How to Leave Your Investment Advisor (It's Easier Than You Think)
ฝัง
- เผยแพร่เมื่อ 12 มิ.ย. 2022
- I've received countless emails from viewers sharing horror stories about their investment advisor. One viewer shared that his advisor had him in a complex 24-fund portfolio!
Here's an email from a viewer named Dan:
"I have a financial advisor at Edward Jones who has most of my retirement investments, I've rolled over all my 401ks to IRAs with her, about $500k worth now. She has me in a bunch of managed mutual funds. I would like to move everything to low cost ETFs like VTI. Does it make sense to move everything or does the cost of conversion typically outweigh the benefits? Should let those ride and put all my future investments in low cost index funds?"
In today's video I'll walk though how to move your investments away from your investment advisor. We'll look at some things you should consider, along with where to move your investments and some ideas on how to invest your money.
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ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (amzn.to/3by10EE)
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.
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Your calm, pleasant manner is very appreciated when discussing something as potentially stressful as financial issues, (especially these days).
In December of 2020, I left my Edward Jones advisor and went all-in with Vanguard. I was fed up with not knowing what I was paying for fees and tired of my advisor just trying to sell me her insurance products. I choose Vanguard because that is where my 401K is at. Could not be happier with my decision and am willing to bet I am paying about 1/4 of the fees that Edward Jones and no front-loaded funds with Vanguard.
I only know three people who invest with Edward Jones - that would be my doctor and my lawyer (they referred me - to which I said "not a chance" to the 1.75% fee) and my friend. My friend's nephew manages her account and she seems perfectly happy but what does she know lol.
If financial advisors knew what they were doing they would be on a beach instead of stealing 1% of your money every year
That’s right!
Fees & diversification is everything. It's hard enough to save for your own retirement, without saving for your advisor's retirement as well.
LOL. So true!
So true. And our advisor had 15k in cash over 4 accounts to cover his fees. Mutual funds if you are paying an advisor why are you paying double. He make you account a etf.
There is brilliance in simplicity... thank you for another great video!
Thanks to your videos, I terminated my Roth IRA advisor last week. I gave them a call to discuss fees, self management, termination, etc. They were investing in roughly 15 etfs, but at the end of the day it was just a 3 fund portfolio with various overweights. I can do that myself without an annual 1.65% fee. They were super professional ("it's your money. You can do whatever you want.") I am in process of transfering to M1 which was as simple as clicking the transfer button on their website. No advisor termination fee. No outgoing transfer fee with Fidelity. Roth is nontaxable so should be as easy as autobuy. The only question is that the advisor had me at ~20% cash, and it's so tempting to want to time reentry. Not sure whether to dca or lump sum invest at this point
My mother and late father fell into a couple of expensive advisors. My dad was a very smart guy (even held a patent) but he never made the time or interest to learn about investing. I help my mom with her finances now and have met with her "advisor" a few times and it just makes me shake my head.
Great video Rob! Those managed advsior fees are really something to consider.
Having an advisor is good for one thing: keeping you from doing something stupid. When you manage your own funds, you can still get emotional and do the wrong thing. Everyone is a "long term investor" until the market crashes. Panic selling emotions set in. A decent advisor can keep you from doing that.
IF you are one of the few who can keep his/her head in troubled times, you don't need help.
Correct.
I completely agree with this but would add something else to consider and that is the planning portion and not just the portfolio allocation part. I just don't understand why if you just need the planning part, you have to go with an advisor to also manage the assets/allocation - is it possible to just pay for the planning portion and get away from these vampire advisors wanting to take a cut of all assets under management?
@@alanvonweltin6820 you can pay a fee only advisor just for planning but the asset management is going to be trash or non-existent. AUM means the advisor has skin in the game aka wins when your account goes up and loses when it goes down. Fee only doesn’t care either way because they are getting paid no matter what
@@alanvonweltin6820 seriously! Since they just buy and hold if it's an index fund and never look back.
Left my advisor (1% AUM) about 6 months ago. LPL (custodian) charged closing fees, several hundred dollars, on each of my 6 existing accounts. Called my advisor and had fees reversed, not sure if he paid them or had them canceled. We did tell him if I were to pass, wife would bring funds back because she doesn’t want do deal with finances. We chose E*Trade to hold our funds and they offered a $6;000 bonus to move to them. Sweep of funds is still ongoing and waiting for promised bonus payment. BTW, funds stayed the same, next task is to go to the 4-fund portfolio.
I'm very happy with my advisors at Personal Capital.
My Grandma lost almost $40,000 with a financial advisor from Wells Fargo in the early 2000s. Found out the young kid kept churning her money between four risky mutual funds. She never received any payback from the lawsuit. Only the millionaires got their money back.
Vanguard… low fees personal select advisor is the way to go!
I'm sure but if one has less than $500K you are assigned "personal advisor" which was in my case sloppy decisions and "on the job" training for newbie.
When I left EJ I literally just called Fidelity and they did everything for me.
I am thinking of leaving Schwab for EJ. The more I read and hear, the more I think that may not be the best idea.
@@edrylant2681 It's a terrible idea. The fees are ridiculous compared to what you could get just using something like Vanguard PAS.
Do not use EJ, fees are terrible and they invest in funds you can not move to other accounts.
Layering fees advisors love.
I pulled out Jan 5 of this year.
You need to be convinced you want to. I had “you’ve made 11% per year” which was true.
I just said nicely, and with a smile: “I want everything cashed out today, and sent a check. Thanks very much.” “What about the IRA?” “That too, I’ll take care of it”
You have I believe 60 days to roll it into another IRA. I will have to pay Capital gains on the taxable acct, but am over $50k ahead than if I had not. And since I retired this year, those Capital gains will be minimized.
I went through this about 5 years ago. I did have a few mutual funds in a taxable account with decent gains. I was able to exchange them for low cost index funds when the market was down during COVID-19 through tax lost harvesting. Before COVID-19 I was selling small amounts to reduce the overall tax consequences.
Just the idea that it's normalized for someone to take 1% of your wealth annually while adding (in most cases) no value seems criminal. All the information required is free and publicly available. There are a huge number of incredibly safe, diversified investment vehicles with *extremely* low fees, which over any given 12 year period have *never* lost value. And in this new world all your assets are visible and manageable under one pane of glass. It's crazy.
I been with a Edward Jones advisor about 8 years. a few months ago. I was in the office for my yearly. My advisor had another advisor in the meeting with us. I was told that the other guy will be my full-time advisor from now on. I wasn't happy about the change. Being the new guy hadn't been an advisor very long. I don't have a lot of money there. But it's a lot to me. I know I pay a lot in fees. And I'm not comfortable talking with my new advisor about anything. I would like to move away from Edward Jones completely. Who could I talk to about this? I been retired for 6 years.
You better talk to someone fast. They've probably assigned you an advisor that's getting "on the job" training on your account. Keep watching Rob's videos and IMO you can't go wrong with Vanguard Personal Advisors if you have enough $$$ to qualify but you must take an active role in your retirement! Learned the hard way!
I asked this question on your last video but i think you missed it. Considering 3 total market index funds or etfs, the price per share are veru different depending on which brokerage firm you use. Is there any reason why I should buy the more expensive one over a cheaper one? I don't know if this makes sense. Maybe i can give more info in the live tonight if this doesn't make sense. Thank you
People thinking of these fees as “1%” time to change your thinking….
If you went up 10% and you have a 1%fee then you have them 10% of your gains… when you lose money, you still pay the 1%. Suppose you made no money the next year you would lose 10% of last years gains while still assuming you made 10% the previous year. Making your 10% gain now an 8% gain which is 20% of your money gained
My advisor is excellent. Last year instead of losing 20% I was down only 4%.
And if it was under the mattress you would have done 4% better and saved the fees.
If I start a transfer now (12/5/23) and the long and short term capital gains are distributed after the transfer completes will there be any impact to those gains? In other words, will the gains and dividends of those transferred accounts keep depositing as if nothing happened? Or will they be sitting at the old brokerage and have to be transferred separately?
Hello Rob, thanks for your videos, I am a new subscriber and 've been learning a lot from your channel, so thanks again. Not sure if you have experience in the following topic but if you do, could you talk about it at some time, which is if I decided to retire in another country, what would be the impact on my IRA/ 401k., and what would be the options in this case. Regards!
I'm actually having Mark Zoril on the show live Wednesday at 8 am ET to answer these types of questions.
I habe been bombarded by calls from financial advisors. Mostly because i asked them a question that i couldn't get answered through your videos so i was asking the same questions in forums.
Medallion signature guarantee stamps can be a nightmare when transferring securities. Also, trusts accounts can have different titles (parents passing...) complicating the transfer. I am living through this now and its real.
Medallion Signatures are a pain in the a_s, for sure!
Hi Rob. Excellent information. Can you suggest any hourly advisors for checking portfolio allocation rather than hiring an advisor and have AUM fees.
My advisor has lost $45k for me in risky REIT investment. I want to move my money but not sure how to move or where to move annuities? Not sure if I can transfer an annuity?
I am already retired and over 71. I am receiving my 4% but I wonder if I could still leave my investment advisor.
I’m in the middle of moving my taxable account from JPM to fidelity. Do you recommend move the investments in a down period like now or wait to recover/minimize losses?
Don’t forget, I believe you may have to pay capital gains.
How can I leave my insurance broker advisor
How can I invest money for my children who are over 21 yrs old so they can not withdraw the money for 10 to 20 years & benefit from compounding interest to purchase a home or help in providing their future needs?
It’s easy to leave your advisor. Most don’t even know you’ve gone. Less than 1,000,000 of assets under management? This includes those on the Baron’s top 100 list.
Is that a iqunix f96? Excellent choice
Yes it is.
I don't think I could ever get away from my Fidelity managed account (taxable). A few years back they talked me into putting a portion of my portfolio into their (about 45%) into a tax managed SMA. Now I have somewhere between 100 to 200 individual stocks plus some "core funds"
same here. HUNDREDS of positions in my fidelity managed account.
I wish someone had some suggestions for this situation@@Sahunt1958
Hi Rob, I recently found your channel and I've been posting on various videos. I ceased Vanguard's personal advisor services more than a year ago and my IRA and taxable account are still sitting in self-managed status at Vanguard. I am frantic trying to decide what to do since I'm not happy with the allocation of the IRA (80% bonds) and totally uncertain about the ratio of international market exposure. I would love to email you my story.
A 1% fee for combined financial planning and investment management is a great benefit.
I have no idea how all the 1% advisors convince so many people to give them money. They must be much better at self-promotion than money managing. I interviewed several and never found one that would give me performance data on their existing clients (eg. Did they beat the market?). Considering how hard it is to work and get enough money to invest it is well worth figuring out how to invest yourself. 1% may sound like a small amount of money, but when you consider taxes and inflation and the fact that you can really only afford to take out 4% a year. The 1% accounts for about 25% of your spendable money. The 1% is not too painful if the market is up, but you still need to pay it on the way down. Rob Berger does a great job.
Why private the last video?
I'll explain on tonight's live Q&A in more detail, but I learned that the fund I was talking about is not generally available. I didn't want the video to confuse folks.
@@rob_berger gotcha! Thanks for the reply
@@rob_berger Rob can u get the volume up? it's hard hearing you. Thanks, Joy
Fifty ways to leave your lover.
Im turning 59 this week and looking to retire at 62. Im currently invested through Empower with my companies 401k. I have a 4 fund portfolio which consist of s&p 500/International/Large cap and 10% in bonds. Thank you for your help! I have thought about moving my 401k money once i turn 59 1/2 which is in September of this year but not sure where to move it or should i just leave it at Empower until i retire?
I have found fidelity and vanguard to be much more efficient then empower retirement.
I am glad I moved a 401k to fidelity.
NEVER FORGET . . . Brokerages charge commissions when you buy AND when you sell. In the case of Raymond James I think part of the money goes to the naming rights to the football stadium in Florida!?!?!?!?!?!? . . . You decide: Are they working for you???
Most of the large brokerages, including Fidelity, Schwab and TD Ameritrade, no longer charge commissions for buying or selling NYSE or NASDAQ stocks or ETFs.
@@jamesdarnell8568 Raymond James does.
leaving park avenue securities to fidelity charged $95 per account. long term I'm glad i left a lazy whole life insurance salesman and took control of my investments. I didn't keep the accounts there and only fire the advisor because the advisor was the only one with the ability to make changes.
Call Fidelity and ask to refund the $95. I did it with my 3 EJ accounts and 95 x 3 was returned very quickly.
Fee only advisor
If you have a Financial Advisor you were getting screwed
Everything has a cost. The question is, do you get the value from your cost? And are you comfortable investing in all market scenarios? Sounds like these advisors and commenters here are not getting value from their FA. As a CFP constantly monitoring the market, I know I’m brining ample value (on the fundamental as well as emotional side) to charge such a cost.
Not to mention connecting my clients with all their banking needs (Mortgage, Small Business Accounts, Heloc, savings/checking). As well as all estate planning needs (Trusts, probate, etc.)
Imho, there are a lot of advisors that are not worth thier fee, but top tier advisors (tycoailly require 2mil minimum) provide more than ample value.
I could see how “middle tier assets” of $250k-$2mil (no offense intended) get this same type of investment by FAs, but when talking about involving your taxes & estate. The value is there.