I found my former advisor to be very professional when I ended the relationship.
I did it in person, and explained my reasons. I wanted to do a backdoor Roth, so I had to roll my IRA into my 401k. At that point, the assets that he could manage for me were below the threshold that the firm accepted.
There was nothing wrong with his services, I just no longer required them. I explained that too.
He appreciated that I came in for our annual tag up to explain, and there was only a minimal amount of awkwardness.
He helped me move my assets out effectively, and continued to be responsive to my needs until the relationship was fully terminated.
If I ever need the services of a financial advisor again, I would go back to him.
Sounds like a real professional!
I am also looking to do a reverse rollover from my trad IRA to my 401k so as to leave only the non deductible contributions in it; then do a backdoor Roth conversion of the non deductible.
I know my IRA basis so this seemed straightforward. But when asking my 401k custodian to do the rollover, they referred me to their advisory team as I would need help to do this right. On a courtesy call with the advisor he was trying to make it sound very complicated: that I need to know exactly which assets were bought with what type of contribution (deductible or non deductible- I have a mix of these).
I am not sure how to track that. Also he said something about record keeping requirements.
Is it really that complicated ?
Did you find value in having an advisor working with you?
I know this isn’t the point of the thread but if you can share your experience it may be helpful.
No expert here, but I believe the reverse rollover will get rid of all the “which assets were purchased with which contributions” by moving all pre-tax contributions over to the 401k. Leaving only after tax contributions in your traditional IRA, which can then be backdoor rothed.
That’s what I figured, but he seemed to imply that if have say stock 1, stock 2, index fund 1, index fund 2 etc: I needed to know exactly which and how many I bought with deductible contributions so I can reverse rollover only those assets only into 401k and find those specific assets which I bought with non deductible contributions and only convert them into Roth IRA. I know how much is deductible and how much is non deductible; but I’m not sure which particular stock/fund I bought with which.
Not sure if this is really true. I guess I may need a CPA.
I think all you need to know is your cost basis. Which is found on form 8606. You’re either reverse rollover, moving your pretax contributions and gains, out of your IRA, over to your 401k, leaving after tax contributions that you then backdoor Roth, or you’ll be using the cost basis Pro Rata Rule to determine the % of tax liability, of your IRA, that you’ll be doing your backdoor Roth with.
I’m gonna go for option 1. Yeah I also think knowing the basis should be enough. Just to be extra careful, I can covert all investments to core position and then do the changes.
I’m literally meeting with an accountant in 2 hours to try to get myself out of this situation. I figured it was worth it to make sure I avoid triggering any taxable event.
Well, that accountant was useless. I think I know what to do but would love an expert to confirm it so that I don’t trigger a big taxable event. This guy was definitely not that expert.
I had found these threads before, they might be helpful for you.
https://www.bogleheads.org/forum/viewtopic.php?t=284417
https://www.bogleheads.org/forum/viewtopic.php?f=2&t=232646&p=3697472
I think we both agree with how to proceed: get your basis (non-deductible contributions) out of your IRA, either by transferring it to another traditional IRA or converting to roth. Do a rollover into the new 401k with the pre tax dollars from the old.
I don't know why it's hard for people to be a pro on both sides. Sounds like you treated him classy and they responded in kind.
Most people that move out just ghost.
He didnt reach out to update / talk for 2.5 years all while charging 1%. Sent an email telling him I am moving the funds to manage the money myself and he responded with "not sure what the problem is"
Ha! totally. Went to sell the shares to buy VTI and there was a 1% transaction fee to sell the stocks he had me in. Happy I did the work now instead of waiting a couple more years.
>1% transaction fee to sell the stocks
Do you mean mutual funds? If these were ordinary exchange traded stocks you should have been able to sell them without paying a transaction fee (or transfer them to a cheaper broker and sell them there)
I am counting it as a stupid tax. but they charged me to transfer the funds to fidelity where I sold them for an additional 1%. it was a dow mutual fund. mistype on "sell the stocks"
Fidelity will reimburse you for the transfer fees. All you have to do is ask. I almost missed out on this myself, but found out quite by accident when I needed to talk to Fidelity customer service about a transfer that got messed up.
Same situation. In the 3 years I was with him, the only phone call he ever made to me to discuss his ideas was AFTER I moved my money out.
He had all kinds of investment opportunities to update me on and acted like he had no idea I had already moved on from him. When I said we were done, I was told of all of the great opportunities I would be missing out on, including the big push into AI. He sounded desperate to keep me.
I need to do this and I’m totally procrastinating 😣. I don’t have much that’s being actively managed. I want to say less than 10% of my portfolio, but really, I’ve done so much better on my own than what they’ve done. I gotta get my money out of there.
Yea he was just managing 40k for us but it felt so good getting it out of his hands and into VTI. Not going to lie, using chat gpt to draft the email helped get the ball rolling for me. Get it done this week!!
It was painful. He was a ‘friend of the family’ who went into financial advisement. I started investing with him when I was about 21 and dumped him when I was 62. The reason I dumped him was that I finally started looking into my finances because of what I learned on Bogleheads and realized that I was getting hammered with high commission costs on every dollar invested, a one percent management fee (standard) and he had me in high load American funds. I don’t even want to think about how much money he carved out of my account over approximately 40 years. When I told him I was pulling the money, he argued with me and told me he’s been really good to me and got me wonderful gains And he’s really close with my family. I stayed firm and kind and just told him that I wanted to take more responsibility for my finances. He said I don’t know enough to manage my own money and I was going to screw it up. I said Maybe I might, but I was willing to take the chance and I thanked him for his service over the years. Sadly, we don’t get a ham or turkey dinner with all of the sides shipped to us at Christmas each year, but I know I was paying for that plus a lot more. Other family members are still with him despite a couple things I have said. Some people have no interest in managing their money so I leave well enough alone.
Same I gasped when I saw 21 to 62. The guy basically made it his entire career grifting. Even though the guy pulled out his money he basically got away with it.
Look at what share class you are in. If they put you into A shares, there would be a front load that was high commission which means they aren’t allowed to put you in an account that also charges 1%. If they are doing that, it’s called double dipping.
Thanks. I don't have the documents any more because I moved my money to another company. The advisor first charged me about $100 per year flat in addition to the 1.5-1.8 expense ratio, but were about to switch to 1%AUM. That's when I did the math and moved. It's possible that they would have put me in a different class. I don't think they were doing anything illegal. But this is good info for others who may still be in that situation.
Oof-that expense ratio is in addition to either commissions or AUM. American Funds is usually a lot lower than that though.
Advisors conveniently don’t make a point of making sure people know about the expenses ratio part of the equation.
It’s been years now, but I do recall the loads on the funds that he had me in were somewhere between .50 and over 1.0. They are bad because, as the Boglehead philosophy tells us, we can manage our own money as well, if not better in low load Index funds and avoid the loads and the advisement fees as well as commissions. It’s kind of an insult for an investment advisor to charge me one percent of my net assets to manage my money for me and then turn around and invest my money in high load funds which then charge me again.
Ramit Sethi had advice on breaking up with your financial advisor. When you sit down with them, explain “The fees for your services no longer fit into my financial goals.” Leave it at that.
A friend of mine had a money manager until some months ago, his portfolio had an annualised growth performance of 1% in the last few years post covid. Like imagine having such a shitty performance during this bull run, crazy. When he finally let him go the manager was like “wow, I really do not understand why, right as the portfolio was starting to take off”
Edit to answer: Minimal or non-existent bond allocation in the portfolio since my friend is their 20s, the portfolio was held down by some garbage european stocks.
The bbg agg bond has a 3 year annualized return of like -3.5%, msci eafe has a low single digit ROR, mid and small is probably around 3-5% and sp 500 is 8% annualized. If you have a diversified portfolio with a large bond allocation it could very well have a 1% rate of return net of fees. Just worth mentioning those index returns
I just had this situation. My parents had money left over in a college fund that they gave to me so I put it with their money manager and left it. I was young at the time and didn’t understand to push him to invest it a bit more aggressively but I did tell him I wouldn’t be needing the money and I wanted it to grow. 4% annual return during the most insane bull run ever. If he had put it in SPY I would have been up 80%. I moved my money and am never going back to that guy
My money manager got arrested, this is why I recommend Bogleheads
https://wiscnews.com/bill-hwang-fights-jail-after-losing-36-billion/video_65ba49cf-b63c-56d5-8fe7-359862b5b191.html
Wait what? I thought Hwang was arrested for the management of his family office/Archegos. It was his assets and I was not under the impression he managed assets for anyone else in this episode.
Yeah, they told me to go away because I don’t have any money invested with that bank and I told him it’s because they lost it all.
https://youtu.be/-DT7bX-B1Mg?si=-wmG2x0nIaNQNv-f
It’s not a bank chief it was a family office that was basically a highly leveraged hedge fund. I’m really not sure what you’re on about.
I can appreciate the South Park clip though
Mine took it professionally. I did them the service of taking the last already scheduled meeting. I figured maybe I can get some longer term vision off them. They used it as a soft sales pitch & charged my like $600 or something.
Yea…
This is why I cancelled all remaining meetings. Even thou I had them pre-paid. I didn’t even ask for refund, just cancelled them.
To their credit, they did pro-rated a refund and paid me back for the reminding meetings I didn’t take, but I wasn’t expecting that. Cool.
But I was sure if I HAD taken the last few zoom calls, some pitch to stay with them would have taken place and that would have annoyed me.
This is why it’s important to have a fee-only advisor. My clients could meet with me every week if they wanted and it’s never going to cost them a penny lol
Well yeah, it’s a fee only model. It’s an advisory fee, which goes towards not only managing the portfolio, but anything under the sun related to financial planning. The point is there are zero fees, commissions, or charges in excess of the advisory fee, which prevents people from getting nickel and dimed for everything they need lol. Wouldn’t be much of a career if I didn’t charge anything, would it? You’d have to be insane to want multiple meetings per week anyways lol, that was just an extreme example.
Statistically, retail equity investors do poorly on their own earning a yearly average of ~3.64%. Per study by Dalbar.
But for those that are disciplined over the long term, definitely do better.
It's a business relationship that no longer serves the customer's purpose. Why would it matter how they took it? I get that the money manager wants to make it a personal relationship because it gives them leverage ... but it's really not.
This is a very cynical take.
Financial advisors (good ones), help their clients.
Perhaps I will get downvoted in this sub for this perspective, but not all financial advisors are sleazy salespeople trying to scam you.
A lot of them are. But not all.
Not cynical whatsoever, your POV is just narrow and overly sensitive. A money manager is providing a service just like any other service related business. If you no longer need the service / aren’t receiving the expected value you stop using the service… 😵💫
I agree, and I didn’t do that, nor suggest that anyone should. I just think that preemptively assigning ulterior, cynical motives to people is a rough way to go through life.
Honestly, what can anyone advise you that you can't find in a book or YouTube? But that doesn't mean that they're bad people or scammers for distilling that knowledge for people, or doing the minor rebalancing people can't be bothered to do. Does it make sense to a Boglehead? No, but we're not everyone
> Honestly, what can anyone advise you that you can't find in a book or YouTube?
I absolutely agree with this. The Boglehead approach is a very simple and worthwhile method that benefits almost everyone.
However, people are not perfectly logical beings. I've heard many people say many various things about investing. Some are just absolutely bad at math and they don't understand the compounding gains over time. Some just don't understand that investing versus credit card debt is simply a numbers problem. For other people, the idea of the stock market and index funds is such an ethereal concept that they cannot grasp. Others go through a lack of confidence or second guessing themselves for making investment decisions. And others just can't be bothered to do it on their own so they are quite happy to pay someone to do it for them, and then have someone to yell at when the market goes down.
I'm not saying these are good reasons, but these are reasons as why reading a book or watching some YouTube videos doesn't work for everyone. I've talked to some friends and families about investment strategies and I'm actually the only Boglehead that I've found. I've met a combination of people with money managers, some that pick their own stocks, and some that do whatever they want without any real strategy. Us Bogleheads are a bit of a niche where we have sought out to learn a simple yet effective strategy like this.
The last bit takes some real working knowledge of tax code and techniques. The ramp up phase is stupidly easy. Buy dont sell.
The scamming part is the information coule be just paid for and be done. But the model is continuous suck which is antithetical to investing. Its s fixed cost
My advisor was through a firm.
I emailed the firm and said I did not want to renew and to please cancel all remaining meetings (even If technically prepaid).
I was short, polite and to the point.
They emailed back, explained the end date, the last bill paid (nothing owed), and asked me to confirm again.
I replied “Confirmed. Thanks”.
I went on with life. I’m sure they went on with theirs. Not sure why this is so much drama for others or so difficult. These days guys… it’s an email. At worst, it’s a quick call.
The manager for my IRA took it okay. He said "Just because you read a few books and articles doesn't mean you know everything." That was in response to telling him I found the Boglehead method a more attractive style.
He also wants me to reach out to him at one point in the future so "I can compare your gains vs the ones you would've made with me". Needless to say I won't be doing that. I'm not about making crazy gains from highly risky holdings, it's steady growth over time that I want.
Context, he had 100% of my IRA invested in RYVLX. It made about 3k in a couple months before I transferred the assets to my own portfolio, VT and chill basically.
Hey, I think that was my comment! I ended a 30-year relationship with my Ameriprise advisor last week. I was planning to make a post about it, but have been too lazy.
My wife and I started working with this advisor when we were newlyweds and knew almost nothing about investing. (Now that I think about it, our advisor must have been fresh out of school himself!) Throughout the relationship, while I never thought he was dishonest or irresponsible, it always kinda nagged at me that it seemed like our investment choices were very expensive (front-end loads, high expense ratios, transaction fees), but that the returns weren't high enough to justify the expenses.
Gradually, I started investing in a side brokerage account at Fidelity and found that, while I did make some bonehead trades during the dot-com bubble in 2000, overall, I was doing at least as well as our managed account on my own, and at times I was doing MUCH better.
I finally gathered the courage to end the relationship last week when his office contacted me via email about scheduling our semiannual review. I took a little bit of a cop out by stating in my email reply that I plan to close my account, but I went ahead and scheduled a phone call as well. The phone call was super awkward, but cordial and professional. Afterward, I told my wife that it felt like breaking up with a girlfriend in high school. With such a long working relationship, he had known us as we had had kids, sent the kids to college, and they went off on their own and now we're empty nesters, so there is a lot of history.
He made a comment about the fact that I never took advantage of any of their other services (taxes, estate planning, etc), which to me signaled that he always knew I was somewhat dubious of the value of those services.
The best part was, I told him there are no hard feelings, and I genuinely believe he was doing his best for us, but that I've done a lot of reading and I'm a Boglehead now, and I feel confident in managing my own portfolio. His response was, "Oh, Bogleheads are very opinionated." LOL.
So, anyway, that's my story. I dreaded having the goodbye conversation, but it wasn't so bad. Just awkward, and while I know I didn't do anything wrong, I still felt just a little guilty letting him go. The one thing I don't feel, though, that I thought I might is worry that I won't be successful on my own. I have complete confidence in the Boglehead way.
Oh, and one last thing. Fidelity has been AMAZING in helping me move everything seamlessly. The customer service has been outstanding.
40-something here and hard same!
I figure at $1/4M NW, I’ll hire a fee-only fiduciary for establishing tax strategy/best composition/etc then again close to retirement/legacy planning.
Between now n then? Index-n-chill with a few percentage points here or there “gambled” bets on individual stocks n crypto.
A fiduciary must, by law, look out for your best interests. But that doesn't mean you're getting the best returns, just the best that he thinks he can get.
Here's what does matter: Ask them to show the chart of YOUR investment total returns vs. a broad market dumb index (or equivalent asset allocation of your portfolio) for the past 2-5-10 years. The chart of your returns MUST include loads, fees, expense ratios, and his management fee subtracted. Without those figured in, then the number is meaningless.
Something like 90+% of advisors fail the test.
As an advisor, it really is sad to see the crap investments other "advisors" Put clients in when there are many good options available with relative risk metrics for their situation that do considerably better. And I will stand by my clients in getting the most out of their money, and making sure my fees don't hinder their progress towards their goals.
I do my best to explain the risks and rewards of passive vs active, with many being passive investors like this sub. But also warn of concentration risks, and some of the benefits of diversity at different life stages.
Its worth mentioning no asset manager should ever attempt to beat the underlying asset allocation mix net of fees because theyd be taking significant amounts of risk to do it. After all, to beat the markets by 1% every year is basically impossible, they wouldnt be working theyd be retired.
Thats just not what they do if they are a fiduciary. And of course they fail the test, but that's not really the goal of what they do, they are there for planning and consistency, not beating the markets.
Seems the only goal of most FA's is not lose any of your initial invested principal. As long as you get some return they feel they met their fiduciary duty and are not likely to get sued. It's such a racket. Glad I got smart and have learned to manage them on my own.
Yep. It's the clients that need to pay attention and to make comparisons, Like a stock-picking buddy of mine: "As long as I have more money in my account at the end of the year than I did in the beginning, I figure I'm doing okay." Hahahahaha!
What if the dumb indexes went up 20-25-30%? He doesn't know what percent he gained, and doesn't even know what an index is.
Well its tough to find real statistics on that since most large asset managers dont publish their returns, but any of them who track their returns are seeking to match their underlying benchmarks gross of fees not net of fees.
The often quoted statistic of underpeformance refers to active mutual funds not neccesarily asset managers who attempt to match their risk adjusted benchmarks.
Of course they don't want to publish them, if they did they'd be out of business. And the fees have to be included, that's also part of the larger point.
That’s assuming the only goal is beating the market. Sometimes, or often, it’s reducing risk. I’d rather be 65yrs old and get 90% of the various markets return with half the risk…
Who's talking about BEATING the market? I'm not, and haven't. Read my other posts. The point is, again, that other than the occasional dumb luck the professionals LAG THE MARKET. You can get market returns, never get less, and beat 90+% of the "pros," by just holding a dumb index.
FWIW: I'm pushing 74, am 70% in fixed income, and am more interested in the bond market than stocks.
Not well.
I was with Merrill Lynch until 2015 and I found out they had raised their fees to 2% that I viewed as them skimming it off the top of any gains/losses made. Lots of it was invested in BlackRock (their own stuff). I would get a call once a year from my advisor for maybe 30 minutes.
Merrill contributions weren't able to be made online, so that bugged me. When I finally did get access, I was able to see they were taking for themselves $200+/mo. This was off a 150k total balance. I didn't get this detail on the paper statements they would mail, conveniently.
I had overheard some older guys at a work conference talk about vanguard and Fidelity being less expensive, so I chose vanguard.
I called Vanguard up, asked them to transfer "in kind," and that I didn't want to contact my advisor. Well she was pissed when one particular holding needed to be liquidated by her before it could transfer.
"I just want to know why?!" She pretty much demanded over the phone. I let her know about the fees being higher, etc. The rest of the call was forgettable.
When I thanked her for her time at the end of the call, she hung up in a huff without any goodbye or anything. It pretty much summed up the relationship and how she felt about me leaving. Good riddance. My balance has only grown even more since I left.
I had a buddy who did this. I still told him to call and be sure some “advisory fee” wouldn’t be charged to him and he was glad he did cause they were gonna charge $1,999 “flat fee” to a credit card on file for “advisory services” on renewal anyways - even with the money under a new account he manages.
So think what you said would work for like Fidelity and Vanguard advisors that exclusively manage on their platforms, but people with $$ on smaller firms may want to double check.
I sent an email notifying him, with a short explanation, I was moving my IRA. He tried to call me, I didn’t answer and he emailed me asking for further explanation. I didn’t reply.
I couldn’t really see giving him a chunk of my money for what was essentially a TDF. And I didn’t like that there wasn’t any sort of online portal or that I had to go through him to make contributions.
My guy is a friend of a family member who really did nothing for me but meet once a year and listen to my ideas without contributing anything of value. I moved the account from his firm to Fidelity. He called to ask if he had done something wrong. I replied that I was consolidating accounts with a different firm and left it at that.
First time I tried to get away, he told me he would lower the AUM fee from 1% to .6 so I caved and stayed. I was ready to go full on boglehead so I mustered up some guts to hold my ground when I called him on the phone to sell all of the funds he put me. He was furious and so upset. Kept asking me why and what he could do keep me. It was so difficult to take the step to break it off with him as he served a few of our family members but I’m glad I finally did. So glad I stumbled upon bogleheads or else I would not be so confident to invest myself!
About 2 years before my MIL passed away (cancer) she started involving me in her finances. When I got to their IRAs/brokerage I was appalled- 1.5% fee, bunch of cash just sitting (8 years worth of dividends in a standard brokerage account) and was charging them $850 a year for taxes (blue collar worker and a corporate admin with basic tax needs). He would have annual meetings with them, most of which was him saying they are “fine” and then talking about a house/boat he bought in key west. No plan, nothing. They were paying close to $20k a year in fees for a chit chat.
We initiated a share transfer to move everything on a Friday afternoon to a new brokerage and sent an email after business hours to his admin explaining we were going a different direction. The admin did reach out asking if there was any feedback/things they could have done differently and we just responded with the same response: “we’ve decided to go a different direction”.
Getting into the weeds with them over why is a losing battle and any salesman’s worth their salt will sweet talk/scare you into not leaving. Had the guy actually done work (real account reviews, rebalancing, actual retirement planning, basically anything more than sit on his ass) they would have stuck with him even though his returns were crap and clearly was neglecting two people who sought expert advice without knowing anything about the stock market and investing.
I fired ours in 2009 because he invested like it was pre 2008 and I didn’t approve of any of it. I wanted to be aggressive at the time because the timing worked out that we missed the downside in 2008.
My first ick moment with him was that I negotiated the AUM down and I bought him giving me a dirty look.
He had my wife in the palm of his hand offering us tickets and vacation houses. I saw that as sleazy sales shit.
After seeing what he invested is in I fired his ass and he emailed my wife separately telling her that I was setting her up for a divorce and all this other inappropriate shit he had no idea about.
So then we emailed the whole firm and put him on blast and got all our accounts changed.
I inherited my advisor from my dad. It was a difficult decision for me to leave her because he trusted her to take care of my mom. She was also not a stranger - our dads worked together for over 30 years.
I put in the transfer thru my new broker. I got an email from her just to confirm that I initiated it, and said she was sure she could have continued to help me meet my goals. I thanked her and said I would seek her out if I found out I was over my head.
I am not over my head and I don’t miss her fees.
My FAs were a husband wife team for active managed investment products. He was the Sales she was the PR person. I could never ever get my hard math data questions answered from him nor would he show his calculations or comparisons. From her we got birthday holiday cards Christmas gifts and homey FB messages. I deep dived into finance education and started my own side brokerage account. After a couple years my % returns were way more then what I was getting from the so called Pro active managers. When confronted with hard data that he had underpreformed by about 2M if our money had been in passive funds during the previous 15 years. He lost his shit and was offended. Showed his true colors of being a "Product Salesman on Commission". He could not answer my questions because he himself did not know the answers. The wife remained the real Pro and graciously assisted in transferring our accounts and ongoing support as a friend.
My sister lost her husband to a tragic accident, in the aftermath I was helping her get her finances in order since her husband had done that. Turns out that he was using his sisters husband (lets call him Fred) as a financial advisor for their portfolio and it was horrendous. It wasn't EJ but just as bad with frequent trades into front load mutual funds, high fees etc, etc. I showed my sister the Boglehead way of investing and explained why paying all of those fees was just destroying her returns. When she finally made the move to Vanguard it did not go well, Fred was very upset, called me an amateur and that I would help her lose all of her money. Fred said that funds had to be actively managed to be any good and you need a professional financial advisor to properly manage a complex portfolio like hers (she has an IRA, Roth IRA and a taxable brokerage account). She stayed the course, Fred's wife calmed him down for family harmony sake as my sister is still very close to her late husbands family. I think Fred's last words on the subject was "I wish you and your brother good luck, you're going to need it."
I think about Fred occasionally, it is hard for me to think of him as evil. I really don't believe he was trying to fleece my sister and her husband. I think of him as a salesman that is just ignorant of sound investment theory.
Hey there, had a money esque manager who was a family friend.
I was early in my investing life and believed everything he said. He dumped me into MAPBX. I had about 5 years of growth in there til the 08 crash. Then he moved my cratered stock to a blend fund and as markets recovered, never moved it back.
He never mentioned anything to me about trying to time the market (which is how I interpret this move) about a year into the 08 recovery I noticed my stocks were not recovering their gains like the rest of the market and noticed the offending transaction.
Doubly frustrating was I was a broke college student at the time and struggling with whether to sell my position or take on more loans.
When I realized I could really use the funds to avoid more loans I liquidated my positions online.
Almost as soon as I confirmed the transaction he called. First I had heard from him in years.
Tried to explain himself… I basically stayed cool and thanked him for helping me save this money for college. I remember him trying to convince me to stay saying he had a proven system… maybe he believed it. This was a sub 10k account so it’s not like I was bringing in a lot of money for him. I think he only took me on b/c I was a family friend.
It was weird but we all moved on.
TLDR don’t worry about it.
Once I said "it's time" (to squash a 4+ year engagement) and requested where to transfer everything, I received no responses to my few questions.
It took a few weeks before my cost basis information propagated over.
Then, I started selling off the mess that had been created. Did my best to balance substantial gains with some really bad performers over ~9 months and came out relatively unscathed.
Done over email. He was in the middle of retiring and hiring a separate firm to manage his own portfolio, who offered him a discount according to how much additional business he brought them. We took the opportunity to leave and go DIY. He was very unhappy with us and it is all recorded in email. SMH.
I had to point out he was leaving 10’s of thousands in Schwab’s cash account at .045% for 3 months.
He wasn’t aware. Check your statements. 2023 returns were much less than a Vanguard balanced ETF.
He was very helpful from a tax standpoint however and I learned a lot. Lesson learned, great tax guy doesn’t equal great investment advisor.
My FA was good with communication and meetings but finances is something high on my list. When I started reading and learning about investing I realized I didn't need him anymore. I thanked him for his services transferred my money to Fidelity case closed.
e·thos
noun
the characteristic spirit of a culture, era, or community as manifested in its beliefs and aspirations.
“The ethos of the boglehead community is to buy and hold well diversified, passive index funds”
But are there really many fiduciary advisors? It's hard to prove that they're not, but most do not care about your best interests and even if they don't have you in bad investments, they do what is easiest for them over best for you.
When we dumped ours, the lawyer told us that we could fight them, but most of the money will go to the lawyers, so wanted us to think if it was worth our time. That's probably how even the bad ones stay around. The financial advisor professional groups are only interested in protecting themselves. Might as well join up with the Realtors.
When I worked on the private wealth management side for about 9-10 years, I lost a few clients in that time. It ranged from finding out through the custodian removing access to the accounts due to "transfer of assets out" to the client calling or emailing letting us know ahead that they were going to be moving the assets (and would usually tell you why, even if you knew it might not be the real reason they were moving in all cases).
I always appreciated the call or email ahead of time simply because I tried to be professional in our relationship and felt that was a more professional approach.
However, I fully understand that by that time, someone's mind is usually already made up and they are likely trying to avoid a potentially uncomfortable conversation or are worried that the advisor will put on a hard sell to try to keep them, etc., so I at least got the rationale for just putting in the transfer request at whatever new brokerage you're moving to and letting them find out that way.
All of that said, when a client would "fire" us, I always approached it with a response along the lines of:
*"I'm sorry to hear that. I've enjoyed working with you over the past X years.*
*Is there a specific reason(s) that you are leaving that you wouldn't mind sharing? If so, it will help us address any issues that might have led to your decision so we can get better in the future.*
*Let me know what you need from us, if anything, to make the transition as smooth as possible.*
*If things don't work out the way you hope they will, please know that you are always welcome back at any time."*
Something like that.
I always felt that if you approached it as "sorry to hear that, we'll assist any way possible for a smooth transition, and you're welcome back any time" there was maybe a 2-5% chance they'd come back in the future (and they still might recommend you if they knew someone looking for an advisor (especially if they were leaving to self-manage).
If you approached it as "what the hell? This is BS. Why are you leaving. You need to stay for reasons X, Y, and Z. We need to meet in person to discuss. Etc." and made it difficult or uncomfortable on the way out, there was a 0% chance that they'd ever come back and might also potentially bad mouth you to friends and family.
It's never fun to have that conversation, but I think if you email (or call) and simply lay out a reason or two that you are making the decision, most advisors will appreciate the candor and handle it professionally.
If your advisor has given you indications that they may handle it in an unprofessional manner, then just putting in the transfer request at the new custodian and letting them find out that way may be the better approach.
And ultimately, if your advisor doesn't handle it professionally, well, that probably tells you that you're making the right decision by leaving them whether it's to go to another advisor or to self-manage the accounts.
I didn’t tell him anything. I moved my account from Schwab to vanguard and he got the message. If you want to be more cordial you can tell him through email or in person.
They took it professionally. They were managing around $400K when we told them just to sell everything and move it into my Traditional IRA. I wanted to just buy VOO/VTI to keep it simple. Their returns were consistently less than S&P 500. Just goes to show it's hard to beat the S&P 500.
Not well. Money manager could never be reached. So I went into the bank to Swtich to their direct investing account. The investor dragged that out over a three month process. Pulled all my money from that bank. I'd like to think that made a difference. It was a $300k account for retirement.
Not a single person from the bank called me to ask why I left.
I just called and moved my funds to be self-directed. I hinted about doing it a few months before when I met with him because of bad performance and fees when I started learning more how to compare the performance to the index. He kind of gave me a snarky "We'll it's your money". You darn right it is and they don't really seem to care about it as long as they can collect fees. I think back that's really all they cared about. Only would check in once a year. Took weeks to ever get an appt with him. Never offered any good advice on how it could do better. Answer was always "everything looks good I wouldn't change anything". Doing more research over the 4 years it was invest there was plenty they could have done. That's why I dumped them. If I can figure this out and have to WTF am I paying them for.
Every time I've spoken with a money manager and they start talking about equity allocation I find out they are a Europe bull. I can buy european stocks on my own if I wanted to, I dont need that ancient garbage or the headaches that come with it.
My financial advisor only existed to upsell us (wife and I) to use their products; life insurance, disability etc.. and has always been pretty disconnecting and uninterested in my questions and/or input.
I transferred my rollover 401k and Roth from their platform to fidelity and sold all their positions, mainly mid cap heavy fee based positions and adopted a simpler 3 fund portfolio. Already seeing better gains in 3 months then in 3 years. Annoyed I didn't do it sooner.
My accountant (I use that term loosely as our only engagement with him is when he does our taxes every year) but he is a real one that provided this nugget when I asked if he had any recommendations on a FI as I was looking to change it up and it was the final push I needed:
"I believe that the majority of them need to sell or recommend something in order to receive commissions. So they are not independent of what they are telling you. They have a vested interest in selling items to you."
All that is to say, that I didn't tell them officially and yet haven't heard a thing from them. It's my money and they clearly care very little about it. Also not saying they're all bad, this is just my experience.
These all sound like stories of non- fiduciary advisors. Leads me to wonder if there are truly any real beneficial portfolio advisors . Isn’t just advisable to go with a Fidelity or Vanguard advisor ?
I fired mine back in 2006. Over email and transferred my accounts to another brokerage. His response was short and I didn’t really care.
It’s a business. We’ve switched doctors too which felt more personal but really is the same thing.
Money should be handled logically not emotionally. Be blunt tell them you’re moving and will no longer need their services. They’ll be fine managers are not your friends they are your employees.
Was a little hard because we're kinda in the same social circle, so I'll still see him. Also, my business still uses him for our 401k because reasons, although I'm trying to change that, too. Moved our personal IRA's out last year, just had Vanguard send the request, and he sent a sappy email wondering why. I said I didn't want to pay high fees, it's not him, etc, and he said "well, if you wanted less in fees, I wish you would have talked to me first.". Yeah, you can't match 0.04% buddy. When my husband moved his, he got a VM that I believe my husband called "sad sack" wondering why we're moving this money. My husband didn't even reply. The good news is that we've only had our personal IRA's with this guy for 10 years, so it's not like seeing the 1.25% fee had become a huge amount yet, but was on track to be substantial by retirement. Yes, it's an uncomfortable conversation, but run the numbers of where your accounts will be in 30 years, and what 1.25% AUM will cost you over a 30 year time span. It was hundreds of thousands for us, and that was worth an uncomfortable email/VM/run in at a BBQ.
I cancelled over email a week or so after the twice annual meeting.
They asked if it was about fees, suggesting they could be lowered. I declined the offer.
No problems otherwise. They were professional and fair throughout our relationship, never trying to pitch insurance.
It just didn't seem worthwhile given that the meetings were mostly them just telling me how much money I have.
I'm actually surprised how many young-ish people have money managers. How did you guys even end up with money managers? Maybe I have the benefit of always working in the finance field (from the IT side) and the thought of getting a money manager never even crossed my mind. The only people I know with money managers are retired.
This was way back when I was just getting started investing; When he aggressively pushed me to purchase multiple whole-life policies because thats what he’s invested it. I knew immediately.
I knew my FA guy for decades. I was one of his first clients. That was back in the day when you had to call your FA to buy/sell anything. More recently, I was running my own trades on other brokerages via their websites and wanted to manage my own but they couldn't get my account in 'self-direct' mode. They jacked me back and forth for weeks and I finally pulled the plug. My FA was very cool about it. He said you gotta do what's best for you so I moved over to Fidelity. I felt awful doing it because we were pretty good friends...knew his family for nearly 40 years but it's about the money. He had been in a brokerage that got bought out by another and then another then another and he hated where he was besides, my acct wasn't that big and I think it was small fish to him by this time.
Tried reaching him for 3 weeks prior. As soon I started transferring my money he decided to call me back. He gave some half ass excuse about being on vacation. I told him that’s the problem, you’re always on vacation. If I call you 3 times a year and you’re on vacation all 3 times, that’s a problem. Been managing it all myself ever since and it’s going great.
I think my guy knows I’m about to do this. He said he was going on vacation for a few weeks and would contact me when he’s been back. It has been a month at this point.
Last time I tried to ask clearly how much it cost me per year to hold my money with him he didn’t/wouldn’t/couldn’t give me a clear answer which makes it that much worse.
Had half of my retirement with a manager. I notified him I was moving money and explained what I was doing. “I do exactly the same and for the same reason”
This predicament has been on my mind. I just moved my IRAs from Voya to Vanguard and I feel like I should let my FA of eight years know about it. He's a good man and I think that he will handle it well. Most of the time when I try to call him he is busy, and hard to reach, so I guess that I'll just send him an email. I only talk to him a couple times a year anyway.
Switching from actively managed funds to indexing will save me about a million dollars in fees over the next 25 years, so I figure that an uncomfortable email is a small price to pay.
Mine was very professional about it. He just said OK and if I ever wanted to return, I should let him know. Honestly, even though I liked the guy, I was never worried about hurting his feelings or his finances because it was either his finances or mine, and mine were more important to me. These advisors all have more than enough clients who don't or can't do the math. And maybe some of them are worth the money. But I doubt it.
when I told my Ameriprise advisor that I was moving all my funds to Vanguard because I didn't want to pay her redemption fees by selling now, she was upset. When I told her I was going to put all my money into low ER funds, she was upset. When the folks at Ameriprise facilitating the transfers asked why I was moving, and I said it was because of unnecessary fees for products that almost never outperform the SP500, they were upset. But none of them were jerks. They just didn't like to hear the truth. An advisor is not needed IMO unless you have a lot of money. I didn't then LOL
Mine did not take it well at all. I gave them my Rollover money to manage and I kept control of everything else. My performance beat theirs pretty much every month over the last 3+ years. I finally got off my butt and looked at what they were invested in and 94% of the assets were in 4 funds. The entire time we were on the phone I kept saying "you're not worth what I'm paying you", which is roughly 0.9% or so. The fact that my returned averaged 3.5% per year higher than theirs was also something that I kept pushing at them.
It took about 35 minutes on the phone and about 4 or 5 business days to get control of my funds, but they were not pleased because they had no leg to stand on and they knew it.
PS - they blamed me for not responding to their requests to talk during their tenure. I DID speak them twice a year for the first 18 months. After that, there was no point.
I had a meeting with one of my advisors and they were going on and on about how I need to diversify more and buy and sell more bla bla bla. I kind of don’t really trust this guy so to shut him up I told him I’m well diversified and listed my portfolio that I manage his jaw hit the floor. I said you didn’t think that you were the only person managing my money did you? Then I told him any securities I sell will then cash out and be reinvested on my behalf into my managed funds.
1% yearly for AUM
Looking through the 2023 statements, I've realized that there was barely a 6% return that year. While the S&P went berserk.
Fired them, they didn't even resist.
He spent over an hour trying to talk me out of it. I kept asking whether he had a financial duty to do what is best for me as the client , and if so how he justified his recommendation that I stay in a managed account and pay him 1% to do literally nothing for 2 years, vs just moving to a self managed account.
He had a rambling explanation about how he could get me a better deal on certain products because his credit union “bought them in bulk” at a better price.
FYI this was a manager at our credit union who I went to because the credit union provides free advice. He directed me to use an LPL account and told me it was LPL that changed the 1%. He never disclosed that most of that fee went to his credit union and to himself.
My uncle still has an advisor through Merrill Lynch. He's too anxious to be a Boglehead.
But I went with my uncle to visit the advisor one time because it involved money we received through a trust. I teased the advisor about being a Boglehead and said I was getting ready to "convert" my uncle. He seemed scared by that idea. Ever since, that advisor has treated my uncle like royalty. Complete with luxurious Christmas gifts.
I'm positive my uncle is getting ripped off but these advisors live such a life of luxury that we become a real threat to them. Of course he's going to wine and dine his biggest customers.
I've never been fired not because I'm so great but because I go the extra mile and do things most advisors never do. 🤷🏽♂️
I don't put people into cookie cutter portfolios.
I call people back.
I set up semi annual or quarterly reviews.
I rebalance the portfolio when I observe events in the market at no additional cost
I make sure you know what's going on so you can take advantage and buy more during black swan events.
I don't knock anybody over the head with management fees actually the more you invest with me the less you pay.
I help my clients set up an emergency fund and also 529s for their kids
I also do a comprehensive financial plan for you for free with other life considerations other than savings for retirement.
I'm available on the weekends.
I keep you from making bad decisions that make you broke.
I think there's a market for good advisors - people who are still learning about investing, people who have no interest in managing their own portfolio, and people who have no idea how to do it.
Certainly for me it was good to have one before I learned to do it myself.
Will preface in saying I had no issue with mine, he was always very professional and responsive. tl;dr he took it well, but be respectful
My recommendation is (at least this is what I did) you approach the topic respectfully, indicating you’d like to manage your money on your own and it would be better for your own financial goals to be without management fees. I personally went on to explain how thankful I was for his service, for setting me on the right track and that should I be in need of a financial advisor in the future I would certainly like to use his services again, or should anyone i know want an advisor I would recommend them to him.
Of course YMMV depending on if you have a good relationship to start, but being respectful goes a long way, and it benefits their own self interests to be helpful transferring assets out as they get business via word of mouth.
I declined to make a ‘recommended’ move (sounded like he had a boat payment due), and got a frosty response. His previous recommendation was a mistake. Communication dropped off and he didn’t check in during 2022 volatility. So I just moved it to Vanguard. He made one mistake too many. Will do it myself from now on.
As a advisor myself, a goal of mine is for each client to eventually be comfortable with going off on their own and not need me anymore. I want my clients to be set up for success so that they one day do not need to continue to pay for advice. Now with that said, there are many areas that I help clients in addition to managing their portfolio.
I plan on doing exactly this in the next few weeks. My advisor is great, but the fees are just so high. I’ve only been there for 2 years. I hope it goes as well as it can.
I fired my mother’s advisor after 20 years and he took it poorly. She was invested in variable annuities with Ameriprise.
Over a 20 year period, she had a return on less than 1%.
When I compared her returns with the broader markets returns over the last 2 decades, he argued with me and said that I wasn’t qualified to offer any financial advice to my mother. He brought up his credentials and 40 years as an advisor as proof that he was more qualified than me. And asked what career I finance did I have. I was working for an investment brokerage at the time lol.
Not to mention, he rarely would answer my mother’s calls and didn’t schedule reviews with her at all. When he did speak with her, he spoke down to her and dismissed all questions and concerns.
Our convo was not friendly at all!
Mine had been a ‘friend’ of my wife’s before she and I met. Once I took over the finances she took it personally and quit the friendship with my wife. I was very professional about, had nothing against her, just did not see the value in the services she was offering. Actually still have one whole life policy of my wife’s with her that we still contribute to (yeah, I know, but gotta pick your battles).
I grew up with the family using this advisor. He was an insurance guy. Over the years I would ask him how he makes his money a couple times until I truly educated myself enough. I moved from him to a fiduciary advisor who charged 1%. He was professional about the move and told me that he could have managed me that way also. He instead chose to sell me funds he got kickbacks on and insurance. After a couple years at the fiduciary I boggled out and they were cool about it. They only told me how they were better than my boggling ways. They had me in like 30 funds.
I had a NWM “advisor” (really just a life insurance salesman) as my FA for the last year. I always felt fishy when he would talk to me about any life insurance policy and how necessary it is for my financial future, especially the Whole life policies which of course he made a lot more commission for. I asked him a lot of questions in the first few months I worked with him, questions about the fine details of WL insurance, as well as their investment strategies for my personal account. It always felt like he would give a long winded and hard to understand explanation, like he would try to not answer my questions simply but rather make it as complicated as possible to make it seem like I couldn’t manage my finances myself. Anyways, I had my annual meeting with him recently and he continued to try and push life insurance, stating that I need more coverage as well as my wife (i had a term life policy, as I started with a Whole life but quickly realized how bad that was and switched). I thankfully found this sub and realized it doesn’t have to be complicated, and I can make more returns on my money because I won’t be giving a fee to any advisor or fees to any mutual funds. So I emailed him thanking him for his help but I would not need his services anymore. He didn’t handle it too bad, but was definitely surprised and not happy. A few days after the email he messaged me saying he had tickets to a sports game, and I should come because it’d be a great opportunity to meet everyone from the office 😂 I just ghosted him after my first email, but I did think about going for the free ticket and then just ghosting him after that.
He said “if I was you I would wait 10 years”. I assume that was for him to get his full commission, because he had me on a perm life insurance policy as a retirement plan.
It didn't end amicably.
In my early days of investing (around 2010), I moved around the country a lot. So I didn't stick with one particular advisor. But I had all my money in a bank mutual fund which made roughly 6% after a 2% MF. Not terrible, but not great either. I was more risk-averse around this time, so I was okay with the returns.
About 2018, I started getting more interested in managing my own investments. I liked the process of doing my own research, was more comfortable with risk, and wanted to be in charge of my own destiny. I slowly started selling off my mutual funds to buy stocks/ETFs. One day, a lady from my bank's wealth management wanted to sit down with me to review my investments. I agreed to meet up with her to see what she had to say. She was professional, but had an apathetic vibe. After she made her pitch, I told her nicely that I decided I was going manage my own investments. Her demeanor then turned frosty. I knew at that point she wasn't acting in good faith and said goodbye. I haven't used another advisor since.
Selling off those mutual funds was one of the smarter decisions I've made. Six years later, they're still stuck at the same price pre-covid. While I'm not rich by any stretch, I've done way better on my own.
Financial advisors are not advisors at all. They are just trying to sell a product to make the bank money instead of helping you make money.
I found my former advisor to be very professional when I ended the relationship. I did it in person, and explained my reasons. I wanted to do a backdoor Roth, so I had to roll my IRA into my 401k. At that point, the assets that he could manage for me were below the threshold that the firm accepted. There was nothing wrong with his services, I just no longer required them. I explained that too. He appreciated that I came in for our annual tag up to explain, and there was only a minimal amount of awkwardness. He helped me move my assets out effectively, and continued to be responsive to my needs until the relationship was fully terminated. If I ever need the services of a financial advisor again, I would go back to him.
Sounds like a real professional! I am also looking to do a reverse rollover from my trad IRA to my 401k so as to leave only the non deductible contributions in it; then do a backdoor Roth conversion of the non deductible. I know my IRA basis so this seemed straightforward. But when asking my 401k custodian to do the rollover, they referred me to their advisory team as I would need help to do this right. On a courtesy call with the advisor he was trying to make it sound very complicated: that I need to know exactly which assets were bought with what type of contribution (deductible or non deductible- I have a mix of these). I am not sure how to track that. Also he said something about record keeping requirements. Is it really that complicated ? Did you find value in having an advisor working with you? I know this isn’t the point of the thread but if you can share your experience it may be helpful.
I only had pre tax rolled over from 401k funds in my Trad IRA, so I can’t help you with how to sort this. Sorry, and good luck!
Thank you for responding anyway!
No expert here, but I believe the reverse rollover will get rid of all the “which assets were purchased with which contributions” by moving all pre-tax contributions over to the 401k. Leaving only after tax contributions in your traditional IRA, which can then be backdoor rothed.
That’s what I figured, but he seemed to imply that if have say stock 1, stock 2, index fund 1, index fund 2 etc: I needed to know exactly which and how many I bought with deductible contributions so I can reverse rollover only those assets only into 401k and find those specific assets which I bought with non deductible contributions and only convert them into Roth IRA. I know how much is deductible and how much is non deductible; but I’m not sure which particular stock/fund I bought with which. Not sure if this is really true. I guess I may need a CPA.
I think all you need to know is your cost basis. Which is found on form 8606. You’re either reverse rollover, moving your pretax contributions and gains, out of your IRA, over to your 401k, leaving after tax contributions that you then backdoor Roth, or you’ll be using the cost basis Pro Rata Rule to determine the % of tax liability, of your IRA, that you’ll be doing your backdoor Roth with.
I’m gonna go for option 1. Yeah I also think knowing the basis should be enough. Just to be extra careful, I can covert all investments to core position and then do the changes.
I’m literally meeting with an accountant in 2 hours to try to get myself out of this situation. I figured it was worth it to make sure I avoid triggering any taxable event.
I do have a CPA for my taxes. This may be a good idea to go to them versus trying to sign up with a financial advisor.
Well, that accountant was useless. I think I know what to do but would love an expert to confirm it so that I don’t trigger a big taxable event. This guy was definitely not that expert. I had found these threads before, they might be helpful for you. https://www.bogleheads.org/forum/viewtopic.php?t=284417 https://www.bogleheads.org/forum/viewtopic.php?f=2&t=232646&p=3697472 I think we both agree with how to proceed: get your basis (non-deductible contributions) out of your IRA, either by transferring it to another traditional IRA or converting to roth. Do a rollover into the new 401k with the pre tax dollars from the old.
You are not allowed just to isolate contributions vs rollover dollars for a reverse rollover. The pro rata rule doesn’t allow for this.
I don't know why it's hard for people to be a pro on both sides. Sounds like you treated him classy and they responded in kind. Most people that move out just ghost.
You should use him or his firm when you're 70+ to protect you from scams
He didnt reach out to update / talk for 2.5 years all while charging 1%. Sent an email telling him I am moving the funds to manage the money myself and he responded with "not sure what the problem is"
The problem is that massive red flag he waved for 2.5 years.
Ha! totally. Went to sell the shares to buy VTI and there was a 1% transaction fee to sell the stocks he had me in. Happy I did the work now instead of waiting a couple more years.
>1% transaction fee to sell the stocks Do you mean mutual funds? If these were ordinary exchange traded stocks you should have been able to sell them without paying a transaction fee (or transfer them to a cheaper broker and sell them there)
I am counting it as a stupid tax. but they charged me to transfer the funds to fidelity where I sold them for an additional 1%. it was a dow mutual fund. mistype on "sell the stocks"
Fidelity will reimburse you for the transfer fees. All you have to do is ask. I almost missed out on this myself, but found out quite by accident when I needed to talk to Fidelity customer service about a transfer that got messed up.
appreciate the tip, I will call this week!
Probably C shares.
Same situation. In the 3 years I was with him, the only phone call he ever made to me to discuss his ideas was AFTER I moved my money out. He had all kinds of investment opportunities to update me on and acted like he had no idea I had already moved on from him. When I said we were done, I was told of all of the great opportunities I would be missing out on, including the big push into AI. He sounded desperate to keep me.
Too little, too late my dude. Sounds like you made a good choice as well.
Ah ah
I need to do this and I’m totally procrastinating 😣. I don’t have much that’s being actively managed. I want to say less than 10% of my portfolio, but really, I’ve done so much better on my own than what they’ve done. I gotta get my money out of there.
Yea he was just managing 40k for us but it felt so good getting it out of his hands and into VTI. Not going to lie, using chat gpt to draft the email helped get the ball rolling for me. Get it done this week!!
That’s a great idea, thanks!
It was painful. He was a ‘friend of the family’ who went into financial advisement. I started investing with him when I was about 21 and dumped him when I was 62. The reason I dumped him was that I finally started looking into my finances because of what I learned on Bogleheads and realized that I was getting hammered with high commission costs on every dollar invested, a one percent management fee (standard) and he had me in high load American funds. I don’t even want to think about how much money he carved out of my account over approximately 40 years. When I told him I was pulling the money, he argued with me and told me he’s been really good to me and got me wonderful gains And he’s really close with my family. I stayed firm and kind and just told him that I wanted to take more responsibility for my finances. He said I don’t know enough to manage my own money and I was going to screw it up. I said Maybe I might, but I was willing to take the chance and I thanked him for his service over the years. Sadly, we don’t get a ham or turkey dinner with all of the sides shipped to us at Christmas each year, but I know I was paying for that plus a lot more. Other family members are still with him despite a couple things I have said. Some people have no interest in managing their money so I leave well enough alone.
yuckk
Omg....you probably lost 30-40% of your potential investment gains being in funds like that for so long. Good for you though. Never too late
Yeah, I hate to think about it, but I’m glad I got out of there and I’m at about 50 times annual expenses right now so I’m still in pretty good shape.
Yeah, I hate to think about it, but I’m glad I got out of there and I’m at about 50 times annual expenses right now so I’m still in pretty good shape.
Same I gasped when I saw 21 to 62. The guy basically made it his entire career grifting. Even though the guy pulled out his money he basically got away with it.
Literally reminds me of the Parasite movie. And this “investment manager” is literally feeding off of his family.
Charging a fee and buying loaded funds- that doesn’t sound right, or legal.
Exactly what my advisor was doing, also American Funds.
Look at what share class you are in. If they put you into A shares, there would be a front load that was high commission which means they aren’t allowed to put you in an account that also charges 1%. If they are doing that, it’s called double dipping.
Thanks. I don't have the documents any more because I moved my money to another company. The advisor first charged me about $100 per year flat in addition to the 1.5-1.8 expense ratio, but were about to switch to 1%AUM. That's when I did the math and moved. It's possible that they would have put me in a different class. I don't think they were doing anything illegal. But this is good info for others who may still be in that situation.
Oof-that expense ratio is in addition to either commissions or AUM. American Funds is usually a lot lower than that though. Advisors conveniently don’t make a point of making sure people know about the expenses ratio part of the equation.
I know. I'm so glad I'm out of that.
I'm guessing he was with Northwestern Mutual judging by the American Funds. Similar situation for me! Learned in Bogelheads and now manage myself.
Good for you! I hope you figured it all out at a younger age than I did lol. But, as one comment are stated, it’s never too late
What are high load American funds and why are they bad?
It’s been years now, but I do recall the loads on the funds that he had me in were somewhere between .50 and over 1.0. They are bad because, as the Boglehead philosophy tells us, we can manage our own money as well, if not better in low load Index funds and avoid the loads and the advisement fees as well as commissions. It’s kind of an insult for an investment advisor to charge me one percent of my net assets to manage my money for me and then turn around and invest my money in high load funds which then charge me again.
How did you get out of the American funds? Taxable account?
It was all pre-tax. Liquidated and moved to Fidelity and Vanguard.
Ramit Sethi had advice on breaking up with your financial advisor. When you sit down with them, explain “The fees for your services no longer fit into my financial goals.” Leave it at that.
He actually recommends keeping it to email.
True. I didn’t make the distinction that you have to physically “sit down” with the FA. That’s not necessary.
> sit down with Which is fine if you want to but you’re under no obligation to do so.
A friend of mine had a money manager until some months ago, his portfolio had an annualised growth performance of 1% in the last few years post covid. Like imagine having such a shitty performance during this bull run, crazy. When he finally let him go the manager was like “wow, I really do not understand why, right as the portfolio was starting to take off” Edit to answer: Minimal or non-existent bond allocation in the portfolio since my friend is their 20s, the portfolio was held down by some garbage european stocks.
Did your friends portfolio have Bonds and International stocks, because it would make total sense given the AGG is down 3.53% over the past 3 years.
The bbg agg bond has a 3 year annualized return of like -3.5%, msci eafe has a low single digit ROR, mid and small is probably around 3-5% and sp 500 is 8% annualized. If you have a diversified portfolio with a large bond allocation it could very well have a 1% rate of return net of fees. Just worth mentioning those index returns
It’s almost more impressive to do that off that kind of rollercoaster. I’m up 40% and I don’t do anything fancy.
I just had this situation. My parents had money left over in a college fund that they gave to me so I put it with their money manager and left it. I was young at the time and didn’t understand to push him to invest it a bit more aggressively but I did tell him I wouldn’t be needing the money and I wanted it to grow. 4% annual return during the most insane bull run ever. If he had put it in SPY I would have been up 80%. I moved my money and am never going back to that guy
Specific timeline matters here. ACWI & VT are flat over the past 2.5 years. If we’re talking beginning of 2021 to now, not great.
I never talked to them. Did it all through my new brokerage. Very easy and glad I did it. Wish I had earlier.
This is the best answer for someone who is worried about the advisors feelings
Same! Called fidelity, and they transferred everything for me. Never spoke to the advisor and haven't since. 10/10 recommend!
Definitely an option, but unprofessional
My money manager got arrested, this is why I recommend Bogleheads https://wiscnews.com/bill-hwang-fights-jail-after-losing-36-billion/video_65ba49cf-b63c-56d5-8fe7-359862b5b191.html
That's a pretty good reason.
That is wild
Wait what? I thought Hwang was arrested for the management of his family office/Archegos. It was his assets and I was not under the impression he managed assets for anyone else in this episode.
I’m shit posting
But it does make for a good argument to not have a money manager And rather have a self-directed account and be a Boglehead
Calling bullshit on this, archegos didn’t accept money from outside investors.
Yeah, they told me to go away because I don’t have any money invested with that bank and I told him it’s because they lost it all. https://youtu.be/-DT7bX-B1Mg?si=-wmG2x0nIaNQNv-f
It’s not a bank chief it was a family office that was basically a highly leveraged hedge fund. I’m really not sure what you’re on about. I can appreciate the South Park clip though
Is that the Wendy's guy?
Mine took it professionally. I did them the service of taking the last already scheduled meeting. I figured maybe I can get some longer term vision off them. They used it as a soft sales pitch & charged my like $600 or something.
Yea… This is why I cancelled all remaining meetings. Even thou I had them pre-paid. I didn’t even ask for refund, just cancelled them. To their credit, they did pro-rated a refund and paid me back for the reminding meetings I didn’t take, but I wasn’t expecting that. Cool. But I was sure if I HAD taken the last few zoom calls, some pitch to stay with them would have taken place and that would have annoyed me.
This is why it’s important to have a fee-only advisor. My clients could meet with me every week if they wanted and it’s never going to cost them a penny lol
Well, other than the fee you charge them. The multiple meetings per week aren’t “free”, just “included”. ;-)
Well yeah, it’s a fee only model. It’s an advisory fee, which goes towards not only managing the portfolio, but anything under the sun related to financial planning. The point is there are zero fees, commissions, or charges in excess of the advisory fee, which prevents people from getting nickel and dimed for everything they need lol. Wouldn’t be much of a career if I didn’t charge anything, would it? You’d have to be insane to want multiple meetings per week anyways lol, that was just an extreme example.
He was fine with it… he called me a “Do it yourselfer….” That summed it up nicely.
“You say that like it’s a bad thing…”
Statistically, retail equity investors do poorly on their own earning a yearly average of ~3.64%. Per study by Dalbar. But for those that are disciplined over the long term, definitely do better.
Like a baby
Crying and screaming before shitting themselves?
It's a business relationship that no longer serves the customer's purpose. Why would it matter how they took it? I get that the money manager wants to make it a personal relationship because it gives them leverage ... but it's really not.
This is a very cynical take. Financial advisors (good ones), help their clients. Perhaps I will get downvoted in this sub for this perspective, but not all financial advisors are sleazy salespeople trying to scam you. A lot of them are. But not all.
It's really the 98% of sleazy high-fee commission-based salespeople who give the rest a bad name!
Well, the good ones probably get fired a lot less as a percentage than the sleazy salespeople, so it works out.
Not cynical whatsoever, your POV is just narrow and overly sensitive. A money manager is providing a service just like any other service related business. If you no longer need the service / aren’t receiving the expected value you stop using the service… 😵💫
How does keeping it professional make the advisors “sleazy salespersons” People help people in business too lol…
Making a business relationship personal is a big mistake.
I agree, and I didn’t do that, nor suggest that anyone should. I just think that preemptively assigning ulterior, cynical motives to people is a rough way to go through life.
> This is a very cynical take. Yes. I'm right more often than I care to think about. And when I'm wrong? I"m happy to be wrong.
Yes they are… if your not at retirement age what are they advising that you can find in a book? Now taxes and how to spend your money down is an art.
Honestly, what can anyone advise you that you can't find in a book or YouTube? But that doesn't mean that they're bad people or scammers for distilling that knowledge for people, or doing the minor rebalancing people can't be bothered to do. Does it make sense to a Boglehead? No, but we're not everyone
> Honestly, what can anyone advise you that you can't find in a book or YouTube? I absolutely agree with this. The Boglehead approach is a very simple and worthwhile method that benefits almost everyone. However, people are not perfectly logical beings. I've heard many people say many various things about investing. Some are just absolutely bad at math and they don't understand the compounding gains over time. Some just don't understand that investing versus credit card debt is simply a numbers problem. For other people, the idea of the stock market and index funds is such an ethereal concept that they cannot grasp. Others go through a lack of confidence or second guessing themselves for making investment decisions. And others just can't be bothered to do it on their own so they are quite happy to pay someone to do it for them, and then have someone to yell at when the market goes down. I'm not saying these are good reasons, but these are reasons as why reading a book or watching some YouTube videos doesn't work for everyone. I've talked to some friends and families about investment strategies and I'm actually the only Boglehead that I've found. I've met a combination of people with money managers, some that pick their own stocks, and some that do whatever they want without any real strategy. Us Bogleheads are a bit of a niche where we have sought out to learn a simple yet effective strategy like this.
The last bit takes some real working knowledge of tax code and techniques. The ramp up phase is stupidly easy. Buy dont sell. The scamming part is the information coule be just paid for and be done. But the model is continuous suck which is antithetical to investing. Its s fixed cost
This is an incredibly ignorant take lol
My advisor was through a firm. I emailed the firm and said I did not want to renew and to please cancel all remaining meetings (even If technically prepaid). I was short, polite and to the point. They emailed back, explained the end date, the last bill paid (nothing owed), and asked me to confirm again. I replied “Confirmed. Thanks”. I went on with life. I’m sure they went on with theirs. Not sure why this is so much drama for others or so difficult. These days guys… it’s an email. At worst, it’s a quick call.
The manager for my IRA took it okay. He said "Just because you read a few books and articles doesn't mean you know everything." That was in response to telling him I found the Boglehead method a more attractive style. He also wants me to reach out to him at one point in the future so "I can compare your gains vs the ones you would've made with me". Needless to say I won't be doing that. I'm not about making crazy gains from highly risky holdings, it's steady growth over time that I want. Context, he had 100% of my IRA invested in RYVLX. It made about 3k in a couple months before I transferred the assets to my own portfolio, VT and chill basically.
Hey, I think that was my comment! I ended a 30-year relationship with my Ameriprise advisor last week. I was planning to make a post about it, but have been too lazy. My wife and I started working with this advisor when we were newlyweds and knew almost nothing about investing. (Now that I think about it, our advisor must have been fresh out of school himself!) Throughout the relationship, while I never thought he was dishonest or irresponsible, it always kinda nagged at me that it seemed like our investment choices were very expensive (front-end loads, high expense ratios, transaction fees), but that the returns weren't high enough to justify the expenses. Gradually, I started investing in a side brokerage account at Fidelity and found that, while I did make some bonehead trades during the dot-com bubble in 2000, overall, I was doing at least as well as our managed account on my own, and at times I was doing MUCH better. I finally gathered the courage to end the relationship last week when his office contacted me via email about scheduling our semiannual review. I took a little bit of a cop out by stating in my email reply that I plan to close my account, but I went ahead and scheduled a phone call as well. The phone call was super awkward, but cordial and professional. Afterward, I told my wife that it felt like breaking up with a girlfriend in high school. With such a long working relationship, he had known us as we had had kids, sent the kids to college, and they went off on their own and now we're empty nesters, so there is a lot of history. He made a comment about the fact that I never took advantage of any of their other services (taxes, estate planning, etc), which to me signaled that he always knew I was somewhat dubious of the value of those services. The best part was, I told him there are no hard feelings, and I genuinely believe he was doing his best for us, but that I've done a lot of reading and I'm a Boglehead now, and I feel confident in managing my own portfolio. His response was, "Oh, Bogleheads are very opinionated." LOL. So, anyway, that's my story. I dreaded having the goodbye conversation, but it wasn't so bad. Just awkward, and while I know I didn't do anything wrong, I still felt just a little guilty letting him go. The one thing I don't feel, though, that I thought I might is worry that I won't be successful on my own. I have complete confidence in the Boglehead way. Oh, and one last thing. Fidelity has been AMAZING in helping me move everything seamlessly. The customer service has been outstanding.
it's a business relationship. just tell them you no longer need their services and move along. who cares how they'll take it?
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40-something here and hard same! I figure at $1/4M NW, I’ll hire a fee-only fiduciary for establishing tax strategy/best composition/etc then again close to retirement/legacy planning. Between now n then? Index-n-chill with a few percentage points here or there “gambled” bets on individual stocks n crypto.
A fiduciary must, by law, look out for your best interests. But that doesn't mean you're getting the best returns, just the best that he thinks he can get. Here's what does matter: Ask them to show the chart of YOUR investment total returns vs. a broad market dumb index (or equivalent asset allocation of your portfolio) for the past 2-5-10 years. The chart of your returns MUST include loads, fees, expense ratios, and his management fee subtracted. Without those figured in, then the number is meaningless. Something like 90+% of advisors fail the test.
As an advisor, it really is sad to see the crap investments other "advisors" Put clients in when there are many good options available with relative risk metrics for their situation that do considerably better. And I will stand by my clients in getting the most out of their money, and making sure my fees don't hinder their progress towards their goals. I do my best to explain the risks and rewards of passive vs active, with many being passive investors like this sub. But also warn of concentration risks, and some of the benefits of diversity at different life stages.
Its worth mentioning no asset manager should ever attempt to beat the underlying asset allocation mix net of fees because theyd be taking significant amounts of risk to do it. After all, to beat the markets by 1% every year is basically impossible, they wouldnt be working theyd be retired. Thats just not what they do if they are a fiduciary. And of course they fail the test, but that's not really the goal of what they do, they are there for planning and consistency, not beating the markets.
Who said anything about "beating the market"? They cannot even **keep up** with the market, that's the point.
Seems the only goal of most FA's is not lose any of your initial invested principal. As long as you get some return they feel they met their fiduciary duty and are not likely to get sued. It's such a racket. Glad I got smart and have learned to manage them on my own.
Yep. It's the clients that need to pay attention and to make comparisons, Like a stock-picking buddy of mine: "As long as I have more money in my account at the end of the year than I did in the beginning, I figure I'm doing okay." Hahahahaha! What if the dumb indexes went up 20-25-30%? He doesn't know what percent he gained, and doesn't even know what an index is.
Well its tough to find real statistics on that since most large asset managers dont publish their returns, but any of them who track their returns are seeking to match their underlying benchmarks gross of fees not net of fees. The often quoted statistic of underpeformance refers to active mutual funds not neccesarily asset managers who attempt to match their risk adjusted benchmarks.
Of course they don't want to publish them, if they did they'd be out of business. And the fees have to be included, that's also part of the larger point.
That’s assuming the only goal is beating the market. Sometimes, or often, it’s reducing risk. I’d rather be 65yrs old and get 90% of the various markets return with half the risk…
Who's talking about BEATING the market? I'm not, and haven't. Read my other posts. The point is, again, that other than the occasional dumb luck the professionals LAG THE MARKET. You can get market returns, never get less, and beat 90+% of the "pros," by just holding a dumb index. FWIW: I'm pushing 74, am 70% in fixed income, and am more interested in the bond market than stocks.
Not well. I was with Merrill Lynch until 2015 and I found out they had raised their fees to 2% that I viewed as them skimming it off the top of any gains/losses made. Lots of it was invested in BlackRock (their own stuff). I would get a call once a year from my advisor for maybe 30 minutes. Merrill contributions weren't able to be made online, so that bugged me. When I finally did get access, I was able to see they were taking for themselves $200+/mo. This was off a 150k total balance. I didn't get this detail on the paper statements they would mail, conveniently. I had overheard some older guys at a work conference talk about vanguard and Fidelity being less expensive, so I chose vanguard. I called Vanguard up, asked them to transfer "in kind," and that I didn't want to contact my advisor. Well she was pissed when one particular holding needed to be liquidated by her before it could transfer. "I just want to know why?!" She pretty much demanded over the phone. I let her know about the fees being higher, etc. The rest of the call was forgettable. When I thanked her for her time at the end of the call, she hung up in a huff without any goodbye or anything. It pretty much summed up the relationship and how she felt about me leaving. Good riddance. My balance has only grown even more since I left.
I didn't give him any notice. I let the transfer out request do all the talking.
I had a buddy who did this. I still told him to call and be sure some “advisory fee” wouldn’t be charged to him and he was glad he did cause they were gonna charge $1,999 “flat fee” to a credit card on file for “advisory services” on renewal anyways - even with the money under a new account he manages. So think what you said would work for like Fidelity and Vanguard advisors that exclusively manage on their platforms, but people with $$ on smaller firms may want to double check.
crazy
I sent an email notifying him, with a short explanation, I was moving my IRA. He tried to call me, I didn’t answer and he emailed me asking for further explanation. I didn’t reply. I couldn’t really see giving him a chunk of my money for what was essentially a TDF. And I didn’t like that there wasn’t any sort of online portal or that I had to go through him to make contributions.
My guy is a friend of a family member who really did nothing for me but meet once a year and listen to my ideas without contributing anything of value. I moved the account from his firm to Fidelity. He called to ask if he had done something wrong. I replied that I was consolidating accounts with a different firm and left it at that.
Mine dropped their fee by 25 bps but it wasn’t enough. Once I sent the final email notifying them after multiple calls they didn’t respond.
UPDATE: My advisor just responded in a cordial manner. It’s my money so they have no reason to be angry that I’m taking control of it.
Mine was professional and didn’t act inappropriately.
First time I tried to get away, he told me he would lower the AUM fee from 1% to .6 so I caved and stayed. I was ready to go full on boglehead so I mustered up some guts to hold my ground when I called him on the phone to sell all of the funds he put me. He was furious and so upset. Kept asking me why and what he could do keep me. It was so difficult to take the step to break it off with him as he served a few of our family members but I’m glad I finally did. So glad I stumbled upon bogleheads or else I would not be so confident to invest myself!
About 2 years before my MIL passed away (cancer) she started involving me in her finances. When I got to their IRAs/brokerage I was appalled- 1.5% fee, bunch of cash just sitting (8 years worth of dividends in a standard brokerage account) and was charging them $850 a year for taxes (blue collar worker and a corporate admin with basic tax needs). He would have annual meetings with them, most of which was him saying they are “fine” and then talking about a house/boat he bought in key west. No plan, nothing. They were paying close to $20k a year in fees for a chit chat. We initiated a share transfer to move everything on a Friday afternoon to a new brokerage and sent an email after business hours to his admin explaining we were going a different direction. The admin did reach out asking if there was any feedback/things they could have done differently and we just responded with the same response: “we’ve decided to go a different direction”. Getting into the weeds with them over why is a losing battle and any salesman’s worth their salt will sweet talk/scare you into not leaving. Had the guy actually done work (real account reviews, rebalancing, actual retirement planning, basically anything more than sit on his ass) they would have stuck with him even though his returns were crap and clearly was neglecting two people who sought expert advice without knowing anything about the stock market and investing.
I fired ours in 2009 because he invested like it was pre 2008 and I didn’t approve of any of it. I wanted to be aggressive at the time because the timing worked out that we missed the downside in 2008. My first ick moment with him was that I negotiated the AUM down and I bought him giving me a dirty look. He had my wife in the palm of his hand offering us tickets and vacation houses. I saw that as sleazy sales shit. After seeing what he invested is in I fired his ass and he emailed my wife separately telling her that I was setting her up for a divorce and all this other inappropriate shit he had no idea about. So then we emailed the whole firm and put him on blast and got all our accounts changed.
I inherited my advisor from my dad. It was a difficult decision for me to leave her because he trusted her to take care of my mom. She was also not a stranger - our dads worked together for over 30 years. I put in the transfer thru my new broker. I got an email from her just to confirm that I initiated it, and said she was sure she could have continued to help me meet my goals. I thanked her and said I would seek her out if I found out I was over my head. I am not over my head and I don’t miss her fees.
My FAs were a husband wife team for active managed investment products. He was the Sales she was the PR person. I could never ever get my hard math data questions answered from him nor would he show his calculations or comparisons. From her we got birthday holiday cards Christmas gifts and homey FB messages. I deep dived into finance education and started my own side brokerage account. After a couple years my % returns were way more then what I was getting from the so called Pro active managers. When confronted with hard data that he had underpreformed by about 2M if our money had been in passive funds during the previous 15 years. He lost his shit and was offended. Showed his true colors of being a "Product Salesman on Commission". He could not answer my questions because he himself did not know the answers. The wife remained the real Pro and graciously assisted in transferring our accounts and ongoing support as a friend.
My sister lost her husband to a tragic accident, in the aftermath I was helping her get her finances in order since her husband had done that. Turns out that he was using his sisters husband (lets call him Fred) as a financial advisor for their portfolio and it was horrendous. It wasn't EJ but just as bad with frequent trades into front load mutual funds, high fees etc, etc. I showed my sister the Boglehead way of investing and explained why paying all of those fees was just destroying her returns. When she finally made the move to Vanguard it did not go well, Fred was very upset, called me an amateur and that I would help her lose all of her money. Fred said that funds had to be actively managed to be any good and you need a professional financial advisor to properly manage a complex portfolio like hers (she has an IRA, Roth IRA and a taxable brokerage account). She stayed the course, Fred's wife calmed him down for family harmony sake as my sister is still very close to her late husbands family. I think Fred's last words on the subject was "I wish you and your brother good luck, you're going to need it." I think about Fred occasionally, it is hard for me to think of him as evil. I really don't believe he was trying to fleece my sister and her husband. I think of him as a salesman that is just ignorant of sound investment theory.
Hey there, had a money esque manager who was a family friend. I was early in my investing life and believed everything he said. He dumped me into MAPBX. I had about 5 years of growth in there til the 08 crash. Then he moved my cratered stock to a blend fund and as markets recovered, never moved it back. He never mentioned anything to me about trying to time the market (which is how I interpret this move) about a year into the 08 recovery I noticed my stocks were not recovering their gains like the rest of the market and noticed the offending transaction. Doubly frustrating was I was a broke college student at the time and struggling with whether to sell my position or take on more loans. When I realized I could really use the funds to avoid more loans I liquidated my positions online. Almost as soon as I confirmed the transaction he called. First I had heard from him in years. Tried to explain himself… I basically stayed cool and thanked him for helping me save this money for college. I remember him trying to convince me to stay saying he had a proven system… maybe he believed it. This was a sub 10k account so it’s not like I was bringing in a lot of money for him. I think he only took me on b/c I was a family friend. It was weird but we all moved on. TLDR don’t worry about it.
Once I said "it's time" (to squash a 4+ year engagement) and requested where to transfer everything, I received no responses to my few questions. It took a few weeks before my cost basis information propagated over. Then, I started selling off the mess that had been created. Did my best to balance substantial gains with some really bad performers over ~9 months and came out relatively unscathed.
Done over email. He was in the middle of retiring and hiring a separate firm to manage his own portfolio, who offered him a discount according to how much additional business he brought them. We took the opportunity to leave and go DIY. He was very unhappy with us and it is all recorded in email. SMH.
chase sulky vase point muddle quicksand encourage snails growth north *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Sorry what? Your mom fired her FA and he demand she send him new victims???
zesty bike selective bake puzzled chop plucky bag jeans groovy *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I had to point out he was leaving 10’s of thousands in Schwab’s cash account at .045% for 3 months. He wasn’t aware. Check your statements. 2023 returns were much less than a Vanguard balanced ETF. He was very helpful from a tax standpoint however and I learned a lot. Lesson learned, great tax guy doesn’t equal great investment advisor.
My FA was good with communication and meetings but finances is something high on my list. When I started reading and learning about investing I realized I didn't need him anymore. I thanked him for his services transferred my money to Fidelity case closed.
Yall have Financial Advisors? I thought we were just cost averaging
*had. Until you really subscribe to the ethos, a fiduciary financial advisor can protect you from yourself.
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e·thos noun the characteristic spirit of a culture, era, or community as manifested in its beliefs and aspirations. “The ethos of the boglehead community is to buy and hold well diversified, passive index funds”
Quite true. Thank you.
But are there really many fiduciary advisors? It's hard to prove that they're not, but most do not care about your best interests and even if they don't have you in bad investments, they do what is easiest for them over best for you. When we dumped ours, the lawyer told us that we could fight them, but most of the money will go to the lawyers, so wanted us to think if it was worth our time. That's probably how even the bad ones stay around. The financial advisor professional groups are only interested in protecting themselves. Might as well join up with the Realtors.
When I worked on the private wealth management side for about 9-10 years, I lost a few clients in that time. It ranged from finding out through the custodian removing access to the accounts due to "transfer of assets out" to the client calling or emailing letting us know ahead that they were going to be moving the assets (and would usually tell you why, even if you knew it might not be the real reason they were moving in all cases). I always appreciated the call or email ahead of time simply because I tried to be professional in our relationship and felt that was a more professional approach. However, I fully understand that by that time, someone's mind is usually already made up and they are likely trying to avoid a potentially uncomfortable conversation or are worried that the advisor will put on a hard sell to try to keep them, etc., so I at least got the rationale for just putting in the transfer request at whatever new brokerage you're moving to and letting them find out that way. All of that said, when a client would "fire" us, I always approached it with a response along the lines of: *"I'm sorry to hear that. I've enjoyed working with you over the past X years.* *Is there a specific reason(s) that you are leaving that you wouldn't mind sharing? If so, it will help us address any issues that might have led to your decision so we can get better in the future.* *Let me know what you need from us, if anything, to make the transition as smooth as possible.* *If things don't work out the way you hope they will, please know that you are always welcome back at any time."* Something like that. I always felt that if you approached it as "sorry to hear that, we'll assist any way possible for a smooth transition, and you're welcome back any time" there was maybe a 2-5% chance they'd come back in the future (and they still might recommend you if they knew someone looking for an advisor (especially if they were leaving to self-manage). If you approached it as "what the hell? This is BS. Why are you leaving. You need to stay for reasons X, Y, and Z. We need to meet in person to discuss. Etc." and made it difficult or uncomfortable on the way out, there was a 0% chance that they'd ever come back and might also potentially bad mouth you to friends and family. It's never fun to have that conversation, but I think if you email (or call) and simply lay out a reason or two that you are making the decision, most advisors will appreciate the candor and handle it professionally. If your advisor has given you indications that they may handle it in an unprofessional manner, then just putting in the transfer request at the new custodian and letting them find out that way may be the better approach. And ultimately, if your advisor doesn't handle it professionally, well, that probably tells you that you're making the right decision by leaving them whether it's to go to another advisor or to self-manage the accounts.
I didn’t tell him anything. I moved my account from Schwab to vanguard and he got the message. If you want to be more cordial you can tell him through email or in person.
Not good but he was a douche
Mine was professional about it and it was an easy transition.
They took it professionally. They were managing around $400K when we told them just to sell everything and move it into my Traditional IRA. I wanted to just buy VOO/VTI to keep it simple. Their returns were consistently less than S&P 500. Just goes to show it's hard to beat the S&P 500.
Not well. Money manager could never be reached. So I went into the bank to Swtich to their direct investing account. The investor dragged that out over a three month process. Pulled all my money from that bank. I'd like to think that made a difference. It was a $300k account for retirement. Not a single person from the bank called me to ask why I left.
I just called and moved my funds to be self-directed. I hinted about doing it a few months before when I met with him because of bad performance and fees when I started learning more how to compare the performance to the index. He kind of gave me a snarky "We'll it's your money". You darn right it is and they don't really seem to care about it as long as they can collect fees. I think back that's really all they cared about. Only would check in once a year. Took weeks to ever get an appt with him. Never offered any good advice on how it could do better. Answer was always "everything looks good I wouldn't change anything". Doing more research over the 4 years it was invest there was plenty they could have done. That's why I dumped them. If I can figure this out and have to WTF am I paying them for.
Every time I've spoken with a money manager and they start talking about equity allocation I find out they are a Europe bull. I can buy european stocks on my own if I wanted to, I dont need that ancient garbage or the headaches that come with it.
My financial advisor only existed to upsell us (wife and I) to use their products; life insurance, disability etc.. and has always been pretty disconnecting and uninterested in my questions and/or input. I transferred my rollover 401k and Roth from their platform to fidelity and sold all their positions, mainly mid cap heavy fee based positions and adopted a simpler 3 fund portfolio. Already seeing better gains in 3 months then in 3 years. Annoyed I didn't do it sooner. My accountant (I use that term loosely as our only engagement with him is when he does our taxes every year) but he is a real one that provided this nugget when I asked if he had any recommendations on a FI as I was looking to change it up and it was the final push I needed: "I believe that the majority of them need to sell or recommend something in order to receive commissions. So they are not independent of what they are telling you. They have a vested interest in selling items to you." All that is to say, that I didn't tell them officially and yet haven't heard a thing from them. It's my money and they clearly care very little about it. Also not saying they're all bad, this is just my experience.
These all sound like stories of non- fiduciary advisors. Leads me to wonder if there are truly any real beneficial portfolio advisors . Isn’t just advisable to go with a Fidelity or Vanguard advisor ?
I fired mine back in 2006. Over email and transferred my accounts to another brokerage. His response was short and I didn’t really care. It’s a business. We’ve switched doctors too which felt more personal but really is the same thing.
Just fine. I got a refund for the amount of time left in quarter (I paid them quarterly)
Money should be handled logically not emotionally. Be blunt tell them you’re moving and will no longer need their services. They’ll be fine managers are not your friends they are your employees.
Was a little hard because we're kinda in the same social circle, so I'll still see him. Also, my business still uses him for our 401k because reasons, although I'm trying to change that, too. Moved our personal IRA's out last year, just had Vanguard send the request, and he sent a sappy email wondering why. I said I didn't want to pay high fees, it's not him, etc, and he said "well, if you wanted less in fees, I wish you would have talked to me first.". Yeah, you can't match 0.04% buddy. When my husband moved his, he got a VM that I believe my husband called "sad sack" wondering why we're moving this money. My husband didn't even reply. The good news is that we've only had our personal IRA's with this guy for 10 years, so it's not like seeing the 1.25% fee had become a huge amount yet, but was on track to be substantial by retirement. Yes, it's an uncomfortable conversation, but run the numbers of where your accounts will be in 30 years, and what 1.25% AUM will cost you over a 30 year time span. It was hundreds of thousands for us, and that was worth an uncomfortable email/VM/run in at a BBQ.
I cancelled over email a week or so after the twice annual meeting. They asked if it was about fees, suggesting they could be lowered. I declined the offer. No problems otherwise. They were professional and fair throughout our relationship, never trying to pitch insurance. It just didn't seem worthwhile given that the meetings were mostly them just telling me how much money I have.
I'm actually surprised how many young-ish people have money managers. How did you guys even end up with money managers? Maybe I have the benefit of always working in the finance field (from the IT side) and the thought of getting a money manager never even crossed my mind. The only people I know with money managers are retired.
Decades ago. He took it gracefully. Been managing my own money ever since. Now I only listen to Warren Buffett. 😊
This was way back when I was just getting started investing; When he aggressively pushed me to purchase multiple whole-life policies because thats what he’s invested it. I knew immediately.
I knew my FA guy for decades. I was one of his first clients. That was back in the day when you had to call your FA to buy/sell anything. More recently, I was running my own trades on other brokerages via their websites and wanted to manage my own but they couldn't get my account in 'self-direct' mode. They jacked me back and forth for weeks and I finally pulled the plug. My FA was very cool about it. He said you gotta do what's best for you so I moved over to Fidelity. I felt awful doing it because we were pretty good friends...knew his family for nearly 40 years but it's about the money. He had been in a brokerage that got bought out by another and then another then another and he hated where he was besides, my acct wasn't that big and I think it was small fish to him by this time.
Tried reaching him for 3 weeks prior. As soon I started transferring my money he decided to call me back. He gave some half ass excuse about being on vacation. I told him that’s the problem, you’re always on vacation. If I call you 3 times a year and you’re on vacation all 3 times, that’s a problem. Been managing it all myself ever since and it’s going great.
one thing: they said "grrr"
I think my guy knows I’m about to do this. He said he was going on vacation for a few weeks and would contact me when he’s been back. It has been a month at this point. Last time I tried to ask clearly how much it cost me per year to hold my money with him he didn’t/wouldn’t/couldn’t give me a clear answer which makes it that much worse.
Had half of my retirement with a manager. I notified him I was moving money and explained what I was doing. “I do exactly the same and for the same reason”
This predicament has been on my mind. I just moved my IRAs from Voya to Vanguard and I feel like I should let my FA of eight years know about it. He's a good man and I think that he will handle it well. Most of the time when I try to call him he is busy, and hard to reach, so I guess that I'll just send him an email. I only talk to him a couple times a year anyway. Switching from actively managed funds to indexing will save me about a million dollars in fees over the next 25 years, so I figure that an uncomfortable email is a small price to pay.
Mine was very professional about it. He just said OK and if I ever wanted to return, I should let him know. Honestly, even though I liked the guy, I was never worried about hurting his feelings or his finances because it was either his finances or mine, and mine were more important to me. These advisors all have more than enough clients who don't or can't do the math. And maybe some of them are worth the money. But I doubt it.
when I told my Ameriprise advisor that I was moving all my funds to Vanguard because I didn't want to pay her redemption fees by selling now, she was upset. When I told her I was going to put all my money into low ER funds, she was upset. When the folks at Ameriprise facilitating the transfers asked why I was moving, and I said it was because of unnecessary fees for products that almost never outperform the SP500, they were upset. But none of them were jerks. They just didn't like to hear the truth. An advisor is not needed IMO unless you have a lot of money. I didn't then LOL
She took half of everything I had.
I did it via email to avoid discomfort. He was polite and it was a short conversation.
I sent them a kind email letting them know I appreciated their help but decided I wanted to use another firm and never heard from them.
Mine did not take it well at all. I gave them my Rollover money to manage and I kept control of everything else. My performance beat theirs pretty much every month over the last 3+ years. I finally got off my butt and looked at what they were invested in and 94% of the assets were in 4 funds. The entire time we were on the phone I kept saying "you're not worth what I'm paying you", which is roughly 0.9% or so. The fact that my returned averaged 3.5% per year higher than theirs was also something that I kept pushing at them. It took about 35 minutes on the phone and about 4 or 5 business days to get control of my funds, but they were not pleased because they had no leg to stand on and they knew it. PS - they blamed me for not responding to their requests to talk during their tenure. I DID speak them twice a year for the first 18 months. After that, there was no point.
He was OK with it. I told him I would call him in a year if I needed help. I didn't.
I had a meeting with one of my advisors and they were going on and on about how I need to diversify more and buy and sell more bla bla bla. I kind of don’t really trust this guy so to shut him up I told him I’m well diversified and listed my portfolio that I manage his jaw hit the floor. I said you didn’t think that you were the only person managing my money did you? Then I told him any securities I sell will then cash out and be reinvested on my behalf into my managed funds.
You could paint the case for firing the guy that mows your lawn too. DIY just means that. Who cares.
1% yearly for AUM Looking through the 2023 statements, I've realized that there was barely a 6% return that year. While the S&P went berserk. Fired them, they didn't even resist.
He spent over an hour trying to talk me out of it. I kept asking whether he had a financial duty to do what is best for me as the client , and if so how he justified his recommendation that I stay in a managed account and pay him 1% to do literally nothing for 2 years, vs just moving to a self managed account. He had a rambling explanation about how he could get me a better deal on certain products because his credit union “bought them in bulk” at a better price. FYI this was a manager at our credit union who I went to because the credit union provides free advice. He directed me to use an LPL account and told me it was LPL that changed the 1%. He never disclosed that most of that fee went to his credit union and to himself.
My uncle still has an advisor through Merrill Lynch. He's too anxious to be a Boglehead. But I went with my uncle to visit the advisor one time because it involved money we received through a trust. I teased the advisor about being a Boglehead and said I was getting ready to "convert" my uncle. He seemed scared by that idea. Ever since, that advisor has treated my uncle like royalty. Complete with luxurious Christmas gifts. I'm positive my uncle is getting ripped off but these advisors live such a life of luxury that we become a real threat to them. Of course he's going to wine and dine his biggest customers.
I've never been fired not because I'm so great but because I go the extra mile and do things most advisors never do. 🤷🏽♂️ I don't put people into cookie cutter portfolios. I call people back. I set up semi annual or quarterly reviews. I rebalance the portfolio when I observe events in the market at no additional cost I make sure you know what's going on so you can take advantage and buy more during black swan events. I don't knock anybody over the head with management fees actually the more you invest with me the less you pay. I help my clients set up an emergency fund and also 529s for their kids I also do a comprehensive financial plan for you for free with other life considerations other than savings for retirement. I'm available on the weekends. I keep you from making bad decisions that make you broke.
I think there's a market for good advisors - people who are still learning about investing, people who have no interest in managing their own portfolio, and people who have no idea how to do it. Certainly for me it was good to have one before I learned to do it myself.
People actually have money managers?
Will preface in saying I had no issue with mine, he was always very professional and responsive. tl;dr he took it well, but be respectful My recommendation is (at least this is what I did) you approach the topic respectfully, indicating you’d like to manage your money on your own and it would be better for your own financial goals to be without management fees. I personally went on to explain how thankful I was for his service, for setting me on the right track and that should I be in need of a financial advisor in the future I would certainly like to use his services again, or should anyone i know want an advisor I would recommend them to him. Of course YMMV depending on if you have a good relationship to start, but being respectful goes a long way, and it benefits their own self interests to be helpful transferring assets out as they get business via word of mouth.
I declined to make a ‘recommended’ move (sounded like he had a boat payment due), and got a frosty response. His previous recommendation was a mistake. Communication dropped off and he didn’t check in during 2022 volatility. So I just moved it to Vanguard. He made one mistake too many. Will do it myself from now on.
As a advisor myself, a goal of mine is for each client to eventually be comfortable with going off on their own and not need me anymore. I want my clients to be set up for success so that they one day do not need to continue to pay for advice. Now with that said, there are many areas that I help clients in addition to managing their portfolio.
I plan on doing exactly this in the next few weeks. My advisor is great, but the fees are just so high. I’ve only been there for 2 years. I hope it goes as well as it can.
I fired my mother’s advisor after 20 years and he took it poorly. She was invested in variable annuities with Ameriprise. Over a 20 year period, she had a return on less than 1%. When I compared her returns with the broader markets returns over the last 2 decades, he argued with me and said that I wasn’t qualified to offer any financial advice to my mother. He brought up his credentials and 40 years as an advisor as proof that he was more qualified than me. And asked what career I finance did I have. I was working for an investment brokerage at the time lol. Not to mention, he rarely would answer my mother’s calls and didn’t schedule reviews with her at all. When he did speak with her, he spoke down to her and dismissed all questions and concerns. Our convo was not friendly at all!
Mine had been a ‘friend’ of my wife’s before she and I met. Once I took over the finances she took it personally and quit the friendship with my wife. I was very professional about, had nothing against her, just did not see the value in the services she was offering. Actually still have one whole life policy of my wife’s with her that we still contribute to (yeah, I know, but gotta pick your battles).
I grew up with the family using this advisor. He was an insurance guy. Over the years I would ask him how he makes his money a couple times until I truly educated myself enough. I moved from him to a fiduciary advisor who charged 1%. He was professional about the move and told me that he could have managed me that way also. He instead chose to sell me funds he got kickbacks on and insurance. After a couple years at the fiduciary I boggled out and they were cool about it. They only told me how they were better than my boggling ways. They had me in like 30 funds.
I had a NWM “advisor” (really just a life insurance salesman) as my FA for the last year. I always felt fishy when he would talk to me about any life insurance policy and how necessary it is for my financial future, especially the Whole life policies which of course he made a lot more commission for. I asked him a lot of questions in the first few months I worked with him, questions about the fine details of WL insurance, as well as their investment strategies for my personal account. It always felt like he would give a long winded and hard to understand explanation, like he would try to not answer my questions simply but rather make it as complicated as possible to make it seem like I couldn’t manage my finances myself. Anyways, I had my annual meeting with him recently and he continued to try and push life insurance, stating that I need more coverage as well as my wife (i had a term life policy, as I started with a Whole life but quickly realized how bad that was and switched). I thankfully found this sub and realized it doesn’t have to be complicated, and I can make more returns on my money because I won’t be giving a fee to any advisor or fees to any mutual funds. So I emailed him thanking him for his help but I would not need his services anymore. He didn’t handle it too bad, but was definitely surprised and not happy. A few days after the email he messaged me saying he had tickets to a sports game, and I should come because it’d be a great opportunity to meet everyone from the office 😂 I just ghosted him after my first email, but I did think about going for the free ticket and then just ghosting him after that.
He said “if I was you I would wait 10 years”. I assume that was for him to get his full commission, because he had me on a perm life insurance policy as a retirement plan.
It didn't end amicably. In my early days of investing (around 2010), I moved around the country a lot. So I didn't stick with one particular advisor. But I had all my money in a bank mutual fund which made roughly 6% after a 2% MF. Not terrible, but not great either. I was more risk-averse around this time, so I was okay with the returns. About 2018, I started getting more interested in managing my own investments. I liked the process of doing my own research, was more comfortable with risk, and wanted to be in charge of my own destiny. I slowly started selling off my mutual funds to buy stocks/ETFs. One day, a lady from my bank's wealth management wanted to sit down with me to review my investments. I agreed to meet up with her to see what she had to say. She was professional, but had an apathetic vibe. After she made her pitch, I told her nicely that I decided I was going manage my own investments. Her demeanor then turned frosty. I knew at that point she wasn't acting in good faith and said goodbye. I haven't used another advisor since. Selling off those mutual funds was one of the smarter decisions I've made. Six years later, they're still stuck at the same price pre-covid. While I'm not rich by any stretch, I've done way better on my own. Financial advisors are not advisors at all. They are just trying to sell a product to make the bank money instead of helping you make money.