My mom's portfolio under the guidance of a CFP/CFA

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Macaroni2314
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My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

[See Subject: Want to manage my parents' retirement, signed up for CFP course for Macaroni2629's related post about earning CFP credits in order to help manage this portfolio. --moderator Kendall]

Deleted contents here due to feedback from others feedback here that this was an inappropriate use of the forums. Sincere apologies.
Last edited by Macaroni2314 on Tue Apr 04, 2023 11:05 am, edited 1 time in total.
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retiredjg
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by retiredjg »

What are your questions?

You mentioned in a different post that your mother is paying $8k a year for the management of these accounts. For this $2.4 million, that is a fee of 0.33%. Very few advisors charge that little. Most charge at least 3 times that amount.

The investments could be better, but if she is happy with them, what is the problem and why are you involved?

If she has not asked for your help, you should probably stay out of it.
HomeStretch
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by HomeStretch »

Thanks for posting your mom’s AUM portfolio based on feedback you received in your other active thread about taking a CFP course and CFP exam in order to manage your mom’s portfolio found here:
viewtopic.php?t=401537

You are showing here just your mom’s AUM portfolio. It is not ideal to ask for feedback on just this portion of your mom’s finances. As she is married, it would also make sense to include your dad’s information plus other relevant info such as their ages, marginal tax rate, desired asset allocation, etc. For best feedback, edit your original post using the pencil ✏️ icon to include their complete financial picture using the “Asking Portfolio Questions” template found here:
https://www.bogleheads.org/wiki/Asking_ ... _questions

Based on what you posted, I will say it looks like your mom can simplify by reducing the number of holdings. I can’t tell if she can simplify further by reducing the number of accounts as you haven’t identified what type of accounts that Accts 1, 3 and 4 are (i.e., Taxable, Inherited Traditional IRA, etc.). As you haven’t provided ERs for each of the holdings, it’s hard to say whether your mom could lower her investment costs aside from possibly eliminating the $8k advisor fee. Which fee, on the surface, seems very reasonable for $2 million in AUM if the CFP is good.

But if you can’t obtain/provide the info requested in the “Asking Portfolio Questions”, my suggestion is that you refrain from doing any managing of the AUM portfolio as you may do more harm than good without knowing the complete picture.

As your mom is in her 60s, it is important to keep in mind that any taxable portfolio transactions could impact her Medicare premium $ and SS taxation.
Last edited by HomeStretch on Sat Apr 01, 2023 8:10 am, edited 1 time in total.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

retiredjg wrote: Sat Apr 01, 2023 7:56 am What are your questions?

You mentioned in a different post that your mother is paying $8k a year for the management of these accounts. For this $2.4 million, that is a fee of 0.33%. Very few advisors charge that little. Most charge at least 3 times that amount.

The investments could be better, but if she is happy with them, what is the problem and why are you involved?

If she has not asked for your help, you should probably stay out of it.
I thought I was submitting this for a portfolio review? I'm sorry for not asking questions.

Well, thank you for informing me that this advisor is charging very little. I feel like I'm missing something or misinterpreting the statements then, but if that is the case, then it's good to know/validating that the fees are reasonable.

Thank you for your feedback. I'm inquiring because my mom is financially illiterate, and I'm concerned for her well being. She trusts this person 100%, and as we all know, the elderly can succumb to scams. I just want to validate that my mom is in good hands.

If she is in good hands, then I will lay off.

Thank you again for your time.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

HomeStretch wrote: Sat Apr 01, 2023 8:04 am Thanks for posting your mom’s AUM portfolio based on feedback you received in your other active thread about taking a CFP course and CFP exam in order to manage your mom’s portfolio found here:
viewtopic.php?t=401537

You are showing here just your mom’s AUM portfolio. It is not ideal to ask for feedback on just this portion of your mom’s finances. As she is married, it would also make sense to include your dad’s information plus other relevant info such as their ages, marginal tax rate, desired asset allocation, etc. For best feedback, edit your original post using the pencil ✏️ icon to include their complete financial picture using the “Asking Portfolio Questions” template found here:
https://www.bogleheads.org/wiki/Asking_ ... _questions

Based on what you posted, I will say it looks like your mom can simplify by reducing the number of holdings. I can’t tell if she can simplify further by reducing the number of accounts as you haven’t identified what type of accounts that Accts 1, 3 and 4 are (i.e., Taxable, Inherited Traditional IRA, etc.). As you haven’t provided ERs for each of the holdings, it’s hard to say whether your mom could lower her investment costs aside from possibly eliminating the $8k advisor fee. Which fee, on the surface, seems very reasonable for $2 million in AUM if the CFP is good.

But if you can’t obtain/provide the info requested in the “Asking Portfolio Questions”, my suggestion is that you refrain from doing any managing of the AUM portfolio as you may do more harm than good without knowing the complete picture.

As your mom is in her 60s, it is important to keep in mind that any taxable portfolio transactions could impact her Medicare premium $ and SS taxation.
This is going to take some time for me to gather all this information; I'll get back to this.

Also, sorry, what does ER stand for? And how do I find it on the monthly statements? I'm going to pore over the statements and try to understand them better.

EDIT: I read ER is expense ratio, sorry about that

Thank you for clarifying and directing me to the right place!
Last edited by Macaroni2314 on Sat Apr 01, 2023 9:02 am, edited 2 times in total.
HomeStretch
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by HomeStretch »

While your mom’s AUM fee is low at 0.33% of AUM, her advisor has her portfolio in what looks to be some high-cost funds that would be an investment cost in addition to the $8k advisor fee. For example, her Account 1 holding PONAX (PIMCO Income A) has a front load and a 0.91% ER.

But in the absence of a complete post in the “Asking Portfolio Questions” as per my prior post, I don’t think you should advise any changes without having the complete picture.

Edit:
Macaroni2629 wrote: Sat Apr 01, 2023 8:16 am This is going to take some time for me to gather all this information; I'll get back to this. …
You obviously have the best of intentions in wanting to help your parents. Be sure to take the “temperature of the room” to be sure both your parents are really ready to accept you gathering their info, posting it and they are willing to accept guidance from you and a roomful of internet strangers.

I helped my parents years ago move away from a high-cost portfolio with a WF advisor when they came to me because they were having trouble making ends meet. But I waited until they were ready and asked me for help.
Last edited by HomeStretch on Sat Apr 01, 2023 8:23 am, edited 1 time in total.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

HomeStretch wrote: Sat Apr 01, 2023 8:17 am While your mom’s AUM fee is low at 0.33% of AUM, her advisor has her portfolio in what looks to be some high-cost funds that would be an investment cost in addition to the $8k advisor fee. For example, her Account 1 holding PONAX (PIMCO Income A) has a front load and a 0.91% ER.

But in the absence of a complete post in the “Asking Portfolio Questions” as per my prior post, I don’t think you should advise any changes without having the complete picture.
This is the kind of information I was hoping to get, thank you!

I will spend the next several days gathering a more complete financial picture for my parents and perhaps start a completely new thread including as comprehensive picture of my parents' assets as possible.

Thanks!
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

HomeStretch wrote: Sat Apr 01, 2023 8:17 am While your mom’s AUM fee is low at 0.33% of AUM, her advisor has her portfolio in what looks to be some high-cost funds that would be an investment cost in addition to the $8k advisor fee. For example, her Account 1 holding PONAX (PIMCO Income A) has a front load and a 0.91% ER.

But in the absence of a complete post in the “Asking Portfolio Questions” as per my prior post, I don’t think you should advise any changes without having the complete picture.

Edit:
Macaroni2629 wrote: Sat Apr 01, 2023 8:16 am This is going to take some time for me to gather all this information; I'll get back to this. …
You obviously have the best of intentions in wanting to help your parents. Be sure to take the “temperature of the room” to be sure both your parents are really ready to accept you gathering their info, posting it and they are willing to accept guidance from you and a roomful of internet strangers.

I helped my parents years ago move away from a high-cost portfolio with a WF advisor when they came to me because they were having trouble making ends meet. But I waited until they were ready and asked me for help.
Okay, will do, thanks! I appreciate the empathy here and you understanding my intentions for my parents.
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retiredjg
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by retiredjg »

Macaroni2629 wrote: Sat Apr 01, 2023 8:10 am Well, thank you for informing me that this advisor is charging very little. I feel like I'm missing something or misinterpreting the statements then, but if that is the case, then it's good to know/validating that the fees are reasonable.
You might be misinterpreting the statements. The $8k could be a quarterly fee. That would be high, but would be very unlikely to cause her to run out of money.

But that's not really the point. Your mother may be financially illiterate, but so is most of the rest of the world. And you are just a beginner yourself (not a criticism, we all start in the same place). The fact that she is not a savvy investor is heart-tugging, but it is not a problem for someone else to fix.

Unless she is actually incompetent, how and where she invests her money is her business. If she has not asked for your help, it is none of your business. Since this is apparently inherited money (hers), it is not even your father's business.

I have no doubt that your intentions are just to help and protect your mother. But good intentions are called "meddling" when help is not requested.

I'm sure my words sound harsh, but maybe you need to take a step back and consider that meddling on your part could ruin your relationship with your mother. She's not going to run out of money. What problem are you trying to solve that would cause you to risk having a good relationship with her?
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

retiredjg wrote: Sat Apr 01, 2023 8:31 am
Macaroni2629 wrote: Sat Apr 01, 2023 8:10 am Well, thank you for informing me that this advisor is charging very little. I feel like I'm missing something or misinterpreting the statements then, but if that is the case, then it's good to know/validating that the fees are reasonable.
You might be misinterpreting the statements. The $8k could be a quarterly fee. That would be high, but would be very unlikely to cause her to run out of money.

But that's not really the point. Your mother may be financially illiterate, but so is most of the rest of the world. And you are just a beginner yourself (not a criticism, we all start in the same place). The fact that she is not a savvy investor is heart-tugging, but it is not a problem for someone else to fix.

Unless she is actually incompetent, how and where she invests her money is her business. If she has not asked for your help, it is none of your business. Since this is apparently inherited money (hers), it is not even your father's business.

I have no doubt that your intentions are just to help and protect your mother. But good intentions are called "meddling" when help is not requested.

I'm sure my words sound harsh, but maybe you need to take a step back and consider that meddling on your part could ruin your relationship with your mother. She's not going to run out of money. What problem are you trying to solve that would cause you to risk having a good relationship with her?

Other people in my family pushed me to push my mom.. I feel very overwhelmed and underqualified to do any of this, which is why I signed up for the CFP course to begin with.

You're right; I'd like to maintain a good relationship with my mom.

After all the helpful and responsive feedback I've gotten on here the last 24 hours (and this is the most amazing personal finance forum I have ever found), my inclination is to listen to everyone here. I'm going to proceed with the CFP course to start learning something (and I understand people here think most of it is useless to me, but I've been a lifelong learner, and I like that the course is comprehensive to a degree), and in the meantime, I'm just going to follow what the CFP does and learn by watching.
Last edited by Macaroni2314 on Sat Apr 01, 2023 9:04 am, edited 1 time in total.
Dave55
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Dave55 »

If you are going to do the CFP, you ought to do the CFA and CIMA courses too, then your knowledge base will be quite broad.

Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

Dave55 wrote: Sat Apr 01, 2023 8:40 am If you are going to do the CFP, you ought to do the CFA and CIMA courses too, then your knowledge base will be quite broad.

Dave
I was thinking that the CFA would be the next step after this; thank you for validating my thoughts. I just Googled what CIMA is; now that's third on my list!
bmcgin
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by bmcgin »

I'm curious as to what her total returns look like. CFA / CFP is a very good combination for a wealth manager. Is he beating the market?
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by retiredjg »

Macaroni2629 wrote: Sat Apr 01, 2023 8:38 am Other people in my family pushed me to push my mom.. I feel very overwhelmed and underqualified to do any of this, which is why I signed up for the CFP course to begin with.

I feel very overwhelmed and underqualified to do any of this, which is why I signed up for the CFP course to begin with.

You're right; I'd like to maintain a good relationship with my mom.

After all the helpful and responsive feedback I've gotten on here the last 24 hours (and this is the most amazing personal finance forum I have ever found), my inclination is to listen to everyone here. I'm going to proceed with the CFP course to start learning something (and I understand people here think most of it is useless to me, but I've been a lifelong learner, and I like that the course is comprehensive to a degree), and in the meantime, I'm just going to follow what the CFP does and learn by watching.
If the CFP course interests you, fine. But it is certainly not necessary to gain the financial savvy to invest wisely.

All of what an ordinary investor needs to know is found in the basic discussions on this forum, the Bogleheads' investing principles, and in the Boglehead books and a few other of the simpler investing books. (See "getting started" in the Wiki.)

All of the rest is detail. A very important thing to realize - most of the discussions here are about details that do not matter much - so do not be fooled into thinking that something is important just because it is discussed ad nauseam around here. That is just the nature of the beast.

There is no doubt that your mother's investments could be improved. But the risk/cost of getting involved in this is just too high and her situation is not, in any way, an emergency you need to fix. Concentrate on managing your own life and interests.
Last edited by retiredjg on Sat Apr 01, 2023 9:06 am, edited 1 time in total.
suemarkp
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by suemarkp »

I thought an advisor could not charge an AUM (assetts under management) fee if the fund had loaded funds. It is possible some of her accounts are all loaded funds with no AUM, and others are AUM with no loads. 4 accounts, 4 to figure out.

It would be best to go to marketwatch, morningstar, yahoo finance, or someplace similar and look up each ticker. For each, find its Expense Ratio (ER), if it has a front or back load fee (a percentage you pay to buy or sell the fund), and see if there is a 12b-1 fee (part of the ER that gets kicked back to the advisor.

Verify if the AUM is billed monthly, quarterly, or yearly and which acounts charge it. It is good for everyone to know what things cost. Whether you should be involved in change is a separate question. Using a tool like portfolio visualizer.com backtest is useful to see how each account performed versus if something else had been done. It only looks back, and it is not fair to compare a portfolio that is bond and cash heavy to one that is all stock. Even an account that was heavy on international stock wont compare as favorably to one that was US only stock except for maybe last year.

Finally, taxes are another issue to understand. If these funds are all IRAs, taxes are easier but RMDs will be required. If a taxable account, you want to avoid active managed funds and depending on her tax bracket maybe have tax exempt bonds. Many "advisors" fail on the tax management issues. Some also juice their income by having you convert things in a non optimal way.

6 months or a year should not hurt her portfolio much if you just let it ride. You can learn a lot in 6 months by reading many posts here. The CFP path will be slower, but perhaps easier if you have already started here to learn the basics.
Mark | Somewhere in WA State
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

bmcgin wrote: Sat Apr 01, 2023 8:55 am I'm curious as to what her total returns look like. CFA / CFP is a very good combination for a wealth manager. Is he beating the market?
Over what time frame are you asking? Like how did he do as of the end of 2022?
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

retiredjg wrote: Sat Apr 01, 2023 9:04 am
Macaroni2629 wrote: Sat Apr 01, 2023 8:38 am Other people in my family pushed me to push my mom.. I feel very overwhelmed and underqualified to do any of this, which is why I signed up for the CFP course to begin with.

I feel very overwhelmed and underqualified to do any of this, which is why I signed up for the CFP course to begin with.

You're right; I'd like to maintain a good relationship with my mom.

After all the helpful and responsive feedback I've gotten on here the last 24 hours (and this is the most amazing personal finance forum I have ever found), my inclination is to listen to everyone here. I'm going to proceed with the CFP course to start learning something (and I understand people here think most of it is useless to me, but I've been a lifelong learner, and I like that the course is comprehensive to a degree), and in the meantime, I'm just going to follow what the CFP does and learn by watching.
If the CFP course interests you, fine. But it is certainly not necessary to gain the financial savvy to invest wisely.

All of what an ordinary investor needs to know is found in the basic discussions on this forum, the Bogleheads' investing principles, and in the Boglehead books and a few other of the simpler investing books. (See "getting started" in the Wiki.)

All of the rest is detail. A very important thing to realize - most of the discussions here are about details that do not matter much - so do not be fooled into thinking that something is important just because it is discussed ad nauseam around here. That is just the nature of the beast.

There is no doubt that your mother's investments could be improved. But the risk/cost of getting involved in this is just too high and her situation is not, in any way, an emergency you need to fix. Concentrate on managing your own life and interests.
I appreciate this feedback very much, thank you.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

suemarkp wrote: Sat Apr 01, 2023 9:05 am I thought an advisor could not charge an AUM (assetts under management) fee if the fund had loaded funds. It is possible some of her accounts are all loaded funds with no AUM, and others are AUM with no loads. 4 accounts, 4 to figure out.

It would be best to go to marketwatch, morningstar, yahoo finance, or someplace similar and look up each ticker. For each, find its Expense Ratio (ER), if it has a front or back load fee (a percentage you pay to buy or sell the fund), and see if there is a 12b-1 fee (part of the ER that gets kicked back to the advisor.

Verify if the AUM is billed monthly, quarterly, or yearly and which acounts charge it. It is good for everyone to know what things cost. Whether you should be involved in change is a separate question. Using a tool like portfolio visualizer.com backtest is useful to see how each account performed versus if something else had been done. It only looks back, and it is not fair to compare a portfolio that is bond and cash heavy to one that is all stock. Even an account that was heavy on international stock wont compare as favorably to one that was US only stock except for maybe last year.

Finally, taxes are another issue to understand. If these funds are all IRAs, taxes are easier but RMDs will be required. If a taxable account, you want to avoid active managed funds and depending on her tax bracket maybe have tax exempt bonds. Many "advisors" fail on the tax management issues. Some also juice their income by having you convert things in a non optimal way.

6 months or a year should not hurt her portfolio much if you just let it ride. You can learn a lot in 6 months by reading many posts here. The CFP path will be slower, but perhaps easier if you have already started here to learn the basics.
This is a good tip to find out how much things cost! This is something tangible I can look into (everything else feels overwhelming)
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retiredjg
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by retiredjg »

suemarkp wrote: Sat Apr 01, 2023 9:05 am I thought an advisor could not charge an AUM (assetts under management) fee if the fund had loaded funds. It is possible some of her accounts are all loaded funds with no AUM, and others are AUM with no loads. 4 accounts, 4 to figure out.
I think you may be referring to some of the "fiduciary rules" that came out several years ago. Some of those rules only applied to retirement accounts (IRAs) and not taxable accounts. And some of the rules have been rescinded although I don't know which ones.

Also, I think (but am not sure) it is possible for an advisor to sell A shares (loaded funds) and waive the load.
bmcgin
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by bmcgin »

Macaroni2629 wrote: Sat Apr 01, 2023 9:06 am
bmcgin wrote: Sat Apr 01, 2023 8:55 am I'm curious as to what her total returns look like. CFA / CFP is a very good combination for a wealth manager. Is he beating the market?
Over what time frame are you asking? Like how did he do as of the end of 2022?
2022 total return would be good. 2021, 2020 and 2019 if you have them. Really the more data, the better.
bradinsky
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by bradinsky »

Out of curiosity, if you are not financially literate yourself, why are you trying to involve yourself in your mother’s finances? In your situation, I would just try to make sure the advisor is honest & has a decent reputation. If your mother didn’t request your help, you should let her handle this herself. Based on the size of her portfolio, she & her advisor must be doing something right. After that, try to read & educate yourself with regards to investing & finance. For some, it is boring & for others it’s fascinating. Remember, just a little bit of knowledge can be dangerous.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

bradinsky wrote: Sat Apr 01, 2023 9:49 am Out of curiosity, if you are not financially literate yourself, why are you trying to involve yourself in your mother’s finances? In your situation, I would just try to make sure the advisor is honest & has a decent reputation. If your mother didn’t request your help, you should let her handle this herself. Based on the size of her portfolio, she & her advisor must be doing something right. After that, try to read & educate yourself with regards to investing & finance. For some, it is boring & for others it’s fascinating. Remember, just a little bit of knowledge can be dangerous.
I consider myself literate relative to the average person in America, but not enough to consider myself an expert on anything.

I've been through many life experiences in which I've tried to find a competent person in a service and been disappointed by their results. I'm very weary of getting services in general. I don't really want to go into details, but I've been through enough life experiences in which I don't trust every serviceperson 100%.

I don't doubt the credentials of the CFP, but I'm wondering if he has my mom's best interests at heart. He has one positive review on Google. I'm guessing his clients are my parents' age, and no one is writing reviews on Google. I cannot vet his honesty without actually knowing what he's doing?

"Remember, just a little bit of knowledge can be dangerous." I'm kind of surprised by your message of discouraging me from learning. Thank you for your feedback.
dbr
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by dbr »

Macaroni2629 wrote: Sat Apr 01, 2023 7:27 am My mom (age 60's) inherited this money from my grandmother and has been under the guidance of a CFP/CFA at one of the big broker dealers. This money is separate from my parents' other assets which the CFP/CFA does not manage (rough estimate of about a few million).

My mom has been working with the same CFP/CFA for 20+ years. She is not financially literate and trusts everything he says.

An obvious question would be how or why a financially illiterate person would be depending on an advisor for a small piece of the assets and leaving the larger piece unadvised.

I might assume the story is that the husband is managing the couple's assets and for reasons, possibly good reasons, the inheritance has been kept separate.

A kind of obvious question would be why the couple as a couple would not consider this money as part of the joint plan, whatever its legal status and why the husband who apparently manages the larger set of assets would not take care of the plan for the inheritance as well. If this is an issue of a relationship and money that would be one thing, but just as financial management goes it seems odd that things are as they are.

The simple question about the account itself is what are the costs, meaning AUM and fund expense ratios, and does your mom understand this. One could also ask what the couple is paying all in for their other assets, wherever they are.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

dbr wrote: Sat Apr 01, 2023 10:02 am
Macaroni2629 wrote: Sat Apr 01, 2023 7:27 am My mom (age 60's) inherited this money from my grandmother and has been under the guidance of a CFP/CFA at one of the big broker dealers. This money is separate from my parents' other assets which the CFP/CFA does not manage (rough estimate of about a few million).

My mom has been working with the same CFP/CFA for 20+ years. She is not financially literate and trusts everything he says.

An obvious question would be how or why a financially illiterate person would be depending on an advisor for a small piece of the assets and leaving the larger piece unadvised.

I might assume the story is that the husband is managing the couple's assets and for reasons, possibly good reasons, the inheritance has been kept separate.

A kind of obvious question would be why the couple as a couple would not consider this money as part of the joint plan, whatever its legal status and why the husband who apparently manages the larger set of assets would not take care of the plan for the inheritance as well. If this is an issue of a relationship and money that would be one thing, but just as financial management goes it seems odd that things are as they are.

The simple question about the account itself is what are the costs, meaning AUM and fund expense ratios, and does your mom understand this. One could also ask what the couple is paying all in for their other assets, wherever they are.
I think the reason my grandma just thought there might be a chance that my dad might divorce my mom. I think parents always worry about a potential ex-spouse "stealing" family money. My parents have been married over 30 years now, and my grandma passed away about 5 years ago.

Yes, the bigger picture is that my parents are not on the same financial page. My dad doesn't trust financial advisors. My mom is financially illiterate. My mom lets my dad manage the main finances, but I guess she views extra responsibility for money that my grandma left her. My grandma also worked with this advisor.

Above all, the biggest financial question I'm getting out of all of these discussions is to find out what are the costs (I feel uncomfortable asking the CFP because I don't want him to think I don't trust him, so I'm going to hold off on asking.)? I'm going to go on Morningstar and find out the costs of all the assets and reply on this thread, thanks!
bradinsky
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by bradinsky »

Macaroni2629 wrote: Sat Apr 01, 2023 9:58 am
bradinsky wrote: Sat Apr 01, 2023 9:49 am Out of curiosity, if you are not financially literate yourself, why are you trying to involve yourself in your mother’s finances? In your situation, I would just try to make sure the advisor is honest & has a decent reputation. If your mother didn’t request your help, you should let her handle this herself. Based on the size of her portfolio, she & her advisor must be doing something right. After that, try to read & educate yourself with regards to investing & finance. For some, it is boring & for others it’s fascinating. Remember, just a little bit of knowledge can be dangerous.
I consider myself literate relative to the average person in America, but not enough to consider myself an expert on anything.

I've been through many life experiences in which I've tried to find a competent person in a service and been disappointed by their results. I'm very weary of getting services in general. I don't really want to go into details, but I've been through enough life experiences in which I don't trust every serviceperson 100%.

I don't doubt the credentials of the CFP, but I'm wondering if he has my mom's best interests at heart. He has one positive review on Google. I'm guessing his clients are my parents' age, and no one is writing reviews on Google. I cannot vet his honesty without actually knowing what he's doing?

"Remember, just a little bit of knowledge can be dangerous." I'm kind of surprised by your message of discouraging me from learning. Thank you for your feedback.
I didn’t discourage you, I encouraged you to educate yourself. You might find it interesting. Trying to involve yourself with your mother’s finances when you are not much more knowledgeable than her could be bad for her. Look at it this way, she knew enough to seek out someone to help her because she realized she needed the help. That is what many, or most do.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

bradinsky wrote: Sat Apr 01, 2023 10:19 am
Macaroni2629 wrote: Sat Apr 01, 2023 9:58 am
bradinsky wrote: Sat Apr 01, 2023 9:49 am Out of curiosity, if you are not financially literate yourself, why are you trying to involve yourself in your mother’s finances? In your situation, I would just try to make sure the advisor is honest & has a decent reputation. If your mother didn’t request your help, you should let her handle this herself. Based on the size of her portfolio, she & her advisor must be doing something right. After that, try to read & educate yourself with regards to investing & finance. For some, it is boring & for others it’s fascinating. Remember, just a little bit of knowledge can be dangerous.
I consider myself literate relative to the average person in America, but not enough to consider myself an expert on anything.

I've been through many life experiences in which I've tried to find a competent person in a service and been disappointed by their results. I'm very weary of getting services in general. I don't really want to go into details, but I've been through enough life experiences in which I don't trust every serviceperson 100%.

I don't doubt the credentials of the CFP, but I'm wondering if he has my mom's best interests at heart. He has one positive review on Google. I'm guessing his clients are my parents' age, and no one is writing reviews on Google. I cannot vet his honesty without actually knowing what he's doing?

"Remember, just a little bit of knowledge can be dangerous." I'm kind of surprised by your message of discouraging me from learning. Thank you for your feedback.
I didn’t discourage you, I encouraged you to educate yourself. You might find it interesting. Trying to involve yourself with your mother’s finances when you are not much more knowledgeable than her could be bad for her. Look at it this way, she knew enough to seek out someone to help her because she realized she needed the help. That is what many, or most do.
I definitely know more than my mom, but again, I don't know what I don't know? Can you suggest a comprehensive path of learning?
dbr
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by dbr »

Macaroni2629 wrote: Sat Apr 01, 2023 10:22 am

I definitely know more than my mom, but again, I don't know what I don't know? Can you suggest a comprehensive path of learning?
Yes.

One set of resources is the "Getting Started" path in the Wiki, plus the Wiki altogether: https://www.bogleheads.org/wiki/Main_Page

Included in that path or selected separately are many, many Boglehead compatible books by many authors, such Bogleheads, Bogle, Ferri, Swedroe, Bernstein, etc. etc. and also other websites such as The Oblivious Investor and The White Coat Investor (for medical professionals). There is also good reading on the Early Retirement Forum (home of FireCalc).
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

dbr wrote: Sat Apr 01, 2023 10:26 am
Macaroni2629 wrote: Sat Apr 01, 2023 10:22 am

I definitely know more than my mom, but again, I don't know what I don't know? Can you suggest a comprehensive path of learning?
Yes.

One set of resources is the "Getting Started" path in the Wiki, plus the Wiki altogether: https://www.bogleheads.org/wiki/Main_Page

Included in that path or selected separately are many, many Boglehead compatible books by many authors, such Bogleheads, Bogle, Ferri, Swedroe, Bernstein, etc. etc. and also other websites such as The Oblivious Investor and The White Coat Investor (for medical professionals). There is also good reading on the Early Retirement Forum (home of FireCalc).
I have already paid for course 1 out of 6 CFP courses, so I'm going to have to think about whether I should stop studying CFP stuff and switch to the Boglehead wikis.

Thank you for recommending a comprehensive path of learning.
sailaway
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by sailaway »

The thing is, when you have to Google a common abbreviation for expense ratios, it suggests you are at the very beginnings of learning about finances.

Read through the wikis here and make sure you are understanding everything about the portfolio you are posting. Load fees, expense ratios and AUM fees are all important.

Next, it sounds like this is a legacy account, which at least partially explains why it is with this advisor. What are the goals for the account. Is it meant to contribute to joint finances at all or is the primary purpose to continue the legacy? Do your parents need this money to be comfortable? It sounds like it was important to grandma that these funds be kept for your mother's independence. Paying someone a fee to do something for you feels a lot more independent than your son badgering you to turn over the keys to the castle. Don't downplay the importance of that independence, rather weigh it against the likelihood of the fees compromising said independence. Most of us (Americans, not necessarily bogleheads) could retire comfortably with a couple of million, even with fees, but of course it depends on your mother's lifestyle and spending habits.

If your parents are going to live off pensions and SS, the ideal portfolio is going to be very different that if it is entirely responsible for supporting your mother's half of a certain lifestyle that will require a 4% drawdown.
runner540
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by runner540 »

Macaroni2629 wrote: Sat Apr 01, 2023 10:09 am
dbr wrote: Sat Apr 01, 2023 10:02 am
Macaroni2629 wrote: Sat Apr 01, 2023 7:27 am My mom (age 60's) inherited this money from my grandmother and has been under the guidance of a CFP/CFA at one of the big broker dealers. This money is separate from my parents' other assets which the CFP/CFA does not manage (rough estimate of about a few million).

My mom has been working with the same CFP/CFA for 20+ years. She is not financially literate and trusts everything he says.

An obvious question would be how or why a financially illiterate person would be depending on an advisor for a small piece of the assets and leaving the larger piece unadvised.

I might assume the story is that the husband is managing the couple's assets and for reasons, possibly good reasons, the inheritance has been kept separate.

A kind of obvious question would be why the couple as a couple would not consider this money as part of the joint plan, whatever its legal status and why the husband who apparently manages the larger set of assets would not take care of the plan for the inheritance as well. If this is an issue of a relationship and money that would be one thing, but just as financial management goes it seems odd that things are as they are.

The simple question about the account itself is what are the costs, meaning AUM and fund expense ratios, and does your mom understand this. One could also ask what the couple is paying all in for their other assets, wherever they are.
I think the reason my grandma just thought there might be a chance that my dad might divorce my mom. I think parents always worry about a potential ex-spouse "stealing" family money. My parents have been married over 30 years now, and my grandma passed away about 5 years ago.

Yes, the bigger picture is that my parents are not on the same financial page. My dad doesn't trust financial advisors. My mom is financially illiterate. My mom lets my dad manage the main finances, but I guess she views extra responsibility for money that my grandma left her. My grandma also worked with this advisor.

Above all, the biggest financial question I'm getting out of all of these discussions is to find out what are the costs (I feel uncomfortable asking the CFP because I don't want him to think I don't trust him, so I'm going to hold off on asking.)? I'm going to go on Morningstar and find out the costs of all the assets and reply on this thread, thanks!
Respectfully, you need to be comfortable/confident asking the advisor about fee structures and whether he/she is a fiduciary, before you start managing money. A legit advisor will be happy to clearly answer any questions you and your mom have.

You seem to want the best for your mom. But You and your dad both potentially have interests in how/where this money is managed, that are different or conflicting with mom’s whose money it actually is. Do not commingle this with their other funds unless she has gotten professional legal advice.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

runner540 wrote: Sat Apr 01, 2023 11:10 am
Macaroni2629 wrote: Sat Apr 01, 2023 10:09 am
dbr wrote: Sat Apr 01, 2023 10:02 am
Macaroni2629 wrote: Sat Apr 01, 2023 7:27 am My mom (age 60's) inherited this money from my grandmother and has been under the guidance of a CFP/CFA at one of the big broker dealers. This money is separate from my parents' other assets which the CFP/CFA does not manage (rough estimate of about a few million).

My mom has been working with the same CFP/CFA for 20+ years. She is not financially literate and trusts everything he says.

An obvious question would be how or why a financially illiterate person would be depending on an advisor for a small piece of the assets and leaving the larger piece unadvised.

I might assume the story is that the husband is managing the couple's assets and for reasons, possibly good reasons, the inheritance has been kept separate.

A kind of obvious question would be why the couple as a couple would not consider this money as part of the joint plan, whatever its legal status and why the husband who apparently manages the larger set of assets would not take care of the plan for the inheritance as well. If this is an issue of a relationship and money that would be one thing, but just as financial management goes it seems odd that things are as they are.

The simple question about the account itself is what are the costs, meaning AUM and fund expense ratios, and does your mom understand this. One could also ask what the couple is paying all in for their other assets, wherever they are.
I think the reason my grandma just thought there might be a chance that my dad might divorce my mom. I think parents always worry about a potential ex-spouse "stealing" family money. My parents have been married over 30 years now, and my grandma passed away about 5 years ago.

Yes, the bigger picture is that my parents are not on the same financial page. My dad doesn't trust financial advisors. My mom is financially illiterate. My mom lets my dad manage the main finances, but I guess she views extra responsibility for money that my grandma left her. My grandma also worked with this advisor.

Above all, the biggest financial question I'm getting out of all of these discussions is to find out what are the costs (I feel uncomfortable asking the CFP because I don't want him to think I don't trust him, so I'm going to hold off on asking.)? I'm going to go on Morningstar and find out the costs of all the assets and reply on this thread, thanks!
Respectfully, you need to be comfortable/confident asking the advisor about fee structures and whether he/she is a fiduciary, before you start managing money. A legit advisor will be happy to clearly answer any questions you and your mom have.

You seem to want the best for your mom. But You and your dad both potentially have interests in how/where this money is managed, that are different or conflicting with mom’s whose money it actually is. Do not commingle this with their other funds unless she has gotten professional legal advice.
You're right; I just sent an email asking the advisor what his fee structure is.

You are also right; this is my mom's money. I will refrain from asking further questions. Thanks.
marcopolo
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by marcopolo »

retiredjg wrote: Sat Apr 01, 2023 7:56 am What are your questions?

You mentioned in a different post that your mother is paying $8k a year for the management of these accounts. For this $2.4 million, that is a fee of 0.33%. Very few advisors charge that little. Most charge at least 3 times that amount.

The investments could be better, but if she is happy with them, what is the problem and why are you involved?

If she has not asked for your help, you should probably stay out of it.
I am guessing the $8k is a quarterly fee, not annual.

I am confused about why the OP thinks they need to get involved. Have they been asked?
Given responses here, there is likely to be a long learning curve.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

marcopolo wrote: Sat Apr 01, 2023 2:02 pm
retiredjg wrote: Sat Apr 01, 2023 7:56 am What are your questions?

You mentioned in a different post that your mother is paying $8k a year for the management of these accounts. For this $2.4 million, that is a fee of 0.33%. Very few advisors charge that little. Most charge at least 3 times that amount.

The investments could be better, but if she is happy with them, what is the problem and why are you involved?

If she has not asked for your help, you should probably stay out of it.
I am guessing the $8k is a quarterly fee, not annual.

I am confused about why the OP thinks they need to get involved. Have they been asked?
Given responses here, there is likely to be a long learning curve.
My other family members are pushing me to probe, but I've gotten enough lashback here that I'm going to stop probing.

Yes, there is a learning curve.

Thank you for your response.
rkhusky
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by rkhusky »

The vast majority of the money appears to currently be in PONAX, a bond fund with a high 0.91% ER ($16K/yr for $1.8M) That fund will generate a lot of dividends and taxes, if in a taxable account.

Edit: PONAX also appears to have a 3.75% front load, which already cost your mom $68K. Wonder how much the advisor received? Plus there is a 0.25% 12-b1 load (don’t know if that is yearly or one-time since I don’t do loads). Hopefully your mom has owned this for 20 years and the advisor isn’t churning load fees.

The rest of the portfolio is way too complicated.

Is there a lot of buying/selling in the account? Churning can be a problem with some managed accounts.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

rkhusky wrote: Sat Apr 01, 2023 2:40 pm The vast majority of the money appears to currently be in PONAX, a bond fund with a high 0.91% ER ($16K/yr for $1.8M) That fund will generate a lot of dividends and taxes, if in a taxable account.

Edit: PONAX also appears to have a 3.75% front load, which already cost your mom $68K. Wonder how much the advisor received? Plus there is a 0.25% 12-b1 load (don’t know if that is yearly or one-time since I don’t do loads). Hopefully your mom has owned this for 20 years and the advisor isn’t churning load fees.

The rest of the portfolio is way too complicated.

Is there a lot of buying/selling in the account? Churning can be a problem with some managed accounts.
Thank you for your critiques! I didn't realize PONAX had such a high front load fee. I don't know how much the advisor received.
At least looking through 2022, there doesn't appear to be a lot of buying and selling of stuff, unless you count dividend reinvestment in the same securities?
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

Deleted contents here due to feedback from others here that this was an inappropriate use of the forums. Sincere apologies.
Last edited by Macaroni2314 on Tue Apr 04, 2023 11:10 am, edited 2 times in total.
bmcgin
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by bmcgin »

rkhusky wrote: Sat Apr 01, 2023 2:40 pm The vast majority of the money appears to currently be in PONAX, a bond fund with a high 0.91% ER ($16K/yr for $1.8M) That fund will generate a lot of dividends and taxes, if in a taxable account.

Edit: PONAX also appears to have a 3.75% front load, which already cost your mom $68K. Wonder how much the advisor received? Plus there is a 0.25% 12-b1 load (don’t know if that is yearly or one-time since I don’t do loads). Hopefully your mom has owned this for 20 years and the advisor isn’t churning load fees.

The rest of the portfolio is way too complicated.

Is there a lot of buying/selling in the account? Churning can be a problem with some managed accounts.
Etrade waves the front load fee of PONAX. The fund does have a Break Point Schedule, so most likely, there was not a 3.75% sales charge. At Etrade, it's completely free to buy.
dbr
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by dbr »

Macaroni2629 wrote: Sat Apr 01, 2023 4:56 pm

Since we have this brokerage relationship, I will not be considered a fiduciary to your mom. If she feels more comfortable with a fiduciary relationship, we can definitely move towards that direction. Everything has to be under the advisory platform.

Note the low key sales pitch to collect 1.49% (or whatever the advisory scale is) on all the assets rather than just part of them.
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

dbr wrote: Sat Apr 01, 2023 7:10 pm
Macaroni2629 wrote: Sat Apr 01, 2023 4:56 pm

Since we have this brokerage relationship, I will not be considered a fiduciary to your mom. If she feels more comfortable with a fiduciary relationship, we can definitely move towards that direction. Everything has to be under the advisory platform.

Note the low key sales pitch to collect 1.49% (or whatever the advisory scale is) on all the assets rather than just part of them.
Yeah, it feels lose-lose here...
Luckywon
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Luckywon »

What brokerage is this at?
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Macaroni2314
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

Luckywon wrote: Sat Apr 01, 2023 8:54 pm What brokerage is this at?
Sorry, why does it matter? I'm just trying to keep these posts on the more anonymous side. If it's helpful though, I'll post.
flyfishers83
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by flyfishers83 »

These things can be tricky. For the longest time I could not understand why my Uber frugal dad paid to have someone manage his investments. Think $1 hot dog package guy for the bbq, yet he’s got a significant portfolio. Somebody explained fear of loss/responsibility for that loss, and it made sense. He’s afraid of being responsible for losing money. So, he makes the maybe irrational decision of outsourcing that responsibility at significant cost.
Luckywon
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Luckywon »

Macaroni2629 wrote: Sat Apr 01, 2023 9:01 pm I'm just trying to keep these posts on the more anonymous side.
Asking partly because brokerages sometimes have well deserved reputations, and partly out of curiousity.

I can't imagine that naming the brokerage compromises your anonymity any more than publishing the full text of an email your Mom received and details of her portfolio. (I'm assuming when you say anonymity you mean you do not want the advisor to recognize you?) :confused Nevertheless, obviously do not write anything that makes you uncomfortable.
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Outer Marker »

Macaroni2629 wrote: Sat Apr 01, 2023 10:28 am I have already paid for course 1 out of 6 CFP courses, so I'm going to have to think about whether I should stop studying CFP stuff and switch to the Boglehead wikis.
You will almost certainly come out better and more financially literate by studying the wiki and recommended reading than any six part paid CFP course. Most of those guys have no idea what they are doing anyway.

Your mom's portfolio is a complicated mess. I would, however, refrain from giving her advice at this stage of your learning curve. You might consider sending her over to Vanguard's advisory service. They are good, not great, but at least are low cost and act with fiduciary responsibility.
tibbitts
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by tibbitts »

I appreciate that you posted this additional information, although still more information on expenses, and the rest of the family portfolio, is necessary.

At this point you're going to get too much conflicting information and advice for you to make much use of any of it. For example some responses are saying the portfolio is too complex, and I understand that point, but it's a managed account so the complexity isn't directly affecting anyone but the person managing it. I don't even know offhand how many funds I have in my own accounts... 30? I don't find it complex at all. Some day I probably will. At one point in this thread there was a lot of outrage over the front load for the Pimco fund, but then it turned out there was no front load. In most of these threads you have to just sit back and see how things develop and realize that some of us are going to have some personal biases or be just plain wrong, so you can't go off in twenty different directions trying to "fix" everything as soon as someone points it out.

I don't think it matters what brokerage this firm is. Whatever it is you'll get derogatory comments about any full-service brokerage. I thought the email you posted was a reasonable reply. People here are going to read ill intentions into anything coming from an AUM or commission broker. A broker could say the sky is blue and you'll get a thousand reasons why that's not true and was said with self-serving intentions.

Probably this broker isn't the optimal solution and everybody here is all about optimal solutions. But from the information so far it doesn't seem like it's necessarily the worst solution ever, either. A lot of us have had to put up with seeing parents or other relatives receive what we feel is poor service from brokers for years and years, but that doesn't mean that pushing to change that relationship is necessarily the right thing to do. So I suggest just collecting more information and avoiding knee-jerk reactions for now.
Weathering
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Weathering »

Why not slow roll your engagement with the advisor. Start by looking at the 1099 tax forms from the broker. It will give you all the fund details and you can see if the investments are giving off too much unnecessary, taxable income. Next, Ask your mother if it is ok for you to join the annual call/review with the advisor (she may say there isn’t a set call/review in which case you two could start the tradition). As a third step, choose one area of the portfolio such as the taxable account to deconstruct and Create a set of questions. Go over the questions with your mother before engaging with the advisor. Do this with a different part of the portfolio each quarter. Finally, at the 2nd annual review call, you and your mother can ask about moving toward the newly defined portfolio intent (e.g., tax efficient, or growth oriented, or legacy intended - all with low expenses) going forward.
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imbogled
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by imbogled »

Macaroni2629 wrote: Sat Apr 01, 2023 10:28 am I have already paid for course 1 out of 6 CFP courses, so I'm going to have to think about whether I should stop studying CFP stuff and switch to the Boglehead wikis.
The wiki will only take a few hours to get through. About as much time as reading a good book.

Then you take the next step by reading a good book written by the founders of this forum called, "The Boglehead's Guide to Investing--second edition" which is probably, easily found at your local library as a free download.

Here is a link to some of the highlighted quotes from one of the authors, the "King of the Bogleheads," Taylor Larimore.

viewtopic.php?f=10&t=145249

When you are ready to begin expanding your knowledge with books, start here.

https://www.bogleheads.org/wiki/Book_re ... nd_reviews

"Take the time to learn the basics of sound investing. It's really pretty simple stuff." Quoted from the Bogleheads Guide to Investing.
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by rkhusky »

Macaroni2629 wrote: Sat Apr 01, 2023 3:05 pm
rkhusky wrote: Sat Apr 01, 2023 2:40 pm The vast majority of the money appears to currently be in PONAX, a bond fund with a high 0.91% ER ($16K/yr for $1.8M) That fund will generate a lot of dividends and taxes, if in a taxable account.

Edit: PONAX also appears to have a 3.75% front load, which already cost your mom $68K. Wonder how much the advisor received? Plus there is a 0.25% 12-b1 load (don’t know if that is yearly or one-time since I don’t do loads). Hopefully your mom has owned this for 20 years and the advisor isn’t churning load fees.

The rest of the portfolio is way too complicated.

Is there a lot of buying/selling in the account? Churning can be a problem with some managed accounts.
Thank you for your critiques! I didn't realize PONAX had such a high front load fee. I don't know how much the advisor received.
At least looking through 2022, there doesn't appear to be a lot of buying and selling of stuff, unless you count dividend reinvestment in the same securities?
Good that there is not a lot of buying/selling. Dividends don’t count. Your mom must have told the advisor to put the money in something safe, hence the large bond portion. Also good to hear that front load was waived. Of course, the high ER makes up for it. Don’t know if your mom could or would want to move to a cheaper bond fund given that bond funds have dropped in value recently and there would be less cap gains to pay for a move now. You would also want to compare performance to BND over the last 20 years to see if that could be used as an argument for a switch.

But if your mom is happy with current situation, you should be wary of pushing the issue. There would be a lot to unwind if you took over the account. Taxable accounts can be tricky to make substantial changes.
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Re: My mom's portfolio under the guidance of a CFP/CFA

Post by EdNorton »

Macaroni2629 wrote: Sat Apr 01, 2023 8:16 am
HomeStretch wrote: Sat Apr 01, 2023 8:04 am Thanks for posting your mom’s AUM portfolio based on feedback you received in your other active thread about taking a CFP course and CFP exam in order to manage your mom’s portfolio found here:
viewtopic.php?t=401537

You are showing here just your mom’s AUM portfolio. It is not ideal to ask for feedback on just this portion of your mom’s finances. As she is married, it would also make sense to include your dad’s information plus other relevant info such as their ages, marginal tax rate, desired asset allocation, etc. For best feedback, edit your original post using the pencil ✏️ icon to include their complete financial picture using the “Asking Portfolio Questions” template found here:
https://www.bogleheads.org/wiki/Asking_ ... _questions

Based on what you posted, I will say it looks like your mom can simplify by reducing the number of holdings. I can’t tell if she can simplify further by reducing the number of accounts as you haven’t identified what type of accounts that Accts 1, 3 and 4 are (i.e., Taxable, Inherited Traditional IRA, etc.). As you haven’t provided ERs for each of the holdings, it’s hard to say whether your mom could lower her investment costs aside from possibly eliminating the $8k advisor fee. Which fee, on the surface, seems very reasonable for $2 million in AUM if the CFP is good.

But if you can’t obtain/provide the info requested in the “Asking Portfolio Questions”, my suggestion is that you refrain from doing any managing of the AUM portfolio as you may do more harm than good without knowing the complete picture.

As your mom is in her 60s, it is important to keep in mind that any taxable portfolio transactions could impact her Medicare premium $ and SS taxation.
This is going to take some time for me to gather all this information; I'll get back to this.

Also, sorry, what does ER stand for? And how do I find it on the monthly statements? I'm going to pore over the statements and try to understand them better.

EDIT: I read ER is expense ratio, sorry about that

Thank you for clarifying and directing me to the right place!
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Topic Author
Macaroni2314
Posts: 270
Joined: Fri Mar 31, 2023 5:31 am

Re: My mom's portfolio under the guidance of a CFP/CFA

Post by Macaroni2314 »

Outer Marker wrote: Sat Apr 01, 2023 10:15 pm
Macaroni2629 wrote: Sat Apr 01, 2023 10:28 am I have already paid for course 1 out of 6 CFP courses, so I'm going to have to think about whether I should stop studying CFP stuff and switch to the Boglehead wikis.
You will almost certainly come out better and more financially literate by studying the wiki and recommended reading than any six part paid CFP course. Most of those guys have no idea what they are doing anyway.

Your mom's portfolio is a complicated mess. I would, however, refrain from giving her advice at this stage of your learning curve. You might consider sending her over to Vanguard's advisory service. They are good, not great, but at least are low cost and act with fiduciary responsibility.
Yes thank you for the recommendation.
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