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We have had our IRA retirement accounts at ML (Merrill Lynch) for many years now. Recently they changed the name of the program it's still MFA-like (Mutual Fund Advisor). We have it invested as "MODERATELY AGGRESSIVE". The fee schedule for account values $250K and over is 1.50%.
I was looking at my company's 401(k) plan and it seems they also have internal fees they charged which vary depending on the investment in the selection of the mutual funds they have. One as high as 1.6%. But I guess there isn't anything that can be done about the 401(k) because it's an employer benefit and no other options.
Back to ML's 1.5%. The portfolio is entirely invested in mutual funds. I guess if I really felt I knew what I was I could transfer all the IRA holdings from ML to someplace else like Fidelity which a friend tells me only charges him $8.00 a trade. Then I wouldn't have the 1.5%, but I would be on my own to make investment choices. I believe they and like most brokerage houses has a fee to manage a portfolio so I could find myself back paying 1.5% or higher, I don't know.
As a company I'm not unhappy with ML, but I wonder if this fee of 1.5% is a good trade-off considering I don't have the knowledge of a broker to make my own investments and when I tried to do this stuff myself early on, it was a headache for me because I never knew if I was making the right choices and it took up a considerable amount of time.
My friend does all his own investing. He only does stocks and pays $8.00 a trade. He buys and holds stock and claims he has done well doing this. But often times like gamblers, they only talk about their winnings. I certainly don't want to spend a lot of effort to have no better than the same net result from ML, or worse make choices which end up hurting our retirement. Speaking of retirement, my friend is retired and has a pension and social security so he doesn't entirely rely on his investments, so who knows if overall his net is any better than what I get from ML.
So tell it like it is. Is 1.5% too high? Is it entirely unnecessary? Or should I not care provided the net return is meeting our investment objectives?
Thanks in advance for any kind and useful suggestions you may have.
You're getting robbed. Roll the entire thing over to Vanguard. Total Stock Market Index would be a good choice. If you really have no idea about investing, get in touch with one of their advisors. Just stick to low cost mutual funds that are equity heavy. You didn't say how long you have until retirement or what your risk tolerance is. A good place for you to start learning is the Bogleheads forum.
You're getting robbed. Roll the entire thing over to Vanguard. Total Stock Market Index would be a good choice. If you really have no idea about investing, get in touch with one of their advisors. Just stick to low cost mutual funds that are equity heavy. You didn't say how long you have until retirement or what your risk tolerance is. A good place for you to start learning is the Bogleheads forum.
You really can't be the judge on the value someone else perceives in their advisor and the fee they pay them. It's beyond rediculous just to spot off "you're getting robbed" and then tell someone to move all their funds to vanguard and manage their own money.
You really can't be the judge on the value someone else perceives in their advisor and the fee they pay them. It's beyond rediculous just to spot off "you're getting robbed" and then tell someone to move all their funds to vanguard and manage their own money.
"I'm a Merril Lynch FA raking it in at 1.5% and more per account, and I approve this message."
You really can't be the judge on the value someone else perceives in their advisor and the fee they pay them. It's beyond rediculous just to spot off "you're getting robbed" and then tell someone to move all their funds to vanguard and manage their own money.
That's a very good point. If I moved the money to Vanguard, and then spent 10-20 hours a week tracking everything and trying to learn it and this is assuming all I did was save 1.5% and ended up with the exact same net returns I'm getting from ML...what about the loss of my 15 hours per week trying to stay on top of this? Keep in mind that's 15 hours a week I don't have with the long commute. That is assuming I did as well at ML does. What if I do much worse and it takes me a couple of years to figure it out too. If it just were a matter of moving the mutual funds as they are to a non-management account which I could do right at ML and leave them there until it's time to retire I would do that. But these are not CDs, they are mutual funds. With retirement about 15 years away and I know enough that it doesn't sound wise to buy and hold what happens to be in the account randomly like that.
Even in my 401(k) which has nothing to do with the FA at ML, he advises me on investments there every six months by reviewing it with me. He does that because he knows when I leave the company I'm going to transfer it into another ML retirement account.
The people I know who do their own investing without the aid of a FA, I know they spend a lot of time doing that in an on-going basis and they are experienced.
I know there are some people who enjoy the risk and the game of investing. I'm not one of them.
You're getting robbed. Roll the entire thing over to Vanguard. Total Stock Market Index would be a good choice. If you really have no idea about investing, get in touch with one of their advisors. Just stick to low cost mutual funds that are equity heavy. You didn't say how long you have until retirement or what your risk tolerance is. A good place for you to start learning is the Bogleheads forum.
What 15-20 hours a week?--that's insane. You should reallocate at most twice a year. Once a year is usually sufficient. It should take no more than an hour. The whole point is to utilize the index investing strategy so you don't have to 'track everything'. The market will do what it does, you commit to sustained, regular investing no matter bear or bull, and go live your life.
Quote:
Originally Posted by eastcoastguyz
That's a very good point. If I moved the money to Vanguard, and then spent 10-20 hours a week tracking everything and trying to learn it and this is assuming all I did was save 1.5% and ended up with the exact same net returns I'm getting from ML...what about the loss of my 15 hours per week trying to stay on top of this? Keep in mind that's 15 hours a week I don't have with the long commute. That is assuming I did as well at ML does. What if I do much worse and it takes me a couple of years to figure it out too. If it just were a matter of moving the mutual funds as they are to a non-management account which I could do right at ML and leave them there until it's time to retire I would do that. But these are not CDs, they are mutual funds. With retirement about 15 years away and I know enough that it doesn't sound wise to buy and hold what happens to be in the account randomly like that.
Even in my 401(k) which has nothing to do with the FA at ML, he advises me on investments there every six months by reviewing it with me. He does that because he knows when I leave the company I'm going to transfer it into another ML retirement account.
The people I know who do their own investing without the aid of a FA, I know they spend a lot of time doing that in an on-going basis and they are experienced.
I know there are some people who enjoy the risk and the game of investing. I'm not one of them.
You've got a lot to learn. Read The Boglehead's Guide to Investing, and The Boglehead's Guide to Retirement Planning. From the looks of things, you have vastly overcomplicated your investment strategy and left everything in the hands of a very expensive outfit. That 1.5% fee you are paying will likely end up costing you tens, if not hundreds of thousands in returns.
Quote:
Originally Posted by eastcoastguyz
Why do you trust the information that's on that specific website?
You've got a lot to learn. Read The Boglehead's Guide to Investing, and The Boglehead's Guide to Retirement Planning. From the looks of things, you have vastly overcomplicated your investment strategy and left everything in the hands of a very expensive outfit. That 1.5% fee you are paying will likely end up costing you tens, if not hundreds of thousands in returns.
Making planning mistakes can cost you a lot more than 1.5% annually. Maybe that's why you shouldn't blanket recommend people take this on to save 1.5%
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