Schwab, Fidelity, or other Advisory Services Options for Sister

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
shavenyak
Posts: 61
Joined: Sun Dec 03, 2017 12:06 pm

Schwab, Fidelity, or other Advisory Services Options for Sister

Post by shavenyak »

My 66-year old sister and her late husband have had their investments handled by Wells Fargo Advisors for many years. Don't know if her husband even knew what they were paying the advisor. My sister didn't know...when I told her to ask, the response from the advisor was "2%. That's standard."

She has told me that she has about $600K in a bank account because some CDs have recently matured. I have no idea of the value of her stocks and bonds (or her asset allocation) with the Wells Fargo advisor but I'd guess it's around $1 million. She has little interest in investments but is very willing to listen to the idea that 2% is too much and move elsewhere for that reason. She says she would like to work with someone face-to-face, even for investing the $600k cash (so a Vanguard advisor at .3% wouldn't be a good possibility).

Since I'm not trying to push her toward anything, only make her aware of options (her husband died a year ago...she is ready to make some decisions), but haven't seen her investment specifics, my guess is that there might some upfront discussion trying to, e.g., untangle the tax implications of some of her long-held individual stocks (she has mentioned holding some blue chips for a long time) and simplify her Wells Fargo portfolio in a more Boglehead way. I have asked her to list her specifics on this forum but doesn't get what she is missing and declined.

I found a Schwab office reasonably close to her home in the Vista, CA area but am not familiar with their programs beyond what I just read (Schwab Intelligent Portfolios; Schwab Intelligent Portfolios Premium (One-time planning fee: $300 and monthly advisory fee: $30); Schwab Private Client (starts at 0.80%--$1 million minimum); Schwab Advisor Network (fees vary by advisor--$500,000 minimum). I also see that there's a Fidelity office a little further away, but after a quick glance at their offerings nothing jumps out at me. I am a VTI (stocks) and BND (bonds) 60/40 AA type of person through Etrade so I know little about the likes of Schwab and Fidelity. My guess is that my sister would be no more than 40% stocks, but that's not for me to decide.

i know there's much more to be considered re: her financial situation (she seems to have handled the age 65 transition and all that goes with it well, likely with help from the Wells Fargo advisor), but any input on Schwab's or Fidelity's advisory offerings or other possibilities where she might look to efficiently restructure her investments, reduce costs, and have someone to trust in related $ matters would be much appreciated.
desconhecido
Posts: 114
Joined: Sat May 08, 2021 10:46 pm

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by desconhecido »

I've been thinking about moving from Vanguard as it might become important in future years to have a local office and responsive representatives to deal with. From what I've been able to glean here and from looking over the Fidelity website, it looks as though a local Fidelity office may provide a decent solution at a reasonable cost. I'm not as close as you appear to be to having to make a decision so haven't actually contacted Fidelity, but plan to before too long. It might be worthwhile to get a local Fidelity rep on the phone and ask what they could offer as far as reasonable cost guidance. If the best solution is to help your sister into a BH type portfolio with just a few well-chosen investments, it would seem that the cost shouldn't be unreasonable -- particularly compared to the 2% (ouch!) that WF is extracting. I'd rather invest my money in a root canal than pay WF 2% for managing 1E6, and I don't need a root canal.
Jack FFR1846
Posts: 18461
Joined: Tue Dec 31, 2013 6:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by Jack FFR1846 »

Put this into numbers for your sister.

2% of a $1M portfolio is $20k every single year. If there are ERs to pay in addition, figure the slime balls are putting her into 1% funds, so $30k a year. Who knows....maybe she'd just throw that into the street.

If she went to Vanguard, even with PAS and they put her in 0.2% ER, that's 0.5% or $5k a year.

If she just simply bought target date funds at 0.15%, that's $1500.

If she did a low cost, 3 fund, she could easily be at 0.05% or $500.

I doubt she'll use my choices and be at 0.0165%, but I would certainly throw that number into the Wells CSB (certified slime ball) rep's face.
Bogle: Smart Beta is stupid
MattB
Posts: 1226
Joined: Fri May 28, 2021 12:27 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by MattB »

If there is a Schwab office close to her house I wouldn't hesitate to suggest transferring her assets to Schwab. I have accounts at Schwab, Vanguard, and Fidelity and find that Schwab has the best customer service between the three.
MattB
Posts: 1226
Joined: Fri May 28, 2021 12:27 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by MattB »

Deleted double post.
tomsense76
Posts: 1428
Joined: Wed Oct 14, 2020 1:52 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by tomsense76 »

Jack FFR1846 wrote: Fri Jul 30, 2021 2:56 pm Put this into numbers for your sister.

2% of a $1M portfolio is $20k every single year. If there are ERs to pay in addition, figure the slime balls are putting her into 1% funds, so $30k a year. Who knows....maybe she'd just throw that into the street.

If she went to Vanguard, even with PAS and they put her in 0.2% ER, that's 0.5% or $5k a year.

If she just simply bought target date funds at 0.15%, that's $1500.

If she did a low cost, 3 fund, she could easily be at 0.05% or $500.

I doubt she'll use my choices and be at 0.0165%, but I would certainly throw that number into the Wells CSB (certified slime ball) rep's face.
Yeah exactly. Or maybe one of the LifeStrategy funds
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
User avatar
retiredjg
Posts: 53989
Joined: Thu Jan 10, 2008 11:56 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by retiredjg »

The trouble with Fidelity and Schwab is their advisors have a financial incentive to put her in a high cost portfolio and/or sell her things she does not need. Of course, they don't all do that but you don't know what kind of advisor you have until the damage has happened.

Places like Raymond James, Edward Jones, and Ameriprise are the same but reported to be even worse at serving up a good low cost portfolio.

Unfortunately we have seen some very ugly high cost and tax-inefficient portfolios from all of these places.

For this reason, the only place I suggest (for an advisor) is Vanguard and that is because their advisors do not have a financial incentive to do these things. They are also very low cost. The trouble with Vanguard is that they are online/phone/video conference only and some older folks are not comfortable with this. And some people have reported that they do not have the best customer service around for the last several years.

If she wants your help and is willing to share some financial details, you two could go to either a Fidelity or Schwab office and invest her money in index funds - preferably a target or other all in one fund. Most have said that advisors at Fidelity or Schwab have been very cooperative if the "we want low cost and simple" portfolio guidelines are laid out firmly in advance.

Note that both Fido and Schwab have several different series of target funds. Let us know if you need help with that part. Look for target index funds only.
User avatar
retiredjg
Posts: 53989
Joined: Thu Jan 10, 2008 11:56 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by retiredjg »

PS. I didn't mean to imply she should get into an AUM situation with either Fido or Schwab. But their locals offices should assist the transfer even if it is not an advisory account.
User avatar
nedsaid
Posts: 19249
Joined: Fri Nov 23, 2012 11:33 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by nedsaid »

If your sister wants help, have a few options laid out for her. Keep in mind is that the default option for many people is simply to walk into a local Edward Jones office because they are local and they are everywhere. Ameriprise also has a lot of offices but are not as ubiquitous as Edward Jones. I call Edward Jones catnip for senior citizens, they just can't help themselves. These are pretty expensive but easy options.

Better options are Schwab and Fidelity, they both have an Advisor/Robot hybrid product where you can talk to a live person and have the robots manage the portfolio. With Schwab, you work with Certified Financial Planners, you pay $300 upfront and $30 a month. At Fidelity, you can do the Advisor/Robot thing for 0.50% a year. The robots at Fidelity use essentially zero cost index funds and Schwab uses low cost ETFs. A drawback here is that your advisor will change from time to time. A problem is dealing with the individual stocks with the large capital gains, not sure how these services would handle this.

As retiredjg said, Schwab and Fidelity will want to get you into more expensive advisory solutions but even then they would be a better option than Ameriprise and Edward Jones.

You can do the local advisor route, you will work with the same person and develop a relationship but it will be more expensive. Probably the cheapest Assets Under Management fee you could get with a local and independent advisor is 0.75% a year, if she had a very large portfolio it could be a bit less.

What I mean by an independent advisor is someone who does not have a sales manager above them. In big financial firms, the pressure to meet goals can be amazing. The advisors can be pressured to sell products not necessarily in the client's best interest. If you are looking for a local independent advisor, you also want someone who is a Fiduciary.
A fool and his money are good for business.
neowiser
Posts: 235
Joined: Sun Sep 27, 2020 4:32 pm

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by neowiser »

It’s important to find an advisor you trust and respect. The Schwab branch websites allow you to view profiles of each person so you can select someone based on their credentials if that is important to you. Fidelity is much more opaque, they don’t show the roster of advisors for each branch office on the website. You can search for an advisor based on your location, then go to LinkedIn to read more about them. It could be awkward to start with an advisor and then request to switch, so the more advanced vetting you can do the better.

The advisors will recommend managed funds but even those will have expense ratios far below 2%. It might be a good idea to establish a relationship with a Schwab or Fidelity advisor in addition to a fee only advisor or other fiduciary.
User avatar
Wiggums
Posts: 7027
Joined: Thu Jan 31, 2019 7:02 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by Wiggums »

The problem with good advisors is that they eventually switch jobs or get promoted to a different job. You received a lot of good suggestions.

Personally, I would put the money in a target fund, life strategy or balanced fund and be done with it. A very reasonable choice for one million to invest.
"I started with nothing and I still have most of it left."
backpacker61
Posts: 1608
Joined: Wed May 20, 2020 6:36 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by backpacker61 »

Wiggums wrote: Fri Jul 30, 2021 4:34 pm Personally, I would put the money in a target fund, life strategy or balanced fund and be done with it. A very reasonable choice for one million to invest.
+1
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
reln
Posts: 718
Joined: Fri Apr 19, 2019 4:01 pm

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by reln »

shavenyak wrote: Fri Jul 30, 2021 2:16 pm My 66-year old sister and her late husband have had their investments handled by Wells Fargo Advisors for many years. Don't know if her husband even knew what they were paying the advisor. My sister didn't know...when I told her to ask, the response from the advisor was "2%. That's standard."

She has told me that she has about $600K in a bank account because some CDs have recently matured. I have no idea of the value of her stocks and bonds (or her asset allocation) with the Wells Fargo advisor but I'd guess it's around $1 million. She has little interest in investments but is very willing to listen to the idea that 2% is too much and move elsewhere for that reason. She says she would like to work with someone face-to-face, even for investing the $600k cash (so a Vanguard advisor at .3% wouldn't be a good possibility).

Since I'm not trying to push her toward anything, only make her aware of options (her husband died a year ago...she is ready to make some decisions), but haven't seen her investment specifics, my guess is that there might some upfront discussion trying to, e.g., untangle the tax implications of some of her long-held individual stocks (she has mentioned holding some blue chips for a long time) and simplify her Wells Fargo portfolio in a more Boglehead way. I have asked her to list her specifics on this forum but doesn't get what she is missing and declined.

I found a Schwab office reasonably close to her home in the Vista, CA area but am not familiar with their programs beyond what I just read (Schwab Intelligent Portfolios; Schwab Intelligent Portfolios Premium (One-time planning fee: $300 and monthly advisory fee: $30); Schwab Private Client (starts at 0.80%--$1 million minimum); Schwab Advisor Network (fees vary by advisor--$500,000 minimum). I also see that there's a Fidelity office a little further away, but after a quick glance at their offerings nothing jumps out at me. I am a VTI (stocks) and BND (bonds) 60/40 AA type of person through Etrade so I know little about the likes of Schwab and Fidelity. My guess is that my sister would be no more than 40% stocks, but that's not for me to decide.

i know there's much more to be considered re: her financial situation (she seems to have handled the age 65 transition and all that goes with it well, likely with help from the Wells Fargo advisor), but any input on Schwab's or Fidelity's advisory offerings or other possibilities where she might look to efficiently restructure her investments, reduce costs, and have someone to trust in related $ matters would be much appreciated.
2% is too high.
nrkv
Posts: 247
Joined: Thu Jan 21, 2021 1:34 pm

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by nrkv »

1. Be careful who you get to work with at local Schwab office. As @wiggums mentioned above, good advisors leave or get promoted and not deal with customers anymore. Make use of the transparency Schwab provides of agent details online.
2. Not every financial consultant is a financial advisor.
3. I would pick someone that’s relatively close to your age. This might sound bad but it’s coming from my experience. The point is that when you are planning for or in retirement at least talk to someone who is planning for retirement.
User avatar
nedsaid
Posts: 19249
Joined: Fri Nov 23, 2012 11:33 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by nedsaid »

Wiggums wrote: Fri Jul 30, 2021 4:34 pm The problem with good advisors is that they eventually switch jobs or get promoted to a different job. You received a lot of good suggestions.

Personally, I would put the money in a target fund, life strategy or balanced fund and be done with it. A very reasonable choice for one million to invest.
This is what I am finding out. You can't blame bright young people for furthering their careers.
A fool and his money are good for business.
backpacker61
Posts: 1608
Joined: Wed May 20, 2020 6:36 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by backpacker61 »

As @Wiggums pointed out, I think a Vanguard LifeStrategy Fund would be an excellent choice for your sister, if she can stomach not dealing with a local representative. These are balanced (allocation) funds; basically "set it and forget it".

https://investor.vanguard.com/mutual-fu ... trategy/#/
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
Topic Author
shavenyak
Posts: 61
Joined: Sun Dec 03, 2017 12:06 pm

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by shavenyak »

Thank you for your excellent responses.

Yes, I have told my sister about these three funds:

1) Vanguard Target Retirement Income Fund (VTINX)...30%/70%. ER: 0.12%.
2) Vanguard Wellesley Income Fund (VWIAX)...40%/60%. ER: 0.16%.
3) Vanguard LifeStrategy Conservative Growth Fund (VSCGX)...40%/60%. ER: 0.12%.

My sister just wants someone to talk to, in person whenever possible. I have looked at the advisor profiles given for the Schwab office closest to where she lives. This is a superficial judgment on my part, but I know my sister and trust my instincts...I'll just say that unfortunately they just didn't seem like a good match with my sister.

At least she is open to talking about making a change. I made her promise that the Wells Fargo advisor wouldn't get near the ~$600k in cash she now has.
backpacker61
Posts: 1608
Joined: Wed May 20, 2020 6:36 am

Re: Schwab, Fidelity, or other Advisory Services Options for Sister

Post by backpacker61 »

shavenyak wrote: Sat Jul 31, 2021 5:42 pm My sister just wants someone to talk to, in person whenever possible. I have looked at the advisor profiles given for the Schwab office closest to where she lives. This is a superficial judgment on my part, but I know my sister and trust my instincts...I'll just say that unfortunately they just didn't seem like a good match with my sister.
She can always call the number at Vanguard.

It will (most likely) be a different person each time she calls, though.

I had a lot of business to transact last year following the death of a family member, and the people I interacted with at Vanguard with were professional and helpful. With an allocation fund like Wellesley, Target Retirement, or LifeStrategy, the main thing she will just need to be mindful of is to not draw the assets down too quickly, but draw "enough" so that she has a comfortable and dignified retirement that supports the lifestyle that she wants and is accustomed to.

Not having the dedicated advisor on her account would be a way to dramatically save on the investment expenses that she is paying now.
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
Post Reply