S&P500 so high, is there an advantage to having a manager manage funds to soften the blow if the market corrects?
Have any of you had good experiences with an advisor?
In 2019, I did my first Assets Under Management arrangement with the Private Client Group at American Century Investments. I had accounts with them since 1984, I still own the very first mutual fund that I purchased from them and a bit later I started an IRA with them. A non-profit employer allowed to have my 403(b) with them and I later rolled the 403(b) over into the IRA, these later were the monies that I rolled over to the Private Client Group. It started out as simple retirement projections, a conservation portfolio allocation, and Monte Carlo simulations. Later on, they gave their clients access to the MoneyGuidePro software and have had the Advisor train my on the software during our sessions. Doing that, I have put together a fairly detailed retirement plan. As time goes on, the capabilities of this Private Client program continue to grow. The all-in costs of this program are 0.90% a year, this includes Advisory costs and the expense ratios of the mutual funds and ETFs. My experience here has been positive.
The drawback with American Century is that the advice and the plan are basic, which is what most people desperately need. They put on pretty good webinars that cover a variety of topics, I thought their Social Security seminars were particularly good. I put in work myself to put together a detailed plan in a Word document, much of it screenshots from MoneyGuidePro. Their planning probably isn't as comprehensive as a local Advisor but good enough for most people. I am on my third Advisor with them, the current one is very competent and I believe he is working on his Certified Financial Planner certification, he has a lesser certification in retirement planning, I have enjoyed working with him. I figured out that the expense ratios of the funds and ETFs are about 0.60% and thus the Advisory costs are 0.30%. Not bad, meets my needs.
I am one who likes to talk to my money, I have a virtual meeting with the Advisor at American Century quarterly and talk to Broker #4 a few times a year. So I am a Hybrid Do-It-Myself/Seeking Help type of investor and it has worked out for me. I estimate that my total costs of my retirement portfolio are about 40 basis points or 0.40% a year. I don't recommend the stock broker route for Bogleheads, but that is how I got started with Advisory relationships.
I also have taken advantage of free portfolio analysis from Broker #4, American Century, Fidelity, and my insurance company. The analysis done by the insurance company was amazingly good. I also employed Ameriprise for Financial Planning for 8-9 years though I never invested with them. So sort of a mish-mash plus what I learned here at Bogleheads.
Statistics: Posted by nedsaid — Thu Oct 03, 2024 9:03 pm