Portfolio Question

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Topic Author
Audman
Posts: 11
Joined: Wed Aug 04, 2021 4:07 pm

Portfolio Question

Post by Audman »

Retired couple 70/68 yo ; 70 yo took SS at 66
68 yo will take at 70(high earner) ; one pension 55k

Currently invested at MS looking to find
better/cost effective (current fee w MS 150bps all in) Advisor

3.3M portfolio includes two Axa variable annuities; one qualified( TSA) other non- qualified w guaranteed 6% GMIB

3 IRA MANAGED ACCTS :
CORE BOND AAA/ HIGH YIELD SMA ACCT (175bps fee)
TWO BALANCED 50/50 ACCTS (150bps fee)

2 Managed Taxable accts 50/50 ( 150bps fee)

Question: Want advisor to sort this out; reduce fees
1) Is Vanguard PAS good place to start? Schwab, Fidelity?
Can they advise on variable annuities

2) Are fee only advisors possibilty? Pro/Con
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David Jay
Posts: 14586
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Portfolio Question

Post by David Jay »

Welcome to the forum!

By Boglehead standards, a 1.5% per year AUM would be totally unacceptable. Even if you stay with an AUM manager you should be able to find a quality manager for no more than 1%.

In general, most of us tend to favor fee-only financial planners. Very few couples need regular hand-holding, most need an occasional “checkup” and fee-only planners fit well in that situation. Have them look over your account every 2-3 years.

You can post the Annuity information here and get good analysis. We have some insurance professionals (and retired insurance professionals) who can comment.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
lakpr
Posts: 11612
Joined: Fri Mar 18, 2011 9:59 am

Re: Portfolio Question

Post by lakpr »

Truly, invest everything in Target Retirement 2020 for the 70 year old and Target Retirement 2025 for the 68 year old and call it a day. As Bogle said, "you get (to keep) what you do not pay for!"
Topic Author
Audman
Posts: 11
Joined: Wed Aug 04, 2021 4:07 pm

Re: Portfolio Question

Post by Audman »

Anyone have experience with Vanguard PAS for portfolio
management vs Schwab Premium Investment Portfolios?
123
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Joined: Fri Oct 12, 2012 3:55 pm

Re: Portfolio Question

Post by 123 »

Many people use a 100% position in a single fund (or fund of funds) to get automatic worry-free account management. For example if an investor wanted a 60/40 blend they could invest 100% of an account in VBIAX Vanguard Balanced Index Shares for an expense ratio of .07% (7 bps) without any other fees. With that there's no need even for PAS.
The closest helping hand is at the end of your own arm.
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David Jay
Posts: 14586
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Portfolio Question

Post by David Jay »

Audman wrote: Thu Aug 05, 2021 1:28 pm Anyone have experience with Vanguard PAS for portfolio
management vs Schwab Premium Investment Portfolios?
Neither of those will provide any general advice. They will take the money you transfer to them and invest it according to their pre-planned portfolios. Which are fine, simple portfolios, but not specific advice for your situation.

A good fee-only financial planner will look at everything (including the annuities) and give you a recommended plan going forward. Depending on complexity, I have heard numbers like $3000 -$4000. That is way cheaper than what you are paying now, even if you had an annual visit. And they aren’t trying to sell you financial products.

I don’t know your breakdown between annuities and brokerage, but if for example you have, say, $1M in brokerage @ 150 basis points (1.5%), you are paying ML $15,000 a year for their portfolio management.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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