Please help advise on taking over my own investments

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Topic Author
nsf113
Posts: 14
Joined: Mon Jan 11, 2021 8:21 am

Please help advise on taking over my own investments

Post by nsf113 »

Hello. I am looking to potentially move my current holdings from my financial advisor and taking them over myself. I will post the details of my holdings below. I recently read a book by JL Collins called "the simple path to wealth" and this has inspired me to change the path of my investing. I am roughly 20 years from retirement and my plan is to follow the methods in the book and move my holdings into index funds. I am not an expert on this subject so please forgive me if I describe or list items improperly. What it boils down to is that I am tired of paying all the fees associated with my financial advisor and I don't feel I need to pay him to invest in log term index funds. I have tried to time the market in the past and this has only cost me money. Here are my details:


Emergency funds: roughly three months worth

Debt: I have zero debt

Tax Filing Status: Married

Tax Rate: depends on the year as I am self employed but typically 22%

State of Residence: MN

Age: 38

Desired Asset allocation: 90% index funds,10% bonds
Desired International allocation: potentially zero

Total portfolio value - $260,000

These are all held by Edward Jones

Taxable
Joint account #1 - 3% VTI - Van. total index (.03)
Joint account #2 - 12% even mix of VEU, VUG, VO, VOO (all Van. index funds) VB (roughly .05 average)

His SEP IRA - recently sold old holdings and went into VTI
8% - VTI (.03)

His Roth IRA - this needs to get invested ASAP
23% - cash

His IRA
3% - even mix of VEU, VXF, VOO, VTI, VUG (roughly .05 average)

Her 403b
16% - Invesco MSIGX (.85)

Her IRA
3% - split between VXF and VTI (.045)

Her Roth IRA
29% - even mix of VEU, VXF, VTI, VOO (roughly .05)

Additional taxable account started for my kids college - looking to potentially move this into a 529
3% - all GFACX American funds growth fund of America (1.39)

HSA at local bank (cash, not invested) - not included in total portfolio totals (balance is currently less than $5K).

We are not currently investing anything on a regular basis other than my Wife's 403b match - her employer matches $150 per month max so $300 total goes in every month to her 403b. We max out both Roth IRAs every year (timing varies on my sporadic paychecks) and I contribute sporadically when other funds are available (I am looking to get this more consistent and contribute more).

Hopefully this gives you a good idea of where I am at. I am really looking to simplify these accounts. I have been doing a lot of reading and it looks like a lot of you are using Fidelity. I have been self employed my whole life (20+ years) and I am used to doing the bulk of my own bookkeeping. I do have an accountant who is very knowledgeable and he has helped me a lot over the years. I guess I am looking for advice on account consolidation (where possible). I am also wondering if any of you know if Fidelity would reimburse me for account closing fees from my current broker (Edward Jones) should I transfer my funds out to handle on my own. Will Edward Jones release the information to Fidelity regarding my initial investments so that I would have an accurate cost basis moving forward? I know I am looking at $8,000 in capital gains if I sell the holdings in my taxable joint account. I would like to move this into a different low cost fund (possibly VTI or VOO) eventually. I also have questions about my Wife's 403b - if I transfer all accounts to fidelity are there any issues with that? If we get the account moved into fidelity can I sell the current holdings and invest in more low cost index funds? Wow! - that's a lot of information to take in. I sincerely thank you for reading and look forward to hearing your advice and opinions! Again, I apologize if I omitted anything important.
Last edited by nsf113 on Mon Jan 11, 2021 11:55 am, edited 1 time in total.
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JoeRetire
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Re: Please help advise on taking over my own investments

Post by JoeRetire »

nsf113 wrote: Mon Jan 11, 2021 11:27 amI am roughly 20 years from retirement and my plan is to follow the methods in the book and move my holdings into index funds. I am not an expert on this subject so please forgive me if I describe or list items improperly. What it boils down to is that I am tired of paying all the fees associated with my financial advisor and I don't feel I need to pay him to invest in log term index funds. I have tried to time the market in the past and this has only cost me money.
So you used to time the market, you aren't an expert, but you read a book that gives you confidence to manage your finances on your own rather than paying for advice.
Desired Asset allocation: I am not sure but thinking 90-95% index funds, 5-10% bonds
Desired International allocation: potentially zero
And you aren't really sure about your asset allocation or your international exposure. Does the book suggest zero for international? Or is there some other reason you feel this way?

It might make sense for you to give it a try for a few years and see how it goes. You can always change your mind later and decide to pay for help. If you do, you may wish to find someone other than Edward Jones.

Good luck.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
Topic Author
nsf113
Posts: 14
Joined: Mon Jan 11, 2021 8:21 am

Re: Please help advise on taking over my own investments

Post by nsf113 »

JoeRetire wrote: Mon Jan 11, 2021 11:33 am
nsf113 wrote: Mon Jan 11, 2021 11:27 amI am roughly 20 years from retirement and my plan is to follow the methods in the book and move my holdings into index funds. I am not an expert on this subject so please forgive me if I describe or list items improperly. What it boils down to is that I am tired of paying all the fees associated with my financial advisor and I don't feel I need to pay him to invest in log term index funds. I have tried to time the market in the past and this has only cost me money.
So you used to time the market, you aren't an expert, but you read a book that gives you confidence to manage your finances on your own rather than paying for advice.
Desired Asset allocation: I am not sure but thinking 90-95% index funds, 5-10% bonds
Desired International allocation: potentially zero
And you aren't really sure about your asset allocation or your international exposure. Does the book suggest zero for international? Or is there some other reason you feel this way?

It might make sense for you to give it a try for a few years and see how it goes. You can always change your mind later and decide to pay for help. If you do, you may wish to find someone other than Edward Jones.

Good luck.
Thanks for taking the time to respond. Yes, I am not an expert in investing but I am not satisfied with the advice gained from using a financial advisor. Maybe it is a dumb thing to do to take over my investments but I feel it is something I want to potentially try. That is why I am here.

In the JL Collins book he does not feel it is necessary to hold any international stock because many of the companies that make up the index funds are international companies - at least that is my understanding.
Jack FFR1846
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Re: Please help advise on taking over my own investments

Post by Jack FFR1846 »

Jack Bogle also did not believe holding separate international was necessary. I sort of agree and some time ago, simply froze my international. I still have it but don't add to it. After hearing both Jack and Collins, I thought to myself....."What company exists that does not have any international exposure?". I could not think of any. So I agree with both of them.

I asked myself a similar question years before when I was considering getting into REITs. "What company has no real estate exposure?". Crickets. So I have never invested in REITs.
Bogle: Smart Beta is stupid
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retired@50
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Re: Please help advise on taking over my own investments

Post by retired@50 »

I agree with the idea of getting away from Edward Jones.

When moving accounts, the typical procedure is to work with the financial institution that you're moving to. In your example, Fidelity. Contact Fidelity and let them know what you currently have at EJ, then, they should be able to talk you through the procedure to transfer assets. You may be able to move the HSA account as well.

Using low-expense ratio, broadly diversified stock and bond index funds is the main point that you shouldn't let go of. Don't get any fancy ideas about moving into or out of certain parts of the market, or about some upcoming event. Preventing your own worst tendencies from seeping into your portfolio is important, especially since you've tried this in the past. Once you admit to yourself that you really don't know which way the market will move next, you can rest easier. If using an all-in-one fund like a target date retirement index fund will help you sleep easier, and help you avoid tinkering, then by all means, do that.

Regards,
This is one person's opinion. Nothing more.
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GerryL
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Re: Please help advise on taking over my own investments

Post by GerryL »

OP,
Highly recommended: Get yourself a copy of Bogleheads' Guide to Investing. Seriously.
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beernutz
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Re: Please help advise on taking over my own investments

Post by beernutz »

I went from using a managed taxable Schwab account for 14 years to managing it myself in February 2020. One problem with the Schwab managed account besides the management fee was that they kept 5% of my assets in cash, earning essentially nothing and definitely losing out to inflation.

Comparing the market values of the funds I'm in now to the current values of the funds I was in when I ended the managed relationship I'm up over $50k in less than a year by making the switch to self management.

That's not an apples to apples because the risk level I selected for my managed account had about a 65/35 AA and my current AA for those funds is 100/0 because I have all my fixed income funds in a separate Schwab account that wasn't managed.

However, in the managed account I was in many funds had very high expense ratios. Nine of the 15 managed mutual funds I was in had ERs > .8% and 3 had ERs greater than 1%. Those are all gone replaced by index mutual funds where the highest ER is .05%.
Last edited by beernutz on Mon Jan 11, 2021 2:07 pm, edited 3 times in total.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. --Will Rogers
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elcadarj
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Re: Please help advise on taking over my own investments

Post by elcadarj »

nsf113 wrote: Mon Jan 11, 2021 11:27 am I am really looking to simplify these accounts. I have been doing a lot of reading and it looks like a lot of you are using Fidelity.
Fidelity is a good choice, Schwab as well for your situation because you could benefit from their brick and mortar locations. I suggest that you print out all of your latest statements from each account, go to one of their locations and have them set up a parallel account for each of your his and her IRAs, ROTH IRAs, HSAs and your brokerage accounts. And then have them help you set up the transfers from EJ in-kind. Then you can move towards your preferred asset allocation and simplified portfolio. You could also roll the His IRA and SEP-IRA into a solo 401k at either location to further simplify.

Edited to add: make sure to tell the Fidelity or Schwab reps you want to be self-directed to avoid their up-sell pitches.
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Re: Please help advise on taking over my own investments

Post by pkcrafter »

Welcome to the Bogleheads forum,
nsf113 wrote: Mon Jan 11, 2021 11:27 am Hello. I am looking to potentially move my current holdings from my financial advisor and taking them over myself. I will post the details of my holdings below. I recently read a book by JL Collins called "the simple path to wealth" and this has inspired me to change the path of my investing. I am roughly 20 years from retirement and my plan is to follow the methods in the book and move my holdings into index funds. I am not an expert on this subject so please forgive me if I describe or list items improperly. What it boils down to is that I am tired of paying all the fees associated with my financial advisor and I don't feel I need to pay him to invest in log term index funds. I have tried to time the market in the past and this has only cost me money. Here are my details:

You are making the right decision. Edward Jones is an expensive and unnecessary way to invest, and you've learned that timing doesn't work!


Emergency funds: roughly three months worth

Debt: I have zero debt

Tax Filing Status: Married

Tax Rate: depends on the year as I am self employed but typically 22%

State of Residence: MN

Age: 38

Desired Asset allocation: 90% index funds,10% bonds

90/10 is a very aggressive allocation. You can try it if you want, but I would recommend 70/30.

Desired International allocation: potentially zero

Collins does not recommend international, but you currently hold some international. It's a personal choice, but I suggest 20-30% international simply because it's a major equity class.


Total portfolio value - $260,000

These are all held by Edward Jones

Taxable
Joint account #1 - 3% VTI - Van. total index (.03)
Joint account #2 - 12% even mix of VEU, VUG, VO, VOO (all Van. index funds) VB (roughly .05 average)

His SEP IRA - recently sold old holdings and went into VTI
8% - VTI (.03)

His Roth IRA - this needs to get invested ASAP
23% - cash

His IRA
3% - even mix of VEU, VXF, VOO, VTI, VUG (roughly .05 average)

Her 403b
16% - Invesco MSIGX (.85)

What other useful funds are available in her 403B?

Her IRA
3% - split between VXF and VTI (.045)

Her Roth IRA
29% - even mix of VEU, VXF, VTI, VOO (roughly .05)

Additional taxable account started for my kids college - looking to potentially move this into a 529
3% - all GFACX American funds growth fund of America (1.39)

HSA at local bank (cash, not invested) - not included in total portfolio totals (balance is currently less than $5K).

Can't really tell what your overall portfolio allocations are. Think of all accounts as parts of one portfolio. That will give you a clearer picture of what you hold, avoids duplication, and it makes it easier to manage.

We are not currently investing anything on a regular basis other than my Wife's 403b match - her employer matches $150 per month max so $300 total goes in every month to her 403b. We max out both Roth IRAs every year (timing varies on my sporadic paychecks) and I contribute sporadically when other funds are available (I am looking to get this more consistent and contribute more).

Good move. Invest on a regular basis. I think you are a bit behind for your age. You should target 10% minimum to monthly investments.

Hopefully this gives you a good idea of where I am at. I am really looking to simplify these accounts. I have been doing a lot of reading and it looks like a lot of you are using Fidelity. I have been self employed my whole life (20+ years) and I am used to doing the bulk of my own bookkeeping. I do have an accountant who is very knowledgeable and he has helped me a lot over the years. I guess I am looking for advice on account consolidation (where possible).

The three fund portfolio:

viewtopic.php?f=10&t=88005

Getting Started

https://www.bogleheads.org/wiki/Getting_started

Again, all retirement holdings are parts of a single retirement portfolio. Emergency funds and money for other goals are not part of the retirement portfolio.


I am also wondering if any of you know if Fidelity would reimburse me for account closing fees from my current broker (Edward Jones) should I transfer my funds out to handle on my own. Will Edward Jones release the information to Fidelity regarding my initial investments so that I would have an accurate cost basis moving forward? I know I am looking at $8,000 in capital gains if I sell the holdings in my taxable joint account. I would like to move this into a different low cost fund (possibly VTI or VOO) eventually. I also have questions about my Wife's 403b - if I transfer all accounts to fidelity are there any issues with that? If we get the account moved into fidelity can I sell the current holdings and invest in more low cost index funds? Wow! - that's a lot of information to take in. I sincerely thank you for reading and look forward to hearing your advice and opinions! Again, I apologize if I omitted anything important.
Lots of questions here...

#1 Get out of EJ.

When you do a transfer to another custodian, you want to initiate it with the receiving company by doing a custodian to custodian transfer. The new company will pull the funds. You have to make sure the new company carries the funds you're transferring or they won't go. You can also transfer everything to cash and transfer it that way.


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
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bertilak
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Re: Please help advise on taking over my own investments

Post by bertilak »

If you keep it simple (e.g. the Three Fund Portfolio) then you can do it all yourself.

Note that simplicity is not a tradeoff just to make your life easier. The best performing portfolios are inherently simple. It is a fortunate bonus that simple portfolios are easier to manage.

Complicated technique for improving expected return rely on adding risk. A simple portfolio adds risk by (simply) increasing the stock-to-bond ratio,
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
Cruise
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Re: Please help advise on taking over my own investments

Post by Cruise »

OP: When I made the same decision that you are contemplating, I opened up a Fidelity account and had them transfer my holdings to them. It was interesting that my pre-Fidelity financial advisor no longer seemed to be my "friend" after this action on my part. Never looked back and happy that I took what knowledge I gained from the financial and applied it using index funds held by Fidelity.
Mr.BB
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Re: Please help advise on taking over my own investments

Post by Mr.BB »

If you choose another brokerage firm for your accounts make sure that you make copies of all your statements(past and current) as well as any other online documents that are available to you. Many people here who have switched from EJ found that once they have requested that their funds be transferred to another firm they get locked out of their own accounts at EJ.
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Topic Author
nsf113
Posts: 14
Joined: Mon Jan 11, 2021 8:21 am

Re: Please help advise on taking over my own investments

Post by nsf113 »

Thank you to everyone who has responded so far. I appreciate the advice.
Topic Author
nsf113
Posts: 14
Joined: Mon Jan 11, 2021 8:21 am

Re: Please help advise on taking over my own investments

Post by nsf113 »

pkcrafter wrote: Mon Jan 11, 2021 2:03 pm Welcome to the Bogleheads forum,
nsf113 wrote: Mon Jan 11, 2021 11:27 am Hello. I am looking to potentially move my current holdings from my financial advisor and taking them over myself. I will post the details of my holdings below. I recently read a book by JL Collins called "the simple path to wealth" and this has inspired me to change the path of my investing. I am roughly 20 years from retirement and my plan is to follow the methods in the book and move my holdings into index funds. I am not an expert on this subject so please forgive me if I describe or list items improperly. What it boils down to is that I am tired of paying all the fees associated with my financial advisor and I don't feel I need to pay him to invest in log term index funds. I have tried to time the market in the past and this has only cost me money. Here are my details:

You are making the right decision. Edward Jones is an expensive and unnecessary way to invest, and you've learned that timing doesn't work!


Emergency funds: roughly three months worth

Debt: I have zero debt

Tax Filing Status: Married

Tax Rate: depends on the year as I am self employed but typically 22%

State of Residence: MN

Age: 38

Desired Asset allocation: 90% index funds,10% bonds

90/10 is a very aggressive allocation. You can try it if you want, but I would recommend 70/30.

Desired International allocation: potentially zero

Collins does not recommend international, but you currently hold some international. It's a personal choice, but I suggest 20-30% international simply because it's a major equity class.


Total portfolio value - $260,000

These are all held by Edward Jones

Taxable
Joint account #1 - 3% VTI - Van. total index (.03)
Joint account #2 - 12% even mix of VEU, VUG, VO, VOO (all Van. index funds) VB (roughly .05 average)

His SEP IRA - recently sold old holdings and went into VTI
8% - VTI (.03)

His Roth IRA - this needs to get invested ASAP
23% - cash

His IRA
3% - even mix of VEU, VXF, VOO, VTI, VUG (roughly .05 average)

Her 403b
16% - Invesco MSIGX (.85)

What other useful funds are available in her 403B?

Her IRA
3% - split between VXF and VTI (.045)

Her Roth IRA
29% - even mix of VEU, VXF, VTI, VOO (roughly .05)

Additional taxable account started for my kids college - looking to potentially move this into a 529
3% - all GFACX American funds growth fund of America (1.39)

HSA at local bank (cash, not invested) - not included in total portfolio totals (balance is currently less than $5K).

Can't really tell what your overall portfolio allocations are. Think of all accounts as parts of one portfolio. That will give you a clearer picture of what you hold, avoids duplication, and it makes it easier to manage.

We are not currently investing anything on a regular basis other than my Wife's 403b match - her employer matches $150 per month max so $300 total goes in every month to her 403b. We max out both Roth IRAs every year (timing varies on my sporadic paychecks) and I contribute sporadically when other funds are available (I am looking to get this more consistent and contribute more).

Good move. Invest on a regular basis. I think you are a bit behind for your age. You should target 10% minimum to monthly investments.

Hopefully this gives you a good idea of where I am at. I am really looking to simplify these accounts. I have been doing a lot of reading and it looks like a lot of you are using Fidelity. I have been self employed my whole life (20+ years) and I am used to doing the bulk of my own bookkeeping. I do have an accountant who is very knowledgeable and he has helped me a lot over the years. I guess I am looking for advice on account consolidation (where possible).

The three fund portfolio:

viewtopic.php?f=10&t=88005

Getting Started

https://www.bogleheads.org/wiki/Getting_started

Again, all retirement holdings are parts of a single retirement portfolio. Emergency funds and money for other goals are not part of the retirement portfolio.


I am also wondering if any of you know if Fidelity would reimburse me for account closing fees from my current broker (Edward Jones) should I transfer my funds out to handle on my own. Will Edward Jones release the information to Fidelity regarding my initial investments so that I would have an accurate cost basis moving forward? I know I am looking at $8,000 in capital gains if I sell the holdings in my taxable joint account. I would like to move this into a different low cost fund (possibly VTI or VOO) eventually. I also have questions about my Wife's 403b - if I transfer all accounts to fidelity are there any issues with that? If we get the account moved into fidelity can I sell the current holdings and invest in more low cost index funds? Wow! - that's a lot of information to take in. I sincerely thank you for reading and look forward to hearing your advice and opinions! Again, I apologize if I omitted anything important.
Lots of questions here...

#1 Get out of EJ.

When you do a transfer to another custodian, you want to initiate it with the receiving company by doing a custodian to custodian transfer. The new company will pull the funds. You have to make sure the new company carries the funds you're transferring or they won't go. You can also transfer everything to cash and transfer it that way.


Paul
Thank you for the reply Paul. I am really in the dark regarding my wife's 403b. I need to do more research on which funds are available. The account is through invesco and I really have not done a thing with it since the account started. It doesn't sound like I can move it to Fidelity unless she changes jobs. I would definitely like to get it into a lower cost fund. Vanguard was listed as one of the companies that can hold her 403b but, like I said, I need to gather more information on this.
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