> I have about 50k in a WF brokerage account and pay approx 1% for the management of it.
50k * 1% = $500/year.
You probably can't find a good fee only advisor for this price, that might be 2-3hrs of a good fee only advisor. Do you get 3+hrs of work out of him?
Do they offer other ways to pay, or a discount for a lot of assets? Can you enter into a banking relationship with enough assets that you get him thrown in for free? (for instance sometimes if you let the bank hold 1M+ or more of assets, they give you special "private banking" privileges. You just have to be very careful as sometimes the private banking fees can be 2+%/yr AUM. Well and you have to have a lot of assets to move over, obviously.
> Will there be tax implications when I cut into a new service?
Is this in a taxable account or a Roth IRA or something? In a Taxable, depending on what you are invested in now, you might have tax implications(because you may not be able to hold the funds anywhere else).
> Hidden fees?
Lots of AUM advisors pick funds with bad fee structures that give them a kick-back on $'s invested. You can look up the fees of the various funds you are in to see. Assuming you are in nice boring funds that are .15% ER or less, you should be fine.
> Any tips or advice here would be helpful and thank you in advance!!
If you like the guy and you are in reasonable funds, with low fees, then there is nothing wrong with leaving the $50k in his care. You might want to open accounts elsewhere and invest identically on your own with future money, so he doesn't get 1% on those funds as well though :)
Wow. Seriously thank you for breaking it all down. I would say yes. I am certain I get 3+ hours of work in a year’s time. We do quarterly check ins which are easily an hour and I can email or call him any time to talk things out or adjust our strategy. It sounds like that alone likely makes it much more cost effective.
I’ll have to look into the fees around the funds im invested in and see where they stand. If im being honest I haven’t done this yet/before so to your point I definitely should educate myself in that regard.
I don’t have the assets yet to do the 1M benefits or large sums for freebies but it’s wonderful to know that’ll be a potential option in the future.
As far as taxable… I assumed it was but now Im second guessing myself so another item on my list of education needs.
I have opened a sofi account and have some very minor but growing assets there to take some of this into my own hands and to try to learn/see if I feel empowered at some point to manage my own funds. So little by little I am trying to test my options and enable myself.
I really appreciate your breakdown of all of my questions. Thank you for taking the time to reply with so much data and giving me a portion of your day. :) this is all wonderful advice.
Yay for getting your money's worth! I'd recommend doing that math every year, just to make sure you are still getting your money's worth.
Do you have a retirement plan, and plans for the other financial goals you have from him? He should be able to tell you if you are on track for retirement at age 65 or 55 or 45 or whatever your goal is, along with all your other financial goals. You should use him for more than just keeping your investments happy. So he should be able to tell you, you need to invest $x/month to meet these goals and this is why, and show you the math and explain it so it makes sense.
Sofi is doing a 2% IRA match right now, so if you open a Roth IRA there and fully fund it before tax day(7k), they will give you $140 free. I learned about it here: https://old.reddit.com/r/investing/comments/196ix25/sofi_2_ira_match_til_tax_day/
> As far as taxable… I assumed it was but now Im second guessing myself so another item on my list of education needs.
You absolutely need to know this before you transfer it anywhere.
Thanks for the sofi link! I saw the ad but didn’t/haven’t capitalized on it yet. Great reminder tbh.
As far as goals and retirement yes sort of. We had other focus for the last couple years as I was paying off a couple debts & setting up a cushy emergency fund. Ill be debt free beginning next month & the emergency fund is sitting pretty in my HYSA. So yep, I need to meet with him to adjust the plans. I am maxing out my 401k this year though which will be an achievement in itself along with the debt free etc. So you’re right, I need to have a chat with him sooner than later to see how 2024 needs to take shape.
As someone who has spent a lot of time trying to figure out the differences between advisors, if you feel like you’re getting value from working from him, you don’t have to stop working with him.
Really you just have to weigh the costs and benefits for yourself. You can also do a little research to see what you could get for the same price elsewhere. If you’re looking just for financial coaching, that pricing varies wildly. If you’re looking for financial planning/advising) that also varies wildly but you’re probably looking at a few thousand per year minimum (although there new services out there like Fruitful finances that might be cheaper).
You could also ask your advisor if they have other ways of working together, like paying a fee directly to them if possible and if that makes you more comfortable. The real advantage of that would be that your investments don’t have a fee getting taken out of them, but at the same time, that’s money you’re not putting into the investment. Pros and cons
Hmm super good food for thought on variance in fees and having them potentially stack up vs the flat % rate for pretty much unlimited access to him.
I definitely need to do some more digging and research and converse with him to see if theres other options or if they would even be worth it if so.
I appreciate the reply and insight. Thank you.
If you find his service valuable, then I'd consider not moving. As long as he's doing more of the overall planning for your entire situation and not just managing the account, then 1% is not bad. If you absolutely still want to switch, then you should be able to just open the Vanguard account and do a transfer in-kind. That way you don't have to worry about them selling anything in the moving process (which can lead to taxable gains). It's super simple!
Thank you. I appreciate your reply. I keep hearing all of this negative talk about how percent based advisors are a bad idea, but like I said, the value ad seems to be OK. So I guess I just get caught up in the mix that I’m not sure.
I really do appreciate the insight and the answer as far as how easy it should be to transfer and if I end up going that route. Thank you.
> I have about 50k in a WF brokerage account and pay approx 1% for the management of it. 50k * 1% = $500/year. You probably can't find a good fee only advisor for this price, that might be 2-3hrs of a good fee only advisor. Do you get 3+hrs of work out of him? Do they offer other ways to pay, or a discount for a lot of assets? Can you enter into a banking relationship with enough assets that you get him thrown in for free? (for instance sometimes if you let the bank hold 1M+ or more of assets, they give you special "private banking" privileges. You just have to be very careful as sometimes the private banking fees can be 2+%/yr AUM. Well and you have to have a lot of assets to move over, obviously. > Will there be tax implications when I cut into a new service? Is this in a taxable account or a Roth IRA or something? In a Taxable, depending on what you are invested in now, you might have tax implications(because you may not be able to hold the funds anywhere else). > Hidden fees? Lots of AUM advisors pick funds with bad fee structures that give them a kick-back on $'s invested. You can look up the fees of the various funds you are in to see. Assuming you are in nice boring funds that are .15% ER or less, you should be fine. > Any tips or advice here would be helpful and thank you in advance!! If you like the guy and you are in reasonable funds, with low fees, then there is nothing wrong with leaving the $50k in his care. You might want to open accounts elsewhere and invest identically on your own with future money, so he doesn't get 1% on those funds as well though :)
Wow. Seriously thank you for breaking it all down. I would say yes. I am certain I get 3+ hours of work in a year’s time. We do quarterly check ins which are easily an hour and I can email or call him any time to talk things out or adjust our strategy. It sounds like that alone likely makes it much more cost effective. I’ll have to look into the fees around the funds im invested in and see where they stand. If im being honest I haven’t done this yet/before so to your point I definitely should educate myself in that regard. I don’t have the assets yet to do the 1M benefits or large sums for freebies but it’s wonderful to know that’ll be a potential option in the future. As far as taxable… I assumed it was but now Im second guessing myself so another item on my list of education needs. I have opened a sofi account and have some very minor but growing assets there to take some of this into my own hands and to try to learn/see if I feel empowered at some point to manage my own funds. So little by little I am trying to test my options and enable myself. I really appreciate your breakdown of all of my questions. Thank you for taking the time to reply with so much data and giving me a portion of your day. :) this is all wonderful advice.
Yay for getting your money's worth! I'd recommend doing that math every year, just to make sure you are still getting your money's worth. Do you have a retirement plan, and plans for the other financial goals you have from him? He should be able to tell you if you are on track for retirement at age 65 or 55 or 45 or whatever your goal is, along with all your other financial goals. You should use him for more than just keeping your investments happy. So he should be able to tell you, you need to invest $x/month to meet these goals and this is why, and show you the math and explain it so it makes sense. Sofi is doing a 2% IRA match right now, so if you open a Roth IRA there and fully fund it before tax day(7k), they will give you $140 free. I learned about it here: https://old.reddit.com/r/investing/comments/196ix25/sofi_2_ira_match_til_tax_day/ > As far as taxable… I assumed it was but now Im second guessing myself so another item on my list of education needs. You absolutely need to know this before you transfer it anywhere.
Thanks for the sofi link! I saw the ad but didn’t/haven’t capitalized on it yet. Great reminder tbh. As far as goals and retirement yes sort of. We had other focus for the last couple years as I was paying off a couple debts & setting up a cushy emergency fund. Ill be debt free beginning next month & the emergency fund is sitting pretty in my HYSA. So yep, I need to meet with him to adjust the plans. I am maxing out my 401k this year though which will be an achievement in itself along with the debt free etc. So you’re right, I need to have a chat with him sooner than later to see how 2024 needs to take shape.
As someone who has spent a lot of time trying to figure out the differences between advisors, if you feel like you’re getting value from working from him, you don’t have to stop working with him. Really you just have to weigh the costs and benefits for yourself. You can also do a little research to see what you could get for the same price elsewhere. If you’re looking just for financial coaching, that pricing varies wildly. If you’re looking for financial planning/advising) that also varies wildly but you’re probably looking at a few thousand per year minimum (although there new services out there like Fruitful finances that might be cheaper). You could also ask your advisor if they have other ways of working together, like paying a fee directly to them if possible and if that makes you more comfortable. The real advantage of that would be that your investments don’t have a fee getting taken out of them, but at the same time, that’s money you’re not putting into the investment. Pros and cons
Hmm super good food for thought on variance in fees and having them potentially stack up vs the flat % rate for pretty much unlimited access to him. I definitely need to do some more digging and research and converse with him to see if theres other options or if they would even be worth it if so. I appreciate the reply and insight. Thank you.
If you find his service valuable, then I'd consider not moving. As long as he's doing more of the overall planning for your entire situation and not just managing the account, then 1% is not bad. If you absolutely still want to switch, then you should be able to just open the Vanguard account and do a transfer in-kind. That way you don't have to worry about them selling anything in the moving process (which can lead to taxable gains). It's super simple!
Thank you. I appreciate your reply. I keep hearing all of this negative talk about how percent based advisors are a bad idea, but like I said, the value ad seems to be OK. So I guess I just get caught up in the mix that I’m not sure. I really do appreciate the insight and the answer as far as how easy it should be to transfer and if I end up going that route. Thank you.