As for an advisor vs doing it yourself. I have my two old 401Ks rolled into IRAs (one Roth one traditional that hasn't all be converted) and I do pay 1%. I've thought about taking them back as I've learned more and more over the last year. But, I was also careful with who I chose as my advisor after interviewing a couple and I don't stick with him just because I think he'll earn more in the market. Over the three years I've been with him, I've appreciated having someone to goto when we were thinking of selling our house, when my wife has opened her side floral business, and on a couple other topics so that advice has been worth the % I dont really notice.

I think its all about the individual person and the advisor

No fancy hieroglyphics from me. I just hear the low expenses argument over and over and I don't completely understand it. If the low expense options outperform high expense options historically then that may be the way to go for some or most . I'm just saying I personally will happily pay more if I get better net returns. So far it has worked on balance… for me. Also agree with above poster that if you have an advisor it provides an opportunity to bounce things off them with someone that makes their living at it.

I'll also say this, if you're getting the full court press from someone selling a managed Ira don't feel shy about telling them their fees are too high. Current advisor who I have been with for about 10 yrs actually went down from 1% to 0.75% and I ended up giving them the work and it has worked well. Needs to be a match from a personality standpoint. I was skeptical but I'm glad I did it.

Giving up to a point from the outset is hard to beat, which is why 80% don't.

I think the most valuable advice is tax strategy, particularly around Roth ladder strategies and ultimately overall withdrawal strategies. But that can be done with some periodic advice and software vs handing someone a chunk of your portfolio each year

I bleed maroon said:

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Old Tom Morris said:

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I am focused on net returns. But the fact of the matter is that an s&p 500 index is beating 82% of active managers and doing so for anywhere from 0.5-1% cheaper.

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Just for the record, the expense ratio may indeed be a big part of why the performance of the fund is better. It's already included in the rate of return. Just pointing this out so people don't think the lower expenses is additive on top of the better performance.

For the record, I agree with your premise - an index fund outperforms most active management strategies over time.

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I think what I'd be willing to pay for in an actively managed account, particularly in retirement is less wild swings.

Don't want to have to draw on an account that dropped near 50% like I've seen in my 401K with me in charge

tlh3842 said:

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As for an advisor vs doing it yourself. I have my two old 401Ks rolled into IRAs (one Roth one traditional that hasn't all be converted) and I do pay 1%. I've thought about taking them back as I've learned more and more over the last year. But, I was also careful with who I chose as my advisor after interviewing a couple and I don't stick with him just because I think he'll earn more in the market. Over the three years I've been with him, I've appreciated having someone to goto when we were thinking of selling our house, when my wife has opened her side floral business, and on a couple other topics so that advice has been worth the % I dont really notice.

I think its all about the individual person and the advisor

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You pay 1% or do you pay 1% + fund expense ratios?

The expenses are already baked into the net returns
Of the asset. If your net return is say 20% per year
For sake of discussion on a high
Expense ratio asset and a low expense ratio asset
Was 15% you incrementally made 5% that year
On one vs the other irrespective of expense ratios.

Management fees for a managed Ira are a different beast because it's a% of all assets under management but your asset manager should also be baking that into your managed asset rate of return calculation.

To me the expense ratio calc is something the asset
May try to use as a selling point but it's really only
Of interest to the accountants. Net return is the metric to use to compare. Granted , impact on your taxes needs to be considered in the mix as well. The way the asset pays
You your returns also could matter but in a retirement vehicle that you are not taking income from it shouldn't matter

3 options I see in the IRA:

- S&P heavy because you didn't save enough and need to be more aggressive

- Fixed income heavy because you DID save enough and don't need it to grow and don't want to worry about it

- S&P heavy because you save so much that you may as well go after some generational wealth and longer term goals.

If you have a pension and/or SS, that can affect decisions too. Treating those as a fixed income portfolio can allow you to be more aggressive with the IRA.

OldArmyCT said:

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I use Merrill and pay 40 BP's for 2 IRA's managed differently and have a 3rd IRA I manage myself and a self-managed CMA, both with zero fees. The accounts they manage are sub-managed by different teams and are a bit more diversified than I would do myself but pretty much mirror the S&P performance year over year, after fees. 100% equity and I'm old and taking RMD's. I let them handle it BC of my kids (wife is deceased), 1 of the 3 will spend it in a week without someone restraining her, the other will try to keep it but has a dip**** husband who may talk her into something stupid, and the 3rd will probably do very little but has no idea how markets work. In other words I'm paying now for help after I'm gone.

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I bet you're 100% right about your kids. Deep down they know it too, I imagine.

you could just get into an ARK fund where the expense ratio just gets buried into the net loss so you don't even notice it

EliteZags said:

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you could just get into an ARK fund where the expense ration just gets buried into the net loss so you don't even notice it

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Im no kathy woods fan but actually have ARKG, thr genetics fund because I'm big on the lomg term future of genetics

We rolled ours into Fidelity IRAs. Pay ourselves a salary every month plus my TRS. It has been working well. Looking forward to getting a raise when my wife starts taking SS.