Looking for advice? Advisor proposing 1% on $3M AUM

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logiclife
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by logiclife »

boltonguy wrote: Thu Jun 08, 2023 10:07 am Hi,

I just joined this forum today as I'm looking for some educated advice and based on what I've read so far I think I'm likely to get it here.

I am 53, employed full time with $3M in cash & investments (70% retirement / 30% other). I have been contributing to my 401k which was in the Fidelity Growth Fund and have also been investing a bit on the side in dividend-focused ETFs. I am 100% cash as I rolled my 401k into an IRA and moved non-retirement assets into cash 4 months ago, looking to wait for a better opportunity to get back into the market. Qualified funds are in a MM fund returning 5% and non-qualified funds are in a preferred deposit account at Merrill earning 4.7%

I took a call from a Merrill Financial Solutions Advisor - after a few discussions he has proposed moving me into several funds that are 6 months old so no performance history and not beating the comparative index net of fees including a commodities fund which has just seen abysmal and volatile performance over the past 10 years (excepting last 2 years which makes the yield look stunning). He has also proposed a 12-month treasury ladder. Cost is 1% AUM for the funds (on top of internal fund expenses) and .25% for the treasury ladder.

He seems like a nice guy but $30k a year seems like a lot where I think I may be able to do better myself. For example, using a fund screener to find active funds or etfs with a consistent performance history, and a bond fund or diy ladder with ishares etfs.

This is probably a DIY crowd so maybe I just need to type this out to see that I dont really feel like I'm getting anything for that $30k. I dont feel like I'm getting access to any funds or strategies I couldnt get on this forum or through a robo-advisor, etc. Thoughts?

Thank you!

Why dont you consider a fee-only, a win-win?
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by coffeeblack »

boltonguy wrote: Thu Jun 08, 2023 10:07 am Hi,

I just joined this forum today as I'm looking for some educated advice and based on what I've read so far I think I'm likely to get it here.

I am 53, employed full time with $3M in cash & investments (70% retirement / 30% other). I have been contributing to my 401k which was in the Fidelity Growth Fund and have also been investing a bit on the side in dividend-focused ETFs. I am 100% cash as I rolled my 401k into an IRA and moved non-retirement assets into cash 4 months ago, looking to wait for a better opportunity to get back into the market. Qualified funds are in a MM fund returning 5% and non-qualified funds are in a preferred deposit account at Merrill earning 4.7%

I took a call from a Merrill Financial Solutions Advisor - after a few discussions he has proposed moving me into several funds that are 6 months old so no performance history and not beating the comparative index net of fees including a commodities fund which has just seen abysmal and volatile performance over the past 10 years (excepting last 2 years which makes the yield look stunning). He has also proposed a 12-month treasury ladder. Cost is 1% AUM for the funds (on top of internal fund expenses) and .25% for the treasury ladder.

He seems like a nice guy but $30k a year seems like a lot where I think I may be able to do better myself. For example, using a fund screener to find active funds or etfs with a consistent performance history, and a bond fund or diy ladder with ishares etfs.

This is probably a DIY crowd so maybe I just need to type this out to see that I dont really feel like I'm getting anything for that $30k. I dont feel like I'm getting access to any funds or strategies I couldnt get on this forum or through a robo-advisor, etc. Thoughts?

Thank you!
You know you haven't really stated what you want.
"looking to wait for a better opportunity to get back into the market" is a bad idea because you don't know and no one know when a better opportunity is to get into the market. So a better opportunity time is always with a proper asset allocation.

You need to set some goals. When do you need the money? When are you retiring? How much in stock/bonds do you want? How much do you want to hold in cash?

I wouldn't chase funds and yield.

As a general rule I would say in my opinion you would be a good candidate for one or two combined fund strategy. You could do it in your 401K as well as your taxable and perhaps even mirror them. Consider planvision advisors.
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by Juice3 »

boltonguy wrote: Thu Jun 08, 2023 12:13 pm Thanks for all the advice - would it be a dumb idea to just put it all in a Vanguard target retirement 2035 fund and let them manage it?
No, not a dumb idea. But only you know you.

The Boglehead way does minimize the individual work but it does not eliminate it. You need to adjust as circumstances of your life evolve. Vanguard target date funds are I believe a 4 fund design with Total Market, Total International Market, Total Bond, and Total International Bond. I find them a bit to tilted to international but that is me.

If you are suggesting a target date fund so you can just forget about it until 2035 ... you need to be sure your circumstances align to their assumptions. I believe the VG target dates funds just have a glide path based on year remaining to target retirement, increasing FI holdings as that target approaches.
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hand
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by hand »

boltonguy wrote: Thu Jun 08, 2023 10:07 am
This is probably a DIY crowd so maybe I just need to type this out to see that I dont really feel like I'm getting anything for that $30k. I dont feel like I'm getting access to any funds or strategies I couldnt get on this forum or through a robo-advisor, etc. Thoughts?
You're right... however you are missing the very real risk that on top of the 1% your advisor either churns your accounts to maximize commissions, pushes to sell you investments or insurance you don't need, or otherwise takes advantage of you as you age / become less attentive.
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boltonguy
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First time portfolio

Post by boltonguy »

[Thread merged into here --admin LadyGeek]

So I took the forum's advice and emailed the advisor from merrill back and told him I'm going in a different direction (meaning not paying him 1% AUM per year). I did some reading and built a basic 3 fund portfolio for my IRA. Is it really this easy?

I'm 53 and would like to retire at 67. How does this look:
Total Market ...........ITOT ETF @ 63%
Total Int'l Market ......IXUS ETF @ 12 %
Total Bond ..............AGG ETF @ 25%
With this approach I annually adjust my bond/equity exposure as I approach retirement.

Option #2 is to just put the money in Vanguard Target Retirement 2035 Fund (roughly 70% equity / 28% bonds).

Thoughts?
Ependytis
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by Ependytis »

Not only will you be paying 1% of your assets ($30K) for the advice, you'll also be paying for managed funds with an average fee of 0.8% ($27K), and likely more taxes than an EFT for those managed funds not to mention the buy/ask spread for individual stocks possibly or portfolio churning. Since you are already DYI and doing fine, I am not sure what you are questioning. If I understand you correctly, you're basically saying should I pay 10 times more for a service that I can do myself. The service that I can do myself, basically only takes three or four hours a year.
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Re: First time portfolio

Post by arcticpineapplecorp. »

good work. either option is fine. just depends on if you want to rebalance (and will be able to when the s-it hits the fan) using the individual funds. If not, the target date is a good all in one solution (for retirement accounts).

is it that easy? Well, investing should be simple, but it's not always easy, because of behavioral issues and cognitive biases. But if you can stick with your Investment Policy statement you'll do fine.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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Re: First time portfolio

Post by 123 »

Yes, it really is that simple.

As your appreciation for taxes increases you'll become aware that fixed income holdings are best held in retirement accounts and that stock holdings are best held in Roth or taxable accounts. Of course this all depends on how much investment space exists in the various kinds of accounts. The disadvantage of holding stocks in tax-deferred account is that any gains are taxed as ordinary income (when you take a distribution) whereas in taxable accounts you may get the advantage of long-term capital gains tax benefits.
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by LadyGeek »

boltonguy - In order to provide appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original thread. If you have any questions, ask them here.

(Thanks to the member who reported the post and provided a link to this thread.)
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Re: First time portfolio

Post by Stinky »

boltonguy wrote: Thu Jun 08, 2023 6:05 pm [Thread merged into here --admin LadyGeek]

So I took the forum's advice and emailed the advisor from merrill back and told him I'm going in a different direction (meaning not paying him 1% AUM per year). I did some reading and built a basic 3 fund portfolio for my IRA. Is it really this easy?

I'm 53 and would like to retire at 67. How does this look:
Total Market ...........ITOT ETF @ 63%
Total Int'l Market ......IXUS ETF @ 12 %
Total Bond ..............AGG ETF @ 25%
With this approach I annually adjust my bond/equity exposure as I approach retirement.
Yes, it really is this easy.

And don’t jump into and out of the market. Stay the course.
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cashmoney
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by cashmoney »

Pizza_and_Beer wrote: Thu Jun 08, 2023 10:52 am
TomatoTomahto wrote: Thu Jun 08, 2023 10:45 am Welcome to the forum!

You will find that you can manage your money without having to pay 1% to anyone. I am as dumb as a sack of hammers and do a really good job for my family.

Read up on a “three fund portfolio” on the site.
+1

Thats what i did when i first found this sight but honestly i wish had just done two funds. Also wish i had a crystal ball.
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by Wanderingwheelz »

GaryA505 wrote: Thu Jun 08, 2023 3:30 pm
Wanderingwheelz wrote: Thu Jun 08, 2023 3:18 pm I might be the only person the reply to this who was an ML advisor for a long time.

Don’t do it. As had been suggested, read up on the 3 Fund Portfolio. That said, stop doing counterproductive things like going to cash because you want to buy a lower prices later. With assets like you have it doesn’t matter if you get lucky and can buy back in a little cheaper at some point down the road. Over time you’ll probably lose more than win and those mistakes will most likely cost you a lot of money.
Some people don't have the personality or discipline for DIY investing. If someone has any of the following traits, they would probably be better off with an advisor (even at 1% AUM):
- Can't sleep at night worrying about their investments going down.
- Can't resist market timing.
- Can't keep their emotions out of their investment decisions.
- Invest too conservatively because they are afraid of market risk.
- Think the stock market is gambling.
- Want to sell everything when the market takes a tumble.
- Want to buy everything when the market is going up.
- Think Dave Ramsey is a genius.

As a former ML advisor I'm sure you met many clients with some of these traits. Some people are their own worst enemy and need an advisor to keep them from shooting themselves in the foot.
I did. Boy did I ever.

Here’s the thing though. They never change, no matter how much time and energy you put into trying to help. At some point you’re happy to see them go, either because they move someplace else or you give their accounts away.

There’s this myth that an advisor can protect people from their own harmful traits. They cannot. It’s true that certain types of investors can benefit from a helper, but not the investors you just described. Those people are a nightmare, without exception.
Being wrong compounds forever.
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windaar
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by windaar »

My widowed MIL was paying tens of thousands per year for "management" of her inherited retirement accounts. She put it all in a VG target fund and now gets to pocket that cash, AND is saving tons every year on fees/expenses as well. No need to pay the "nice guy" salesman.
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celia
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by celia »

boltonguy wrote: Thu Jun 08, 2023 12:13 pm Thanks for all the advice - would it be a dumb idea to just put it all in a Vanguard target retirement 2035 fund and let them manage it?
The problem with this is that it is not like what you are thinking. The Target funds are not “managed” either as they are just funds that hold other “index” funds. Then if you want a specific x% in stock funds and y% in bond funds, it will be impossible to balance your accounts to get that.

If you look at the description of this fund, this shows you the funds it holds. As you get closer to the Target year, the balance between stocks and bonds shifts to more bonds.

https://investor.vanguard.com/investmen ... omposition

With your amount of assets, you should also be looking to make your portfolio more tax-efficient instead of investing the same in each account. Your Roth accounts should only hold stock funds to maximise future tax-free growth. Tax-deferred accounts should hold your bonds since the interest they earn is not taxed favourably like dividends and Long Term Capital Gains are. Taxable accounts should hold foreign funds you might want because you might be eligible for the Foreign Tax Credit. However, your space in each type of account usually doesn’t match your desired Asset Allocation (ratio of stocks to bonds). In that case, just do the best you can.

boltonguy wrote: Thu Jun 08, 2023 10:07 am I am 53, employed full time with $3M in cash & investments (70% retirement / 30% other). . .

I am 100% cash as I rolled my 401k into an IRA . . .
If you are employed and have a 401K, how were you able to roll it into an IRA before age 59.5?

Was this the ”advisor’s” idea?

(I’m sorry this is off-topic but something doesn’t sound right to me.)
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by GaryA505 »

Wanderingwheelz wrote: Thu Jun 08, 2023 7:42 pm
GaryA505 wrote: Thu Jun 08, 2023 3:30 pm
Wanderingwheelz wrote: Thu Jun 08, 2023 3:18 pm I might be the only person the reply to this who was an ML advisor for a long time.

Don’t do it. As had been suggested, read up on the 3 Fund Portfolio. That said, stop doing counterproductive things like going to cash because you want to buy a lower prices later. With assets like you have it doesn’t matter if you get lucky and can buy back in a little cheaper at some point down the road. Over time you’ll probably lose more than win and those mistakes will most likely cost you a lot of money.
Some people don't have the personality or discipline for DIY investing. If someone has any of the following traits, they would probably be better off with an advisor (even at 1% AUM):
- Can't sleep at night worrying about their investments going down.
- Can't resist market timing.
- Can't keep their emotions out of their investment decisions.
- Invest too conservatively because they are afraid of market risk.
- Think the stock market is gambling.
- Want to sell everything when the market takes a tumble.
- Want to buy everything when the market is going up.
- Think Dave Ramsey is a genius.

As a former ML advisor I'm sure you met many clients with some of these traits. Some people are their own worst enemy and need an advisor to keep them from shooting themselves in the foot.
I did. Boy did I ever.

Here’s the thing though. They never change, no matter how much time and energy you put into trying to help. At some point you’re happy to see them go, either because they move someplace else or you give their accounts away.

There’s this myth that an advisor can protect people from their own harmful traits. They cannot. It’s true that certain types of investors can benefit from a helper, but not the investors you just described. Those people are a nightmare, without exception.
I had a coworker who turned his account over to Fidelity. He claimed it was totally managed by the advisor and he could not change anything himself.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by Mel Lindauer »

GaryA505 wrote: Thu Jun 08, 2023 3:30 pm
Wanderingwheelz wrote: Thu Jun 08, 2023 3:18 pm I might be the only person the reply to this who was an ML advisor for a long time.

Don’t do it. As had been suggested, read up on the 3 Fund Portfolio. That said, stop doing counterproductive things like going to cash because you want to buy a lower prices later. With assets like you have it doesn’t matter if you get lucky and can buy back in a little cheaper at some point down the road. Over time you’ll probably lose more than win and those mistakes will most likely cost you a lot of money.
Some people don't have the personality or discipline for DIY investing. If someone has any of the following traits, they would probably be better off with an advisor (even at 1% AUM):
- Can't sleep at night worrying about their investments going down.
- Can't resist market timing.
- Can't keep their emotions out of their investment decisions.
- Invest too conservatively because they are afraid of market risk.
- Think the stock market is gambling.
- Want to sell everything when the market takes a tumble.
- Want to buy everything when the market is going up.
- Think Dave Ramsey is a genius.

As a former ML advisor I'm sure you met many clients with some of these traits. Some people are their own worst enemy and need an advisor to keep them from shooting themselves in the foot.
While some investors may well need an advisor to deal with some (or all) of the issues you've mentioned, they certainly don't need to pay 1% when Vanguard's Personal Advisory Service (PAS) charges so much less.
Best Regards - Mel | | Semper Fi
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by Adam11 »

Glockenspiel wrote: Thu Jun 08, 2023 11:31 am
boltonguy wrote: Thu Jun 08, 2023 10:07 am I am 100% cash as I rolled my 401k into an IRA and moved non-retirement assets into cash 4 months ago, looking to wait for a better opportunity to get back into the market.
You've already missed the boat. Stocks are up 11% in the past three months. If you plan on continuing to be a market-timer it may be worthwhile to pay Vanguard Personal Advisory Services 0.3% to manage your investments.
THIS! Boltonguy, your crystal ball is broken! You would’ve been up at least 3% if you hadn’t sold. VTSAX and chill, OP. Six-figures gone poof by trying to time the market when working with $3M, smh. Seriously, pick something reasonable that you can live with, lock yourself out of your account, and quit futzing around with it.
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Re: First time portfolio

Post by dogagility »

boltonguy wrote: Thu Jun 08, 2023 6:05 pm I did some reading and built a basic 3 fund portfolio for my IRA. Is it really this easy?
Yes, it is.

The work involved is defining your goals and an appropriate asset allocation. The hard part is psychological... not tinkering with your portfolio, not performance chasing and not panic selling.
I'm 53 and would like to retire at 67. How does this look:
Total Market ...........ITOT ETF @ 63%
Total Int'l Market ......IXUS ETF @ 12 %
Total Bond ..............AGG ETF @ 25%
With this approach I annually adjust my bond/equity exposure as I approach retirement.
Those are great, low cost, broad market funds. The asset allocation is reasonable for many people and many financial situations.
Option #2 is to just put the money in Vanguard Target Retirement 2035 Fund (roughly 70% equity / 28% bonds).
Also fine. There are many roads to Dublin. The differences of this fund compared to the three fund portfolio above are the automatic rebalancing, the inclusion of international bonds, and the automatic asset allocation glide slope in the coming decades.
Make sure you check out my list of certifications. The list is short, and there aren't any. - Eric 0. from SMA
Target2019
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Re: First time portfolio

Post by Target2019 »

boltonguy wrote: Thu Jun 08, 2023 6:05 pm [Thread merged into here --admin LadyGeek]

So I took the forum's advice and emailed the advisor from merrill back and told him I'm going in a different direction (meaning not paying him 1% AUM per year). I did some reading and built a basic 3 fund portfolio for my IRA. Is it really this easy?

I'm 53 and would like to retire at 67. How does this look:
Total Market ...........ITOT ETF @ 63%
Total Int'l Market ......IXUS ETF @ 12 %
Total Bond ..............AGG ETF @ 25%
With this approach I annually adjust my bond/equity exposure as I approach retirement.

Option #2 is to just put the money in Vanguard Target Retirement 2035 Fund (roughly 70% equity / 28% bonds).

Thoughts?
The stock-to-bond ratio changes in the 2035 Fund as you approach 2035.

DIY will mean you monitor the allocations on some schedule (quarterly?), and adjust if they drift too far out of range. You also have a decision as to whether you want to be 75% stocks at retirement, or something lower (as the target fund does for you automatically.) You might reduce stock exposure 1% a year for 12 years, or something like that.
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by muffins14 »

boltonguy wrote: Thu Jun 08, 2023 10:07 am
He seems like a nice guy but $30k a year seems like a lot
Correct. You’re done now.

You don’t need to give 30k to everyone who is nice and puts in the correct effort at their job.
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Re: First time portfolio

Post by muffins14 »

boltonguy wrote: Thu Jun 08, 2023 6:05 pm [Thread merged into here --admin LadyGeek]

Is it really this easy?

I'm 53 and would like to retire at 67. How does this look:
Total Market ...........ITOT ETF @ 63%
Total Int'l Market ......IXUS ETF @ 12 %
Total Bond ..............AGG ETF @ 25%
With this approach I annually adjust my bond/equity exposure as I approach retirement.
Yep, you’re all done now ;)
Crom laughs at your Four Winds
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boltonguy
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by boltonguy »

celia wrote: Thu Jun 08, 2023 8:22 pm
boltonguy wrote: Thu Jun 08, 2023 10:07 am I am 53, employed full time with $3M in cash & investments (70% retirement / 30% other). . .

I am 100% cash as I rolled my 401k into an IRA . . .
If you are employed and have a 401K, how were you able to roll it into an IRA before age 59.5?

Was this the ”advisor’s” idea?

(I’m sorry this is off-topic but something doesn’t sound right to me.)
Sorry - changed jobs recently and rolled that 401k into an IRA.
I think that is a standard practice as my new employer's 401k has very limited choices.
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goingup
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Re: First time portfolio

Post by goingup »

boltonguy wrote: Thu Jun 08, 2023 6:05 pm [Thread merged into here --admin LadyGeek]

So I took the forum's advice and emailed the advisor from merrill back and told him I'm going in a different direction (meaning not paying him 1% AUM per year). I did some reading and built a basic 3 fund portfolio for my IRA. Is it really this easy?

I'm 53 and would like to retire at 67. How does this look:
Total Market ...........ITOT ETF @ 63%
Total Int'l Market ......IXUS ETF @ 12 %
Total Bond ..............AGG ETF @ 25%
With this approach I annually adjust my bond/equity exposure as I approach retirement.

Option #2 is to just put the money in Vanguard Target Retirement 2035 Fund (roughly 70% equity / 28% bonds).

Thoughts?
Option 1 is great.

Do it now and don't try to time the Market. Had you asked this forum before rolling into all cash, you have been advised NOT to roll your 401K into cash and wait for some magical opportune time to buy funds. Always stay invested. :beer
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Re: First time portfolio

Post by Glockenspiel »

boltonguy wrote: Thu Jun 08, 2023 6:05 pm

I'm 53 and would like to retire at 67. How does this look:
Total Market ...........ITOT ETF @ 63%
Total Int'l Market ......IXUS ETF @ 12 %
Total Bond ..............AGG ETF @ 25%

Thoughts?
Looks great to me. Just put all your money in at those ratios and don't look at it. Don't fret over the daily ups and downs of the market. Take financial news with a grain of salt. The amount of time you spend in the market is more important than trying to time the market.
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by Doctor Rhythm »

Your hypothetical portfolio is within the range of what most here would consider reasonable for someone your age. It’s probably close to what a TDF 2035 holds.

Keep in mind the inherent risk however. If you had that portfolio at the beginning of 2022, your $3M would have dropped by $700,000 at the bottom of the market later in the year. You need to be sure this is something you can handle, both financially and emotionally. Are you going to bail out when this kind of loss happens again?
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Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by Grt2bOutdoors »

Let’s say $3mm is your number. You reached it without paying 1% AUM to an intermediary all this time you’ve been investing. Why change now?

I’m a nice guy, but I don’t charge my family or friends $30k for solicited advice. Just a little bit of reading on your part and you’ll quickly see that 85% of fund managers fail to beat their own benchmarks. So, maybe this advisor has access to the highest 15 percent in the asset management space but even then, how many get eliminated over time? Spending $30k per year is an expensive lesson to find out. Expenses matter, work another 10 years and now you are talking about $300k plus. You could buy a place to live in many parts of the world for that kind of money.

I won’t speak on your inner compass market timing, if you accumulated $3mm at age 53, you’ve done plenty right to get there and as I said, that could be your number, you don’t need to lose it so you exited. You invest according to your risk tolerance, not others.
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Re: First time portfolio

Post by cchrissyy »

boltonguy wrote: Thu Jun 08, 2023 6:05 pm [Thread merged into here --admin LadyGeek]

So I took the forum's advice and emailed the advisor from merrill back and told him I'm going in a different direction (meaning not paying him 1% AUM per year). I did some reading and built a basic 3 fund portfolio for my IRA. Is it really this easy?

I'm 53 and would like to retire at 67. How does this look:
Total Market ...........ITOT ETF @ 63%
Total Int'l Market ......IXUS ETF @ 12 %
Total Bond ..............AGG ETF @ 25%
With this approach I annually adjust my bond/equity exposure as I approach retirement.

Option #2 is to just put the money in Vanguard Target Retirement 2035 Fund (roughly 70% equity / 28% bonds).

Thoughts?
welcome!

yes it really is that easy and both of these ideas are fine for your IRA.

i suggest you go with option 2 because it will balance itself. balancing is very little work, perhaps 15 minutes once per year, but, given that you pulled to cash, i would be concerned that any time you touch the portfolio for rebalancing could become an opportunity to abandon your plan and tinker based on market news or your future thoughts/feelings. all investors are better off avoiding that mistake, and in your case, the target fund in an IRA will protect you from some of those openings.
60-20-20 us-intl-bond
Farmboyslim83
Posts: 162
Joined: Sun Oct 07, 2012 12:06 pm

Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by Farmboyslim83 »

Taylor Larimore wrote: Thu Jun 08, 2023 2:46 pm boltonguy:

Many Bogleheads use The Three-Fund Portfolio which seldom requires an expensive advisor. You can read its many benefits here:

viewtopic.php?t=88005

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The Three-Fund Portfolio will help you to develop a sound asset allocation strategy, make smart investment selections, and guide the implementation of your plan." -- "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk."

Boltonguy,
You’ve now heard from possibly the greatest financial advisor on earth. Taylor was not always a three-fund guy, his insatiable desire for simplicity led him to it. Read the wiki, and join the fold.


goblue100
Posts: 1729
Joined: Sun Dec 01, 2013 9:31 am

Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by goblue100 »

You are better off without a manager. Scott Burns is one of my favorite financial columnists. Here is a recent column on money managers:
The news wasn’t good for money managers last month. Not that they paid any attention. New research indicated that professional money managers would provide superior results by doing absolutely nothing.

As you will soon see, there is no hyperbole here.

This is sad for managers. It leaves them in an uncomfortable position. They can only hope that high compensation with no heavy lifting offsets the futility of their work.

The story here is simple. New research shows that making no investment changes whatsoever is vastly superior to what money managers do – make decisions that result in investment changes.
https://scottburns.com/sloth-wins-again/

Had you hired a manager, it would have been an interesting exercise to see how long it took him to turn one of your millions into his million.
"Confusion has its cost" - Crosby, Stills and Nash
Rex66
Posts: 2955
Joined: Tue Aug 04, 2020 5:13 pm

Re: Looking for advice? Advisor proposing 1% on $3M AUM

Post by Rex66 »

I’ve never come across someone who the advisor really saved the client from market timing.

They always jump to new funds like this guy or gal which I’m sure they are incentivized to promote.

They typically also don’t like nervous clients who are afraid of losing money and put them in an annuity instead of getting the client to stay the course. Less conversations and a commission to boot.

My sister is a timer and her last advisor was a worse timer than her. Sold out of things right before they went up.
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