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Message
Is 1.5% management fee too high?
Posted on 9/25/23 at 11:18 am
Posted on 9/25/23 at 11:18 am
My financial advisor charges 1.5% fee on my roth, rollover and personal account and returns are less than my 401k lifestyle fund account (costs $100/year). Should I roll my funds over to my work 401k for less fees??
12
Posted on 9/25/23 at 11:21 am to Rollwave034
Yes. Your financial advisor isn't going to beat the average returns of the S&P over time (or ever probably). Better off with some low cost ETF
Posted on 9/25/23 at 11:38 am to Rollwave034
Is the fee too high? absolutely yes.
Should you "roll your funds" into work 401k, no. You are dealing with various types of accounts with different tax treatments. You should consider transferring the accounts in-kind to a low cost brokerage (fidelity, vanguard, schwab).
Should you "roll your funds" into work 401k, no. You are dealing with various types of accounts with different tax treatments. You should consider transferring the accounts in-kind to a low cost brokerage (fidelity, vanguard, schwab).
Posted on 9/25/23 at 12:43 pm to Rollwave034
please tell me you are not using edward jones.
Posted on 9/25/23 at 12:48 pm to Fat Bastard
A subsidiary of mass mutual.
Posted on 9/25/23 at 1:19 pm to Rollwave034
Way too high. The only one you can roll into the 401k is the Rollover, but you probably shouldn't anyway. Find someone new, or index it at a big broker as mentioned. Good luck.
Posted on 9/25/23 at 1:36 pm to Rollwave034
Too high
They usually stage it with the balance so higher balance = Lower fee.
Also, how much will they keep in cash? That should joy be subject to a fee.
If you have the time and some skill, you can do it yourself with ETF’s just buying the SPY and maybe the QQQ
They usually stage it with the balance so higher balance = Lower fee.
Also, how much will they keep in cash? That should joy be subject to a fee.
If you have the time and some skill, you can do it yourself with ETF’s just buying the SPY and maybe the QQQ
Posted on 9/25/23 at 1:42 pm to Rollwave034
1.5% is the standard fee for an FA to manage an account
Posted on 9/25/23 at 2:01 pm to Man4others
quote:
How Much Do Financial Advisor Fees Typically Cost?
When it comes to financial advisor fees, most firms charge based on a percentage of assets under management (AUM) for ongoing portfolio management. According to a study by Advisory HQ News Corp, the average financial advisor fee in 2021 was 1.02% for $1 million AUM, which adds up to $10,200 annually.
This is up from past years when another study by RIA in a Box said that the average financial advisor fee is 0.95% of AUM, which for a $1 million account would amount to roughly $9,500 per year. Fees are often assessed quarterly, though, so your advisory fees may be divided up into fours.
Asset-based annual fees may decrease as the size of the account increases, ensuring that high-net-worth individuals are still paying a fair rate. However, this also means that fees will be higher for those with lower account values. The average AUM fee for a $50,000 account is 1.18%, or $590 a year, again according to Advisory HQ’s previously mentioned study above.
That's high even for 50k in assets.
Posted on 9/25/23 at 2:10 pm to Man4others
quote:
1.5% is the standard fee for an FA to manage an account
No, it isn't.
Posted on 9/25/23 at 2:21 pm to Rollwave034
Yes
Learn how to do it yourself
1.5% may not seem like much now but the do the math on how that goes as your assets grow - it's not worth it
Learn how to do it yourself
1.5% may not seem like much now but the do the math on how that goes as your assets grow - it's not worth it
Posted on 9/25/23 at 2:51 pm to UpstairsComputer
1.5% is a standard fee for an FA to manage and provide service to a smallish account. FA could charge more like 1.75% to 2% if they wanted to
Posted on 9/25/23 at 2:54 pm to Man4others
quote:
1.5% is a standard fee for an FA to manage and provide service to a smallish account. FA could charge more like 1.75% to 2% if they wanted to
The only people I have ever heard of charging north of 1.25% were Merrill and UBS guys. They thought the name on the building somehow justified it.
Posted on 9/25/23 at 3:05 pm to Man4others
quote:
1.5% is a standard fee for an FA to manage and provide service to a smallish account. FA could charge more like 1.75% to 2% if they wanted to
Can you site any study or is this just what you think?
Posted on 9/25/23 at 3:20 pm to UpstairsComputer
Here is a website detailing a fee structure for accounts. LINK
quote:
Types of Investment Management Fees
Management fees, whether paid as a mutual fund expense ratio or a fee paid to a financial advisor, typically range from 0.01% to over 2%. Generally, the range in fee amount is due to management strategy.
Tiered Management Fees
Under a tiered investment management fee structure, different asset levels are assessed their own specific fee rates. By using this structure, all clients pay the same rate at the deposit level, no matter the account size. For example, the investment manager may charge 1.75% on the first $250,000, $1.50% on the next $750,000, 1.25% on the next $5 million and so on.
This post was edited on 9/25/23 at 3:23 pm
Posted on 9/25/23 at 4:28 pm to TDTOM
quote:For small accounts? I don't this so. What rates would you expect for smaller accounts?
The only people I have ever heard of charging north of 1.25% were Merrill and UBS guys. They thought the name on the building somehow justified it.
Posted on 9/25/23 at 4:33 pm to NOSHAU
1.25% at the most. If you have to charge more than that put a minimum account size that would make it worth your time.
Posted on 9/25/23 at 8:12 pm to Rollwave034
That is insanely fricking high
Posted on 9/25/23 at 8:21 pm to Rollwave034
Move all accounts to Schwab, Fidelity or Vanguard. 1.5% is way too much to pay for their advice. I'm with Schwab and it costs me 0% outside of the normal expense ratios of the ETFs/funds I invest in. There is some value in an advisor that will prevent you from making kneejerk reactions to the market but that can be had for much less than 1.5%. Post your portfolio and we can set you up for the future for free.
ETA: Depending on where you are investing now, transferring in kind may not be possible. Some captured funds by FA's might not transfer. It might be cheaper/only possible to liquidate there before the transfer. If this doesn't apply, you will more that likely be better moving it to the 3 brokerages I mentioned and trade out at no cost.
ETA: Depending on where you are investing now, transferring in kind may not be possible. Some captured funds by FA's might not transfer. It might be cheaper/only possible to liquidate there before the transfer. If this doesn't apply, you will more that likely be better moving it to the 3 brokerages I mentioned and trade out at no cost.
This post was edited on 9/25/23 at 8:45 pm
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