One thing I have said over and over is the fee that FA charge is really not the worst part (but seems to capture all the headlines). It's the underperformance and the taxes they incur from a portfolio of buying and selling and market timing. When you have an 8 digit net worth that they're managing, this headwind becomes enormous. Even the 1% fee over a lifetime of investing really adds up, when you start talking about a 5%+ headwind compounded annually and it becomes life changing money.
Before I knew better, I used these people thinking they had some edge I didn't have. But when I benchmarked them, they were barely better than a savings account after all their fees. If all the "damage" they were doing was 1% less per year from their fees, I probably would have kept them.
To me it seems a very simple solution. Drop your FA and pick out some combination of index funds and fixed income and just let it ride. Or it doesn't have to be all or nothing to get the ball rolling, start by taking half of it out and just following a more Boglehead approach.
Before I knew better, I used these people thinking they had some edge I didn't have. But when I benchmarked them, they were barely better than a savings account after all their fees. If all the "damage" they were doing was 1% less per year from their fees, I probably would have kept them.
To me it seems a very simple solution. Drop your FA and pick out some combination of index funds and fixed income and just let it ride. Or it doesn't have to be all or nothing to get the ball rolling, start by taking half of it out and just following a more Boglehead approach.
Statistics: Posted by illumination — Mon Dec 02, 2024 9:08 am
