30M. I’ll try to make this as straight forward as possible. I inherited some brokerage and IRA accounts from my dad when he passed in 2022. They were with this guy that my dad and a few other members of my family had used for a long time. I’m not super savvy with investing and this guy had never steered my dad wrong so I figured why not just let him continue to manage them. I even handed over my Roth IRA to him later in 2022. Previously I had just been putting 100% of it into an S&P 500 index fund.
Fast forward to the beginning of 2025, as I’m doing my taxes I start looking at the accounts and noticed the returns were pretty poor across the board. I reach out to ask him what was up and he said that the accounts had just defaulted to what model my dad had his money in. He died at 62, so obviously we’re talking more like treasury bonds and money markets. Lower risk, lower ROR type of stuff. He had even invested my Roth IRA in a conservative model. I told him I wanted everything moved to a more aggressive model and he did it pronto.
Now I admit some of this is on me, I’m an idiot for not looking at it closer and basically just ignoring it for three years. But some of this is on him too right? I was in my 20s, this stuff should have been invested more aggressively and he should have at least asked me about it at some point. He has a very successful business and I think he deals with a lot of high net worth individuals, of which I am not. Sometimes it feels like I’m just not a priority for him because I’m such a small slice of his pie. Super nice guy though, and will always take my call and is very helpful with all things finance, not just the accounts he manages.
Since he switched the accounts into a more aggressive model, they’ve done well. It isn’t a miracle rate of return but he’s beaten the S&P 500 so far. I recently looked to see how much he’s actually charging me in advisory fees and it’s 1.25% of total account value annually. I currently have 5 accounts with him totaling about $130K. What do I do here? I don’t plan on touching any of this money for a long time. Do I just let him continue to manage it? Do I switch to an advisor with a lower fee? Do I just take all the accounts back and throw them in S&P 500 index funds and forget about them?
Is my wealth advisor worth it?
byu/kpwizard96 inpersonalfinance
Posted by kpwizard96
15 Comments
1.25% AUM fee kills your returns every single year. Fire them and go back to sp500, total us (VTI), or total world (VT, VTI+vxus) https://www.bogleheads.org/forum/viewtopic.php?t=414923
Advisors don’t reliably beat the market. If they did, they would all be rich, not sucking 1.25% from you.
first, props for taking a look at your finances now instead of just letting it ride. That 1.25% fee is kinda steep, especially for what sounds like a conservative approach for a young investor. If you’re okay with managing it yourself, the S&P 500 index funds are a solid choice. But if you feel the advisor is still helping you grow your money, maybe negotiate on fees or see if there’s a better fit for your risk level. just weigh your options and go with what feels right.
It doesn’t matter if you’re small potatoes, if he didn’t at least touch base with you to learn your preferences and risk profile *he hasn’t earned his fee.*
Go back to self-directing and be as aggressive as you want to be.
Not anywhere close to worth it. You can manage this yourself and save tens of thousands of dollars over the next few decades.
Not worth it. The fee is killing your returns. Just follow the flow chart unless you have 5+ million in total assets
I start getting squeamish when I’m looking at a fund that has 0.5% expense ratio. I would never pay a 1.25% fee.
Look up target date fund or build your own 3-fund portfolio. They are very easy to build. For your 3 fund portfolio if you have multiple funds available that are the same thing like multiple total market funds, pick the one with the lowest expense ratio.
Edit: Also, I would have a hard time missing out on some of the historic gains that have happened over the last decade. I would probably ditch him just for that and write a bad review for him.
Wow ridiculous fee. Even without going into the fact that he should’ve caught the change, you’re getting scammed. Manage your stuff on your own.
Run away. You can’t afford to give him your money. Just go 100% equities until 5 years before you retire add some income.
Kick this guy to the curb. If he didn’t re-balance the portfolio when it went from your dad to you, then he’s lazy and certainly didn’t earn his fee. Like the vast majority of people, you don’t need an advisor. If you ever do need financial or investing advice, hire a fiduciary on a one-time, flat-fee basis to get the help you need.
Not worth it. Advisors should give advice. Sounds like he’s just an investment manager.
You were already doing the correct thing by investing 100% in the S&P. Financial advisors aren’t going to provide any more value.
Sounds crazy, but if an advisor has a book of $150 mil range clients the family member of a so-and-so with a $200k brokerage account and an IRA will never be on his radar.
My advice pull accounts transfer to fidelity invest in s&p 500, subscription to Barons and Wall Street journal. You will be better of, as you gain knowledge build a diversified stock portfolio in your taxable account so can manage tax risk and reinvest dividends. Goodluck
Well his fees come out of the accounts and he beating the S&P after fees so not terrible, and that fee isn’t bad for that amount of money, but should only be charging it on actively managed accounts. Most concerning thing is he didn’t visit with you for 3 years and was sitting in bonds while he charged fees, that would way piss me off
OP broadly unless you have an absolutely insane amount of money the amount you lose from a wealth advisor is going to be more than what they ‘earn’. If you really want something that isn’t just an index fund look into something like Ally bank’s robo-advisor (I’m not shilling for them I promise)
for the ‘amount’ you really have to think of a number so high that you wouldn’t trust an anonymous poster on a public forum no matter how detailed the post and how many upvotes they get