Your IRA Provider

[SandburRanch]

Have you ever fired your IRA provider. Reasons Ok, company names please withhold.

 

[sseelhoff]

Have you ever fired your IRA provider. Reasons Ok, company names please withhold.

Yes. We recently (within the last year) fired our broker after 20 years. No growth in the account over that time. Lots of excuses and all of our gains went to his fees. Should have fired him sooner, but it was a friend of the family kind of deal. Since the move, we have made more gains than we had the entire time we were with our prior broker.

 

[smstonypoint]

No, but I direct my own investments through a low-cost provider.

Are you using a broker to direct your investments?

Steve

 

[gsganzer]

Yes. We recently (within the last year) fired our broker after 20 years. No growth in the account over that time. Lots of excuses and all of our gains went to his fees. Should have fired him sooner, but it was a friend of the family kind of deal. Since the move, we have made more gains than we had the entire time we were with our prior broker.

I'm about to fire our broker too, after being with him for 7 years. I get transaction notices frequently and I'm told that he's "level setting" the allocations. I get the feeling that he's "pushing paper" and piling up fee's.

I'm thinking of moving everything to Vanguard. In reality, most of these companies have an automated allocation system that looks at your investment strategy and then recommends the mix of investments to meet those goals. I'm not sure that the actual broker does much research to add any real value.

One thing I will add:
I'm not one for additional governmental regulation, but I would definitely push for a law that provides better transparency for fee's charged for brokerage transactions. I think it's deliberately designed to be cryptic and confusing. I shouldn't have to dig up a prospectus I received years/months ago to see what the particular fee will be for trading that particular stock.

My Dad was a broker for 30+ years. After he retired, he ultimately moved all his investments to Vanguard and had very little involvement in the actual stock picks. He let their algorithm do the allocation based on his investment goals.

 

[dmccarty]

...
I'm thinking of moving everything to Vanguard. In reality, most of these companies have an automated allocation system that looks at your investment strategy and then recommends the mix of investments to meet those goals. I'm not sure that the actual broker does much research to add any real value.
....

I almost posted earlier but I was afraid what I was going to say would be taken wrong...

I don't understand why anyone would use a broker. The Wall Street Journal for years would ask financial people to forecast the market at the first of the year and at the end of the year they would look at the results. My dead dog could pick better and I think the research that has been done for decades backs this up. We don't own stock per say but in fund indexes that balance out the portfolio. The funds are in low fee investment firms. High fees really kill long term growth in a retirement fund. There should be plenty of examples on the web showing examples.

One of the investment companies has sent me a couple emails saying that our investments are aggressive for our age and we should reallocate. No, we should NOT. The company only knows about the funds IT holds, not our other investments. I don't let them allocate a danged thing. I make the decisions for better or worse. I have seen many people over the years PANIC when the market goes down and they SELL. If they had not sold the stocks/funds, they would only have had a paper loss, but since they sold, they have a real loss. Even with the 2008 meltdown our funds popped back up quickly in value. Ho Hum.

I really don't see how most brokers can beat index fund performance and thus earn their fees. I have a spreadsheet that models what will likely happen to our retirement investments given various retirement ages, future investments in the funds, and how well the funds will perform at various rates. This ain't rocket science and we seem to be doing well saving out of each paycheck, over a long period of time, in low fee funds. We would be better off if we could have managed to save a bit more when we were younger, or even if we could save more today, but life does set some boundries in spite of the best laid plans of mice and men.

Later,
Dan

 

[gsganzer]

Dan, it sounds like you're already doing what we're planning when we move our assets to Vanguard or something similar.

My Dad said that when he was a broker, he was trying to get returns for his clients that at least matched the S&P 500. He said in his later years that he could have guaranteed that performance by just investing them in the S&P 500 :laughing:

 

[WM75Guy]

Yes, sorta did that. I moved everything out of BOA IRA CDs into mutual funds in a self directed Merrill Lynch brokerage account. The BOA CDs went to almost 0% interest. Merrill Lynch and BOA are in a partnership. The Merrill Lynch account is tied to my BOA account so moving money and seeing my balances is all from the same screen. I also move some old IRAs from previous employers that were in different brokerage firms into the same account to consolidate everything.

For stocks I use Computershare. Computershare and dividend reinvestment is not something you will hear about from a stockbroker as they get cut out of the deal, hence no commission. They handle stock ownership and dividend re-investment plans for many companies. You buy full or partial shares, usually for no fees, straight from the participating companies. You can do a dividend reinvestment to buy additional shares, set up monthly auto debit plans to buy shares, or do a one time purchase. Selling is a minimal fee, like $25 plus $0.12 per share.

 

[Oaktree]

Yes. We recently (within the last year) fired our broker after 20 years. No growth in the account over that time. Lots of excuses and all of our gains went to his fees. Should have fired him sooner, but it was a friend of the family kind of deal. Since the move, we have made more gains than we had the entire time we were with our prior broker.

More or less same situation here (in my case it was about 2½ years ago), same reasons. When the market started coming back after the Great Recession®, my account didn't. Always had an excuse, but basically he'd put all my money into a few stocks that weren't going anywhere, and he had no intention of moving them. Moved my accounts to 2 different outfits...IRA in one, plain brokerage account to another.
Haven't hit a home run with every stock he's picked, but I've done much better than before. Fees are a lot less now too.

I'm more than a little leery of mutual funds...just haven't had very good luck with them.

 

[300UGUY]

I don't think anybody really needs a broker anymore, I invest on my own, thru Fidelity, Vanguard is also a good company. I think the whole broker thing is outdated, it belongs to the era of the ticker tape. I have a very low opinion of financial planners, most are simply trying to sell you something they can collect a commission on. I have mostly index funds. Trying to beat the market is maybe worse than going to a casino.

 

[MinnesotaEric]

Have you ever fired your IRA provider. Reasons Ok, company names please withhold.

The people you interact with are not traders, they are selling products.

For many people, this is all you need to know. The Only Investment Guide You'll Ever Need: Andrew Tobias: 9780547447254: Amazon.com: Books

For those who need a primer for investing, read That Thing Rich People Do: Required Reading for Investors: Kaye A. Thomas: 9780979224881: Amazon.com: Books

 

[RSKY]

I rolled my 401K over into an IRA account with Fidelity. I pick the funds I want to be invested in and move my money accordingly. There are thousands of mutual funds available in different categories and I research and pick what I want. It is simple to do. If you can order something from Amazon then you have enough computer skills to handle it. I DO NOT invest in single company stocks, only mutual funds. An advisor calls and talks every three months. So far she has given very good advice. She does not get a commission but says she does get a bonus if her investors do well. She sits in meetings with the people at Fidelity who manage individual funds so she is aware of what is going on in the Financial World. She always laughs and says that my profile states I want to be conservative in my investments, but I am very aggressive in the funds I hold. I spend less than an hour a week looking at Fidelity's web page.

Friends who worked with me that put their money with a broker or investment advisor have not done as well as I have. This is because the broker invests in the same funds I'm in but take a cut for their own income. I've been told horror stories of people needing to get money from their accounts (his wife had cancer) and having to pay huge fees for early withdrawal. All I do is fill out an online form and within three or four days the money is deposited in my bank account. As my IRA is set up I draw a monthly income from it and also from time to time take out money for special purposes such as buying a vehicle or home improvements.

I got some very good advice when I was thinking about retiring and it has served me well.

Oh yeah, my advisor lady and I had our quarterly talk last month and for the first time she was very insistent that I get out of specific funds because of something the Fed is going to do later in the month. She went down the list and said sell this, sell this, sell this. First time in two and a half years she has done that.

RSKY

 

[gsganzer]

The people you interact with are not traders, they are selling products.

For many people, this is all you need to know. The Only Investment Guide You'll Ever Need: Andrew Tobias: 9780547447254: Amazon.com: Books

For those who need a primer for investing, read That Thing Rich People Do: Required Reading for Investors: Kaye A. Thomas: 9780979224881: Amazon.com: Books

Thanks for the book recommendations. I ordered the book by Tobias today.

 

[Dr_Zinj]

You should get an annual briefing from your broker, preferably in person, going over all of your accounts and holdings. If you have poor performers (anything not getting 2 to 3 times inflation rate), you need to move those funds to better performing companies and funds. If the entire brokerage is doing bad, find another. DO NOT WAIT 20 YEARS TO CHANGE!!!!

 

[sseelhoff]

You should get an annual briefing from your broker, preferably in person, going over all of your accounts and holdings. If you have poor performers (anything not getting 2 to 3 times inflation rate), you need to move those funds to better performing companies and funds. If the entire brokerage is doing bad, find another. DO NOT WAIT 20 YEARS TO CHANGE!!!!

Where was this advice 18 years ago?

 

[Jstpssng]

Where was this advice 18 years ago?

That's what I ask myself when any of these discussions come up.

 

[SandburRanch]

You should get an annual briefing from your broker, preferably in person, going over all of your accounts and holdings. If you have poor performers (anything not getting 2 to 3 times inflation rate), you need to move those funds to better performing companies and funds. If the entire brokerage is doing bad, find another. DO NOT WAIT 20 YEARS TO CHANGE!!!!

If my IRA money was drawing a percent 2-3 times inflation of the past 6-8 years I'd be a millionaire.

So what is the realistic ( net after fees ) percent our investments should be averaging ?

 

[Dr_Zinj]

I'm averaging about 9.8% for my entire portfolio. I even survived 2008 without major losses (I did take some hits though, but recovered quickly.)

And yes, if I'd started 35 years ago when I first started working, I'd be at least a millionaire by now.

Rich people's kids usually learn these things while they're growing up; although some rich parents do fail to pass on their smarts to their kids, or the kids are idiots and never learn. The thing is, the REST of us usually don't learn these things until long after we've passed the halfway point in our lives, which means we've lost the chance to win, and have to settle for just finishing the race. If you want to do the biggest favor to your kids that you can, teach them not just how to save, but how to invest while they're still in school, and then keep telling them to sock their funds into their accounts and portfolios every chance they get. Set them up with a decent brokerage (your own maybe); bring them to a meeting with your broker. ANYTHING to get them started.

 

[kenmac]

Well, I have to say , I have someone manage my account.. I just don't have time to run my business ,and my investments.. His fee is no more than some of the others around.. The more $$ he makes me the more $$ he gets,as he gets a percentage of the account.

I have tried to teach my oldest son to start saving, and offered to set him up with the person I use... He doesn't listen to his old man much..
He said someone came around his neighborhood knocking on doors asking people to invest with a firm he works for .. My son told me , that he was using this person.. I asked what he knew about this person,, He said he didn't really know anything about him , other than what the person had told him.
I told him I would never invest with someone that came around knocking on doors...
Like I said earlier.. For some reason he refuses to listen to his old man.. If he looses ..he just looses..As far as financial advise,, there's Nothing more I can ,or will try to do for him
He has always been 1 of those ,that has to learn the hard way...I wish him the best

 

[randy41]

If my IRA money was drawing a percent 2-3 times inflation of the past 6-8 years I'd be a millionaire.

So what is the realistic ( net after fees ) percent our investments should be averaging ?

the current inflation rate for the past 12 months is .1%.

 

[Oaktree]

the current inflation rate for the past 12 months is .1%.

You'd never know it at the supermarket.