[USER]

I’m 60 and achieved fire 8 years ago. I let a brokerage handle my investments for about 1%.

I realize i could probably do it on my own at this point but they’ve been so successful over the last 20 years and are at my beck and calI so I hate to change a thing.

Thoughts? Anyone else in this situation?

[Mark]

calculate how much money you’ve paid them over last 20 yrs. that should be enough incentive to leave

[Howie]

If you pay for other services you value, it is worth it.
– Trust/estate planning.

– Setting up shell/legal entities for you to make charitable donations anonymously.

– Using all that extra cash to do a whole life (BYOB) policy as part of a family trust fund.

– access to hedge funds / private equity deals or VC-type deals.
If only asset under management, and nothing else, you can do better.

Many of these folks are 5 years behind the times.

If they were good, they should tell you to buy one bitcoin in 2016-2017.

I find many of them are not good investors.

[Dave]

1% is cheap. Best I could find was 1.4% but then they had all sorts of hidden fees.

[Miles]

I have both FAs and manage some of our own assets, by and large with a buy-and-hold ETF strategy.

And while over the past 25 years my FA managed account has enjoyed better aggregate results than my own account, I find the spread acceptable as I review the applied investment philosophy annually, and in truth the reason for me using FAs isn’t for the investment choices (multigenerational, trust, etc.).

I think people can or don’t use FAs for a variety of reasons, but the in common advice I would offer is to know the reason behind the decision, rather than simply, “everyone uses one.”

[Kaylee]

Big congrats hitting that milestone! I have an M7 MBA. Early in my career I managed Treasury functions for publicly traded companies.

I am financially independent.

I have the skills tools education and time to manage my own portfolios but I do not.

As a retail investor, I do not have access to the basic building blocks of optimized portfolios.

I have enough skills and training to know that.

Anyone who tells you to run your portfolios yourself using mutual funds and or ETFs if you have greater than $300k invested is simply naïve and unaware of the opportunities, costs and alternative approaches.

Vanguard and Fidelity do not even recommend it.

Vanguard (founded by John Bogle of “Boglehead” fame) has published research demonstrating that individual investors who manage their own portfolios with Vanguard funds (Bogleheads) underperform similarly situated investors using professional advisors by roughly 3% compounded annually net of all fees and taxes.

Fidelity’s research on the same matter demonstrates a 4% opportunity cost net of fees and taxes for those who self manage vs those who use professional advisors.

The difference in the findings are understandable and make sense when you dig into the structure of the research.

The takeaway, however, is that even the companies who benefit the most when people (Bogleheads) “self-manage” their portfolios, advise people against doing it, because it leads to statistically significant negative outcomes relative to using a professional advisor.

Consider that self directed fund investors leave 3% to 4% on the table annually, and a “safe” withdraw rate is 4%, by managing your own portfolio you give up 75% to 100% of your annual “safe” withdraw rate just because of ego and ignorance.

That means that either your long term purchase power or legacy take a hit, or both.

Essentially, on a $1,000,000 over 20 years, a Financial Advisor earns/preserves you roughly $1.2mm extra net of all fees and taxes versus being a boglehead and doing it yourself

[Author]

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