Posted: 10/2/2025 5:16:19 PM EDT
[Last Edit: M-231][Edited]
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Per Arfcom's advice, I'm reading Bogle's books, and they sound....sound. I've largely rolled my funds into S&P etf's, and I watch that expense ratio. I've stepped out of the buying individual stocks entirely. I was at a social function yesterday and got talking to guy that's a financial advisor (incidentally, I wasn't looking for one), and he states that generally charges 1 to 1.5% for etf management, but doesn't charge if there's a specific stock I want to add to my portfolio. Everything he said made sense (buy the dip, don't let emotions guide your actions, Time in vs timing, etc). I'm still learning about tax advantages and reading, but my goals at this time are max'ing my Roth and then an individual IRA with my pocket change, and contributing to my 401k. He was pretty honest about people that watch their own funds not really needing him, and that he was better for people that don't want to think about it. If someone is babysitting their funds in a Fidelity account, purchasing as described above, and just parking their funds without a lot of timing/selling, is there anything to be gained by an advisor? It seems pretty clear that the people selling the shovels are the ones that get rich in a gold rush. |
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Originally Posted By jos51700: …… he states that generally charges 1 to 1.5% for etf management… Everything he said made sense (buy the dip….., Time in vs timing, etc). “Buy the dip” and “time in vs timing” are complete opposite approaches. Run away. Was this guy a Fidelity employee or was he an independent advisor who uses fidelity to hold your investments? The latter is very common. I’m pretty sure Fidelity charges around 0.9% for basic management. They also have other management options that are cheaper. |
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My experience is that you will, at some point, forget about managing your accounts. But if you are in simple S&P ETFs or something there might not be an advantage to having a manager. I have not been very good at managing my money in stocks. And I think we are near or past the top of the market (but I'm a chicken). So if you need a place to park your money while you are deciding where to invest in, SGOV is very safe and pays 3-4% monthly. Or you can find a mutual fund. I'm sitting on a bit of cash (Wells mutual funds) and Insurance bonds right now. Although I just moved my 401Ks to a managed investment company with a 1.2% cost for now. I'm really nervous about the Market. So only 33% total in the stock market. I think gold is a solid asset/investment to own right now. I think it will go to 4K per ounce shortly (check the chart). Central banks are buying gold hand over fist. I watched it go up like 50% in a few months and beat the market, with more upside potential still there. Gold should be no more than 10% of your holdings however. My Wells Fargo advisor told me that they don't see a recession coming this year....We sill see. I'm not a great investor, and I'm way too conservative. But I feel good about what I've said above. |
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Originally Posted By jos51700: Per Arfcom's advice, I'm reading Bogle's books, and they sound....sound. I've largely rolled my funds into S&P etf's, and I watch that expense ratio. I've stepped out of the buying individual stocks entirely. I was at a social function yesterday and got talking to guy that's a financial advisor (incidentally, I wasn't looking for one), and he states that generally charges 1 to 1.5% for etf management, but doesn't charge if there's a specific stock I want to add to my portfolio. Everything he said made sense (buy the dip, don't let emotions guide your actions, Time in vs timing, etc). I'm still learning about tax advantages and reading, but my goals at this time are max'ing my Roth and then an individual IRA with my pocket change, and contributing to my 401k. He was pretty honest about people that watch their own funds not really needing him, and that he was better for people that don't want to think about it. If someone is babysitting their funds in a Fidelity account, purchasing as described above, and just parking their funds without a lot of timing/selling, is there anything to be gained by an advisor? It seems pretty clear that the people selling the shovels are the ones that get rich in a gold rush. If you are posting the question on ARFCOM you need to hire a pro. |
ARFCOM GD hates everything so don't freak out if you catch grief for what you like. Unless you like AKs, then GFY.
| I switched to an advisor and have been very happy. I am busy and didn't have time to manage my money or even plan out a real (changing) strategy. My advisor has been great in being active, helping spread my strategies out and is also a tax pro and advises on tax strategies. After the last few years i am definitely ahead of where I would have been on my own. |
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Originally Posted By 4Teen_R: I think you would be wasting $ paying someone 1 to 1.5 % to put you into S&P 500 ETF's. You can handle that on your own. I would only pay someone an advisory fee if they were putting me into a collection of individual stocks. Which is what I do. I diversified half of my TSP account to a FM. He is doing individual stock purchases based on acceptance of risk. I told him if he did better than my TSP I would move more. He also does Trust and Taxes as part of his services. |
ARFCOM GD hates everything so don't freak out if you catch grief for what you like. Unless you like AKs, then GFY.
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I'm just a dude on the internet, not a financial advisor. Just to put things in perspective, 1% of 1,000,000 is $10,000. 1.5% is 15,000. Alot of these managers charge a percentage of assets under management. Are you really going to pay someone to periodically re-balance your IRAs? Very few if any, beat the market. Stick to low cost ETFS, like VTI,VOO,VYM and just ride it out. There was an episode of the Personal Finance Podcast a couple of months ago that went over 1,2,3 bucket investment strategies. What you really need a tax strategist to set you up for Roth conversions, tax loss harvesting etc.. I tried a robo-adviser with one of the large trading platforms for 9 months. It invested in weird ETFs that were all about climate change (ESG) and lost money compared to just leaving it all in a S&P 500 index fund. Try to find a fee only certified financial planner and meet up with them yearly. As you get closer to retirement, get a CPA. If anyone tries to sell you an annuity...RUN. |
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Paying an advisor to run a dollar cost averaging / passive index investing strategy is silly IMO. I can’t say whether Fidelity does it or not but some brokers will steer you into higher fee funds because the funds pay them kickbacks *cough* Edward Jones *cough* |
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Thanks all for the replies. I didn't see the logic in it for me, but I'm not everyone. And yes, following the general advice here has been helpful and I feel that arfcom has given generally good advice. I'm just glad I didn't put more than $7 in to Infinity Pharmaceuticals like someone here suggested lol |
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It somewhat depends on where you are in the whole saving for retirement time line. If you have several years left IMO you can do your own thing and use ETF's to get where you need to be. If you are near or in retirement with a more complicated situation the financial advisor becomes more attractive. We are at Fidelity and they recently recommended one of their "partner advisors". The fee is asset based but is the same or less than their in house option. The bonus is that this firm has a much more hands on approach with more investment options at their disposal. They also offer tax planning for efficient growth and withdrawal in retirement that is included in the fee. If you are a Fidelity customer, I'd ask them about it. |
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These dudes rarely beat VOO after fees, and often give advice that underperforms (ask me how I know). The ones that do beat VOO after fees don’t do it consistently. Buying the dip works really well, except for when it works really poorly. And as a strategy requires you to keep “dry powder” out of the market. There is also kind of an ulterior motive for suggesting it, too. I’d love for everyone to buy the dip in equities that I already own…stabilizing them or providing me an exit. But, compare that to time in the market. The SP500 has had a (tiny) dip or two in the past week. But is it really a dip? Or is it just a return of last month’s price? We all could have just bought it then, instead of waiting. Bogleheading on the other hand is a well proven strategy. There might be something to be gained with an advisor, but you already have one…Bogle. |
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Originally Posted By 1168RGR: These dudes rarely beat VOO after fees... Your 1-year cumulative pre-tax return +27.98% S&P 500® Index +14.95% Your 1-year cumulative pre-tax return +21.14% S&P 500® Index +14.95% |
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Originally Posted By Morgan321: This perhaps was once true, but today it's trivially easy to beat the sp500 during bull market periods thanks to tech. Two of my accounts at random: Your 1-year cumulative pre-tax return +27.98% S&P 500® Index +14.95% Your 1-year cumulative pre-tax return +21.14% S&P 500® Index +14.95% I’m also beating SP500 by almost double. (Edit: turns out I’m a little over double VOO) By being aggressive in a bull run. That doesn’t mean an advisor will do that, consistently to a degree that beats his fees. Besides, my outperformance is just compensation for taking on risk. There are ETFs that will do that without the management expense. In fact that’s most of my portfolio. |
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You can likely get the same portfolio as having it managed by simply plugging your info into their portfolio creation tool…. Rebalance every so often. Having a manager for your account typically is just paying more for the thought that there’s someone watching it for you daily — Protip: they don’t. |
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Fidelity has “fundamental” ETFs that mimic their top managers’ portfolio choices in a given category. They’re pretty new, and at least partly opaque, so not a lot of data available. But, they are actively-managed by Fidelity and thus indicative of what a Fidelity advisor would do. Only one of them beats the SP500. It doesn’t do so consistently. Its top 10 holdings look a lot like SP500. It’s called FFLC. They also have the best passive SP500 fund that I hold. |
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Originally Posted By 1168RGR: Fidelity has "fundamental" ETFs that mimic their top managers' portfolio choices in a given category. They're pretty new, and at least partly opaque, so not a lot of data available. But, they are actively-managed by Fidelity and thus indicative of what a Fidelity advisor would do. Only one of them beats the SP500. It doesn't do so consistently. Its top 10 holdings look a lot like SP500. It's called FFLC. They also have the best passive SP500 fund that I hold. rates less risky per Morningstar too |
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Originally Posted By cruze5: Felc expense ratio is cheaper rates less risky per Morningstar too As far as being “less risky”, its risk adjusted returns this year lag VOO, it’s Sharpe ratio since inception is lower on average than VOO, it’s correlation with VOO is .98, and its drawdowns are deeper than or comparable to VOO. We could say its risk is comparable to SP500, but definitely NOT lower. If a Fidelity advisor puts you in FFLC or FELC, that’ll likely be the best things they sell you. I’m not hating on Fidelity, they have some of the best ETFs in their categories. |
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Originally Posted By jos51700: Everything he said made sense (buy the dip, don't let emotions guide your actions, Time in vs timing, etc). And that is the root issue of your confusion. How do you know where the dip is? You cannot time time market. You even noted that in the same sentence when you said "Time in vs timing". If you can time the market then you can see the future, so you should buy a Powerball ticket instead. Advisors do not outperform the market. They may outperform in a year here or there, but that is because of chance. The one advantage to a financial advisor is to calm a impulsive investor. If the market tanks 20% tonight, will you freak out and sell? If some friend tells you about the new stock that is going to go up 200% next week, will you buy? If the answer to either is yes, then yes a financial advisor is probably a good thing because they can act as barrier to you doing anything other than buying VT and then never selling it until you retire. |
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Originally Posted By Justa_TXguy: And that is the root issue of your confusion. How do you know where the dip is? You cannot time time market. You even noted that in the same sentence when you said "Time in vs timing". If you can time the market then you can see the future, so you should buy a Powerball ticket instead. Advisors do not outperform the market. They may outperform in a year here or there, but that is because of chance. The one advantage to a financial advisor is to calm a impulsive investor. If the market tanks 20% tonight, will you freak out and sell? If some friend tells you about the new stock that is going to go up 200% next week, will you buy? If the answer to either is yes, then yes a financial advisor is probably a good thing because they can act as barrier to you doing anything other than buying VT and then never selling it until you retire. 100% NOTHING else exposes the dunning-kruger effect like personal investing. I work in "big tech". We have a very large financial/investing call every Wednesday as part of an internal "club". I cannot tell you the number of times people chime in about timing the market, because these are VERY smart programmers..... and they have a hard time believing that they aren't smarter than the market. I have seen a LOT of fortunes completely dissolved over the years, attributable to nothing more than dunning-kruger. Mix in a little pride and hubris, and the train goes off the rails eventually for all. I suffered from it myself until I realized how little I really "know". |
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This is one of those things where I think people shouldn't need an advisor but as imperfect as most people are, they probably do need one. All you need to do is read any investing thread ever anywhere on the internet to know this. It's not so much about beating the market as it would be about having someone to keep you from making average idiot mistakes that set you back. I think the Dunning-Kruger post is spot on and we are all subject to that effect to some degree at some point or another. Having the humility to admit it is probably a good first step. |