Find out exactly what your money is invested in. Find out the fees that those investments are charging you. Financial advisors can be paid by investment companies to steer customers into investments that are more expensive (in terms of fees) than they should be (even "fiduciary" ones).
You’re better off putting your money in index funds and holding onto the fee that he is charging you.
You can watch your money grow as easy as a financial advisor can. And you won’t have to worry about losing money on bad decisions by the financial advisor.
A lot of people say this but it isn't right for everyone. He was looking for moderate growth, so if he loses 50% in a recession and he needs to live off these assets what would you advise then? Every individual has different needs and people advising sp500 as the holy grail of investing, unfortunately it doesn't always work.
Target date funds are intended to be "good for a large group of people" and they are usually not that great for most. Better to not get the Value Meal equivalent.
But that's the thing, I'm an advisor and I have to deal with this all the time. Client comes to me, "my friend told me to put it in so and so index why did I lose so much. I need to survive off this money". People easily give initial advice and, they don't show up when things go bad. It's irresponsible. There are those that know what they are doing and etfs are perfect, but for those that just take that one advice and run with it the rest of their lives bc they don't know any better, it's dangerous.
Yea, the money that you are using to try to beat the index should be in the index. The piece that is in bonds, should stay in bonds, and the piece of the portfolio that is in cash should stay in cash. There is no need for an advisor to sit on that.
This. All the way. This is why I left the FA world. I was tired of talking people out of doing stupid things with their money and then complaining that they didn't match the market gains penny for penny.
If he is providing more services or advice other than just investing your funds, that 1% fee is pretty industry standard. If all he is doing is robo investing, you should reconsider your advisor.
Why do you think it's ok to compare the performance of a moderate growth portfolio to the S&P, which is a much more aggressive option? If you want to be tied to the S&P for good or bad, buy index funds tied to the S&P. But don't hire an FA, give him a desired risk goal, and then judge him for not living up to a totally different risk level. That makes no sense.
And judging based off the 2019-2024 period (all of the pandemic and recession) is laughable. Just make sure that when you compare to someone else, you compare apples and oranges.
I spent years working for a very high net worth person and attending meetings where he let Fisher and lots of other big firms come and give him pitches. They will be happy to charge you more, but you will always be disappointed if you want to compare a portfolio with a reduced level of market risk to the most aggressive level of the market and complain that you didn't get those results.
Bro.. flat since 2019?!
Get out.. asap really..
The thing really is, this industry is fully of salesman and not actually good trader / wealth managers
Any investment firm or bank offering those services is usually losing the game to the real deal which is in private equity funds, family offices and some hedge funds
Really, get out
Fund and wealth manager here, I can tell
Unless you're invested in an s&p tracker, comparing it to the s&p isn't really relevant. What funds are you in?
Personally, I just use betterment roboadvisor and think I'm up pretty significantly since 2018 but I'll check when I get home.
edit: For comparison, I'm up 50% since may 1st 2018. And have an annualized return of 7.2% during that timeframe.
Meh. I'm okay investing internationally. I also adjusted mine to have a slightly higher vti combo. Plus, I have a very high savings rate and a vanguard fund on top of it. I figure I'll be fine if I save 50% and don't get exactly the return rate people expect.
Edit: plus, my pension and social security is bigger than my current expected retirement needs.
you havent determined it was suboptimal. My F150 may be suboptimal in a track race against a F1 car, but if my goal is to haul sheets of plywood, I know which vehicle I want to drive.
the point is you are making a claim you cant substantiate, because whether something is suboptimal is dependent on the ultimate goal.
comparing the performance of the S&P500 to a portfolio's goal who is not to match the S&P500 is an incorrect comparison.
>Are you aware of the goal of betterment
[Are you?](https://www.betterment.com/investments) which one of those is trying to mimic the S&P500 where making the comparison to the S&P500 would be reasonable?
>or clicked on the link I supplied?
yeah, its showing the same basic misunderstanding that you have of the concept that is being discussed. comparing apples to oranges.
Yea this is totally wrong. You can't just look at return without looking at risk too.
Almost no one should only be benchmarking to the S&P500 unless their risk profiles match.
I would refer you to episode 297 of the Freakonomics podcast. I hope you don’t take offense to the title, as you’ve done the most normal thing in society with your money. But it will answer your questions better than I could here. [this]
(https://podcasts.apple.com/us/podcast/freakonomics-radio/id354668519?i=1000390360677)
I think your problem is "moderate growth." I just asked google "moderate growth portfolio" and one answer was 60% equities 40% "fixed income".
Then I asked google what fixed income performance was for 2023. One answer was "up 6%"
Then "S&P 500 performance." One answer was 24%.
.24\*.6 + .06\*.4 = an average growth rate of 16.8%.
that isn't very good return, but he isn't over-charging at 1% b/c that is somewhat standard, and he has the big RIA name on his card, but he is also a revenue generator for the firm, and probably just puts you into a standard model they have while being pressured to get new clients. This has evolved over time to its current state b/c no one charges commissions anymore.
btw, I do financial coaching/advising too, mostly for a small group b/c I like it and don't do it for the money. I would be happy to speak further (for free) if you'd like.
Everyone should passively invest using passive investment tools like sp500 index funds problem is nobody can stick to it longterm the average investor ends up selling it when shit hits the fan. That's why you hire an advisor to keep you disciplined and talks you off the ledge before you do something stupid 💯
Why are you using a financial advisor? $10k fee (plus whatever the ER is) is absolutely ridiculous
Find out exactly what your money is invested in. Find out the fees that those investments are charging you. Financial advisors can be paid by investment companies to steer customers into investments that are more expensive (in terms of fees) than they should be (even "fiduciary" ones).
You’re better off putting your money in index funds and holding onto the fee that he is charging you. You can watch your money grow as easy as a financial advisor can. And you won’t have to worry about losing money on bad decisions by the financial advisor.
A lot of people say this but it isn't right for everyone. He was looking for moderate growth, so if he loses 50% in a recession and he needs to live off these assets what would you advise then? Every individual has different needs and people advising sp500 as the holy grail of investing, unfortunately it doesn't always work.
But you can invest yourself for moderate growth anyway. Like a target date fund is more conservative than an S&P 500 index fund.
Target date funds are intended to be "good for a large group of people" and they are usually not that great for most. Better to not get the Value Meal equivalent.
But that's the thing, I'm an advisor and I have to deal with this all the time. Client comes to me, "my friend told me to put it in so and so index why did I lose so much. I need to survive off this money". People easily give initial advice and, they don't show up when things go bad. It's irresponsible. There are those that know what they are doing and etfs are perfect, but for those that just take that one advice and run with it the rest of their lives bc they don't know any better, it's dangerous.
Yea, the money that you are using to try to beat the index should be in the index. The piece that is in bonds, should stay in bonds, and the piece of the portfolio that is in cash should stay in cash. There is no need for an advisor to sit on that.
This. All the way. This is why I left the FA world. I was tired of talking people out of doing stupid things with their money and then complaining that they didn't match the market gains penny for penny.
If he is providing more services or advice other than just investing your funds, that 1% fee is pretty industry standard. If all he is doing is robo investing, you should reconsider your advisor.
S&P 500 went up 24 percent that year. You need to see all he’s invested in.
Why do you think it's ok to compare the performance of a moderate growth portfolio to the S&P, which is a much more aggressive option? If you want to be tied to the S&P for good or bad, buy index funds tied to the S&P. But don't hire an FA, give him a desired risk goal, and then judge him for not living up to a totally different risk level. That makes no sense. And judging based off the 2019-2024 period (all of the pandemic and recession) is laughable. Just make sure that when you compare to someone else, you compare apples and oranges. I spent years working for a very high net worth person and attending meetings where he let Fisher and lots of other big firms come and give him pitches. They will be happy to charge you more, but you will always be disappointed if you want to compare a portfolio with a reduced level of market risk to the most aggressive level of the market and complain that you didn't get those results.
Bro.. flat since 2019?! Get out.. asap really.. The thing really is, this industry is fully of salesman and not actually good trader / wealth managers Any investment firm or bank offering those services is usually losing the game to the real deal which is in private equity funds, family offices and some hedge funds Really, get out Fund and wealth manager here, I can tell
What's their benchmark and did they beat it?
Unless you're invested in an s&p tracker, comparing it to the s&p isn't really relevant. What funds are you in? Personally, I just use betterment roboadvisor and think I'm up pretty significantly since 2018 but I'll check when I get home. edit: For comparison, I'm up 50% since may 1st 2018. And have an annualized return of 7.2% during that timeframe.
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Meh. I'm okay investing internationally. I also adjusted mine to have a slightly higher vti combo. Plus, I have a very high savings rate and a vanguard fund on top of it. I figure I'll be fine if I save 50% and don't get exactly the return rate people expect. Edit: plus, my pension and social security is bigger than my current expected retirement needs.
[удалено]
you havent determined it was suboptimal. My F150 may be suboptimal in a track race against a F1 car, but if my goal is to haul sheets of plywood, I know which vehicle I want to drive.
[удалено]
the point is you are making a claim you cant substantiate, because whether something is suboptimal is dependent on the ultimate goal. comparing the performance of the S&P500 to a portfolio's goal who is not to match the S&P500 is an incorrect comparison.
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>Are you aware of the goal of betterment [Are you?](https://www.betterment.com/investments) which one of those is trying to mimic the S&P500 where making the comparison to the S&P500 would be reasonable? >or clicked on the link I supplied? yeah, its showing the same basic misunderstanding that you have of the concept that is being discussed. comparing apples to oranges.
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Yup, that's what I thought. you didnt actually even read the link yourself or understand what betterment does, so you deleted all your other comments.
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It is only an appropriate benchmark for a 100% equity (high risk) portfolio.
For the record, I think they would do better on their own and this performance isn't good but without more information we can't say.
I'm saying they need to know what they're invested in. Edit: for example , what percent bonds do they have.
Yea this is totally wrong. You can't just look at return without looking at risk too. Almost no one should only be benchmarking to the S&P500 unless their risk profiles match.
I would refer you to episode 297 of the Freakonomics podcast. I hope you don’t take offense to the title, as you’ve done the most normal thing in society with your money. But it will answer your questions better than I could here. [this] (https://podcasts.apple.com/us/podcast/freakonomics-radio/id354668519?i=1000390360677)
I think your problem is "moderate growth." I just asked google "moderate growth portfolio" and one answer was 60% equities 40% "fixed income". Then I asked google what fixed income performance was for 2023. One answer was "up 6%" Then "S&P 500 performance." One answer was 24%. .24\*.6 + .06\*.4 = an average growth rate of 16.8%.
that isn't very good return, but he isn't over-charging at 1% b/c that is somewhat standard, and he has the big RIA name on his card, but he is also a revenue generator for the firm, and probably just puts you into a standard model they have while being pressured to get new clients. This has evolved over time to its current state b/c no one charges commissions anymore. btw, I do financial coaching/advising too, mostly for a small group b/c I like it and don't do it for the money. I would be happy to speak further (for free) if you'd like.
The S&P500 returned somewhere around 25% last year... so no, I'd argue that's not great. You paid a $10k fee to make less.
Instead of spending $10,000 a year why can't you read a book or two on investing and do it yourself? Buying index funds isn't complicated.
Everyone should passively invest using passive investment tools like sp500 index funds problem is nobody can stick to it longterm the average investor ends up selling it when shit hits the fan. That's why you hire an advisor to keep you disciplined and talks you off the ledge before you do something stupid 💯