Fidelity Wealth Advisors Solutions

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HoosierDude
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Fidelity Wealth Advisors Solutions

Post by HoosierDude »

During my annual meeting/checkup with my Fidelity rep he spent a portion of our hour together sharing (selling?) information about Fidelty Wealth Advisor Solutions.
As I understand it, Fidelity will help participants select an outside, non-Fidelity advisor to provide strategies not offered by Fidelity and professional management at a lower cost.
His main selling point centered around minimizing loss during times like these when many assets are down so we can take advantage during the recovery.
Like many here, I'm not a fan of fees. IIRC, the lowest rate for these services was .8 with a minimum 1M investment (my entire IRA).
I'm down 16% in '22, but with 12 years to retirement I'm not troubled. My AA is at my comfort level.
My rep emailed this week asking if I wanted to have a discussion with any of the outside reps to learn more. I would welcome information from the board before I call him.
Does anyone participate in this program?
Is the .8 er paid to Fidelity or the advisor?
With 1M at age 55 I'm not sure I'm in the category of investors that need someone to suggest "strategies" outside my Bogleheads philosophy. Or am I missing something?
123
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Re: Fidelity Wealth Advisors Solutions

Post by 123 »

Likely you would keep a Fidelity Account while using the advisor and the fee would be automatically taken from the account, likely on a quarterly basis. Though the advisor might be independent the investments they can make available to you are likely sold by Fidelity, its probably unlikely that they would put you into a mix of zero expense Fidelity funds. I'm sure Fidelity gets some portion of the AUM fee for providing "account services" and that Fidelity provides some "incentive" for the advisor to steer you toward higher cost Fidelity products. So its a service to get you to think less about your investments while the advisor is thinking carefully about commissions and incentives. Why would anyone use a different business model when this one works so well (for the brokerage and the advisor at least)? So there is nothing new to see here.
The closest helping hand is at the end of your own arm.
FreelancerNYC
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Re: Fidelity Wealth Advisors Solutions

Post by FreelancerNYC »

Looks similar to the Schwab Advisor Network.
HoosierDude wrote: Fri May 20, 2022 10:18 am Fidelity will help participants select an outside, non-Fidelity advisor to provide strategies not offered by Fidelity and professional management at a lower cost.
What are these “strategies” that are worth paying more than the essentially free access to index funds that will statistically perform better than whatever actively managed solutions this advisor will pitch? If they advocate indexing (unlikely), 0.8%/year is still a ripoff considering you can do it yourself. Tax/planning/one-off services can be had elsewhere for a one-time fee.
His main selling point centered around minimizing loss during times like these when many assets are down so we can take advantage during the recovery.
As opposed to not participating in the recovery while being invested in better performing index funds? He wants a commission. So far he’s only increased your chance of loss by promoting an advisor charging 0.8% you’re not already paying. You haven’t lost anything unless you’ve sold, which they sound anxious to encourage so they can reinvest in more exotic strategies.
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retired@50
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Re: Fidelity Wealth Advisors Solutions

Post by retired@50 »

HoosierDude wrote: Fri May 20, 2022 10:18 am ...
Is the .8 er paid to Fidelity or the advisor?
With 1M at age 55 I'm not sure I'm in the category of investors that need someone to suggest "strategies" outside my Bogleheads philosophy. Or am I missing something?
I don't think you need "strategies" either. The Boglehead method is solid.

As an exercise, maybe list out your annual expenses for things you spend money on...
House
Car
Food
Clothes
etc.

Then, add in a budget line for Investment Adviser expenses of $8,000 ($1,000,000 * .80%) per year.
I'd imagine it will be one of the top 3 or 4 of your annual expenses. Is this the direction you want to go?

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
dbr
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Re: Fidelity Wealth Advisors Solutions

Post by dbr »

If you are wondering why you would want to pay 0.8% for something you don't need, then I don't think you are missing anything. It doesn't sound like you are in need of any help.

1. Why are you considering financial advice from a mutual fund company?

2. You can just say no and also stop talking to the Fidelity salesman.

I have been with Fidelity for decades and never have any occasion to speak to a salesman there. Customer service for any account issue that might arise is quite good and I have used their local office for certain transactions that needed signatures in person. Fidelity is an excellent broker but you just have to say no when they try to sell you something, which they sometimes do try to do.
Coburn
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Re: Fidelity Wealth Advisors Solutions

Post by Coburn »

These wealth advisor solutions aren't needed if you are credibly managing on your own. Tell him no.

Before I ended my relationship with mine advisor a few years back, they had moved a portion of my portfolio from stocks to bonds at a time when the markets were very volatile. They actually did the reverse of what I would have done or wanted to do.

Besides the yearly fee, are you comfortable with ceding control to them while you watch from the sidelines? After all, that is exactly what these proposals do.
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galawdawg
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Re: Fidelity Wealth Advisors Solutions

Post by galawdawg »

Are you confident that a Fidelity Wealth Advisors Solutions advisor will, over the long-term, consistently provide you annual returns that are at least 0.8% greater than what you will realize by holding a simple two, three or four-fund portfolio consisting of low-cost index funds?

If not, there is your answer.
Topic Author
HoosierDude
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Re: Fidelity Wealth Advisors Solutions

Post by HoosierDude »

Thank you everyone for your responses and advice. I think intuitively I knew this was not something I needed, but all the "protect you in this market, minimize loss and put it to work when the market rebounds" talk got inside my head. Feel a bit silly now for my post.
Oh, I did the suggested exercise comparing the 8K annual cost to the other lines in my budget. It is almost exactly what I spend on groceries in a year (not including eating out). $150 per week!
Lesson learned! Thanks again!
drzzzzz
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Re: Fidelity Wealth Advisors Solutions

Post by drzzzzz »

When I have spoken to individuals who are offering these types of solutions I always ask them to show me their returns and the benchmarks that they use so I can objectively see what their returns have been and what their asset allocations are.
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retired@50
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Re: Fidelity Wealth Advisors Solutions

Post by retired@50 »

HoosierDude wrote: Fri May 20, 2022 4:54 pm ...
Oh, I did the suggested exercise comparing the 8K annual cost to the other lines in my budget. It is almost exactly what I spend on groceries in a year (not including eating out). $150 per week!
Lesson learned! Thanks again!
Nothing like a little kitchen table arithmetic to help people see the light.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
David_w
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Re: Fidelity Wealth Advisors Solutions

Post by David_w »

I have had sizeable managed account with Fidelity since 2015 and they never once suggested anything that involved an outside investor. I pay them 1% I think.
Miguelito
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Re: Fidelity Wealth Advisors Solutions

Post by Miguelito »

David_w wrote: Fri May 20, 2022 6:11 pm I have had sizeable managed account with Fidelity since 2015 and they never once suggested anything that involved an outside investor. I pay them 1% I think.
Have they helped you outperform the market by >1%? I am sincerely curious to know.
backpacker61
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Re: Fidelity Wealth Advisors Solutions

Post by backpacker61 »

HoosierDude wrote: Fri May 20, 2022 10:18 am His main selling point centered around minimizing loss during times like these when many assets are down so we can take advantage during the recovery.
Like many here, I'm not a fan of fees. IIRC, the lowest rate for these services was .8 with a minimum 1M investment (my entire IRA).
I think wealth advisors solutions recommended by Fidelity are probably not the worst thing out there (probably better than accounts at Ameriprise or Edward Jones), but I think you are very likely to do better without it. The times like these bit makes me feel as if he is "poking your buttons" at an emotional time for investors. Never let a crisis go to waste.

I dabble in a few non-index strategies (in the form of a few CEF's), as a "hobby shop" activity, but I research and purchase these on my own so it costs me less than paying AUM fees annually. It's my acknowledged vice instead of smoking cigars.
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
ClassII
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Re: Fidelity Wealth Advisors Solutions

Post by ClassII »

I got cold called by a local Merrill advisor (my taxable account is with Merrill Edge for the credit card rewards). It was on a particularly bad day for the market. I’m convinced they called that day on purpose. They’re hoping you’re looking at your balances in terror and leap into their loving arms when you realize you don’t know what the heck you’re doing.

Much easier to sell managed accounts today than when meme stocks were at all time highs and every chump thinks they’re Warren Buffet.
boogiehead
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Re: Fidelity Wealth Advisors Solutions

Post by boogiehead »

HoosierDude wrote: Fri May 20, 2022 4:54 pm Thank you everyone for your responses and advice. I think intuitively I knew this was not something I needed, but all the "protect you in this market, minimize loss and put it to work when the market rebounds" talk got inside my head. Feel a bit silly now for my post.
Oh, I did the suggested exercise comparing the 8K annual cost to the other lines in my budget. It is almost exactly what I spend on groceries in a year (not including eating out). $150 per week!
Lesson learned! Thanks again!
I'm getting spammed from them as well after not hearing from them since late last year. I've gotten two calls already from them this month as they
are like sharks that smell blood in the water. I get a smirk when I listen to their voicemail because they want to see how they can support me during this "unprecedented time of market volatility and high inflation". Unless the Fidelity Rep can pour trillions into the market like the Feds or subsidize me for my gas refuels, I doubt they can support me in any useful way to address the current situation so I guess I'll just Chill and Stay the Course.
Jack FFR1846
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Re: Fidelity Wealth Advisors Solutions

Post by Jack FFR1846 »

Red flags go up for me with the suggestion that someone can prevent losses when the market goes down. By doing what? Selling equity with downturns of 10%? Like now? Ok, great. Now that they've sold your equity positions, what happens if on Monday, the market goes up 2000 points in 12 minutes. You've now missed that gain because you're out. Personally, I'd ignore them. So what if the market goes down. No, really. So what? In 10 years when you want to start living off of these investments and they're up 500% from now, do you really care that they went down 50% 3 times along the way?

My own investments have gone down $200k or $300k (not sure, I'd have to open and look at my spread sheet). And I'm retiring in the next year. But it's not like I'll retire and pull every dime out of investments. I'm prepared with a bunch of cash and a bigger bunch of savings bonds. I can pull money from them as the market completes its downturn and recovers.
Bogle: Smart Beta is stupid
David_w
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Re: Fidelity Wealth Advisors Solutions

Post by David_w »

Miguelito wrote: Sat May 21, 2022 1:13 pm
David_w wrote: Fri May 20, 2022 6:11 pm I have had sizeable managed account with Fidelity since 2015 and they never once suggested anything that involved an outside investor. I pay them 1% I think.
Have they helped you outperform the market by >1%? I am sincerely curious to know.
Honestly I don't know. I am very bad at looking at my investments. I just feel like it is not something I can do on my own. I am 60 yrs old and have always been bad at investing on my own. Also too emotional especially at times like these.
Your question prompted me to look. Here is what it says pre-tax.

YTD - 12.27%
1 year -6.62%
For 2021 +14.96%
Life since 3/31/20 +15.62%
I had switched type of accounts so I guess that is why life is only since 03/2020
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