I recently rolled over an old Simple IRA and an old 401k plan that I had from previous employers into a traditional IRA. The FA wants me to sign an ambassador discretionary which will allow him to buy/sale without my discretion and has a 1% annual fee.
I haven't paid into either of these accounts in years (since I left their respective employer), and won't be paying anything into them in the future. I innately have a cautious mentality, so off the bat I have hesitations to allow an ambassador discretionary. But, I am also wondering if the 1% fee is acceptable on an account that I no longer pay into and am just allowing it to gain growth on it's own?
I'm not savvy in any of this stuff and just need some outside advice, and not solely rely on the words coming from the person who is using my wealth to help his wealth.
Rolled over old Simple IRA and 401K into traditional IRA – ambassador discretionary and 1% fee common?
byu/Acky1425 ininvesting
Posted by Acky1425
3 Comments
1% is pretty standard for asset management fees but it’s one of those things where if you have to ask if it’s worth it, it’s probably not. Most people don’t have enough money to make paying an asset manager worth it
I was faced with this issue earlier this year.
1. 1% fee for a professional advisor for my 401k
2. 2-3% bonus for transferring my 401k to a certain broker, and choose a target date portfolio
I chose #2 for.. now.
I like this publication from the SEC about the impact of fees.
* https://www.sec.gov/investor/alerts/ib_fees_expenses.pdf
You can see what 1% fee does to your end result.
What would I recommend?
May I ask what options you are willing to entertain?
Are you willing to *not* go with this advisor?
Would you be willing to move the Traditional IRA to somewhere else? Yes, I know it will be another “hassle,” but that’s a one time thing. Refer to the link above for the cost vs benefit.
What is your anticipated year of retirement? If you don’t know the answer to that question, what is the year in which you will turn 65?