I was hoping to get some confirmation/advice for a work friend who is retiring in the next year. She's asked for my advice and I've recommended Bogleheads to her - hopefully she'll come on over for the specifics!
My friend has asked for my opinion on going with a asset management company. She doesn't have experience managing her own funds and has gone with the recommendations from the Fidelity advisors available through our work retirement plan. I'm not sure how their service works, but they seem to have made a lot of decisions and movements of her money for her. But apparently, once she retires she can't use that service any more.
She described the place she's already talked to and showed me some of their documentation and I recommended that she not go with them and instead that she simplify her portfolio, transfer it all over to Vanguard, and use their personal advisor services. She wants advice as to tax planning and asset management. Her portfolio is about $2m and she does have some complicating factors (ailing mother under her care, mother isn't from America, planning on moving to mother's home country after retirement to live with her there for several years to save money on her mother's medical care and on living expenses).
The things that worry me about the company she has already talked to include: AUM fee of around 0.8%; they gave her a fancy personalized booklet that said if she'd had her assets under their management, she'd have 50% more money now; they talk about the "sectors" they like to focus on and other nonsense like that. She thinks they are a fiduciary, but I can't find the word "fiduciary" anywhere on their website, so I can't confirm that. I'm not sure how to find that out.
Obviously, as a Boglehead myself, everything she said made me more and more uncomfortable. Her lifestyle should be able to be supported by her assets, but I don't think she should throw money away to a place like that.
Looking at her current assets held in the 457 and 403b at our place of employment, the 457 (~$65k) is all in a Vanguard 2030 target date fund. The bulk of her money, though, in the 403b, is in maybe a dozen funds with expense ratios up to nearly 1%, although not all are so bad.
What I'd like to recommend she do is transfer all her 403b money into the same target date fund. Then when she retires, move it all to Vanguard and use their advisor services for the other help she needs as far as planning, tax help, etc, and get a dedicated tax person to help if she needs more than what Vanguard provides. She has a lot going on with her family situation and has no experience with anything like this, so she's really not comfortable going fully solo, so I'm trying to make this absolutely as simple as possible hence the target date fund suggestion.
So I guess I'm wondering - does anyone see any issues with my suggestion? Will the Vanguard PAS do what I'm telling her it will do? I think she will read this thread, so any advice/suggestions for her?
I don't know all the details, but she has about $2m total assets for retirement. I think it's almost all in the 403b - not sure if there is an IRA, bit pretty positive there are no taxable accounts, so it's all in retirement accounts of some kind. I think the Fidelity people took out a bucket of about $400k and put it into cash for her immediate post-retirement needs.
Thanks so much for the time any of you all take to help me, and please share your thoughts! She is a dear friend and I don't want her to get taken in by an asset management company, but I also don't want her to get in over her head.
Thanks so so much to anyone who can reply!!
My friend has asked for my opinion on going with a asset management company. She doesn't have experience managing her own funds and has gone with the recommendations from the Fidelity advisors available through our work retirement plan. I'm not sure how their service works, but they seem to have made a lot of decisions and movements of her money for her. But apparently, once she retires she can't use that service any more.
She described the place she's already talked to and showed me some of their documentation and I recommended that she not go with them and instead that she simplify her portfolio, transfer it all over to Vanguard, and use their personal advisor services. She wants advice as to tax planning and asset management. Her portfolio is about $2m and she does have some complicating factors (ailing mother under her care, mother isn't from America, planning on moving to mother's home country after retirement to live with her there for several years to save money on her mother's medical care and on living expenses).
The things that worry me about the company she has already talked to include: AUM fee of around 0.8%; they gave her a fancy personalized booklet that said if she'd had her assets under their management, she'd have 50% more money now; they talk about the "sectors" they like to focus on and other nonsense like that. She thinks they are a fiduciary, but I can't find the word "fiduciary" anywhere on their website, so I can't confirm that. I'm not sure how to find that out.
Obviously, as a Boglehead myself, everything she said made me more and more uncomfortable. Her lifestyle should be able to be supported by her assets, but I don't think she should throw money away to a place like that.
Looking at her current assets held in the 457 and 403b at our place of employment, the 457 (~$65k) is all in a Vanguard 2030 target date fund. The bulk of her money, though, in the 403b, is in maybe a dozen funds with expense ratios up to nearly 1%, although not all are so bad.
What I'd like to recommend she do is transfer all her 403b money into the same target date fund. Then when she retires, move it all to Vanguard and use their advisor services for the other help she needs as far as planning, tax help, etc, and get a dedicated tax person to help if she needs more than what Vanguard provides. She has a lot going on with her family situation and has no experience with anything like this, so she's really not comfortable going fully solo, so I'm trying to make this absolutely as simple as possible hence the target date fund suggestion.
So I guess I'm wondering - does anyone see any issues with my suggestion? Will the Vanguard PAS do what I'm telling her it will do? I think she will read this thread, so any advice/suggestions for her?
I don't know all the details, but she has about $2m total assets for retirement. I think it's almost all in the 403b - not sure if there is an IRA, bit pretty positive there are no taxable accounts, so it's all in retirement accounts of some kind. I think the Fidelity people took out a bucket of about $400k and put it into cash for her immediate post-retirement needs.
Thanks so much for the time any of you all take to help me, and please share your thoughts! She is a dear friend and I don't want her to get taken in by an asset management company, but I also don't want her to get in over her head.
Thanks so so much to anyone who can reply!!
Statistics: Posted by BuckyBadger — Wed Dec 18, 2024 12:31 pm — Replies 0 — Views 41