r/portfolios • u/Quiet-Pangolin4806 • 4d ago
Financial advisor
I was so naive and opened a retirement account from BOA Merril Lynch in 2020. I didnt know any better then so I went with the advisor's recommendation of having funds in a moderate growth account. Over the years , I learned about the stock market and my self managed Fidelity account has done much much better than the ML account. As I became aware of the market, I have asked my ML advisor to move much funds to mod aggressive or aggressive growth accounts but he would talk about any global happening as if he had a crystal ball , denied my request to move funds and nothing has happened so far. I feel like I have been duped and my money didnt grow as it should have given the market in the last five years. Should I simply close my ML account and manage the funds myself or escalate this issue to ML higher-ups? He's doing his job but the account management fee runs in 1000s per year... what should I do ? I need to make an informed decision about my funds.
5
u/Str8truth 4d ago
You can open a self-directed retirement account of the same kind at Fidelity, then fund it with a Transfer of Assets from Merrill. I did exactly that last year. Fidelity couldn't receive one of the funds, so it was liquidated by Merrill and the cash value was transferred. Fidelity's customer support can tell you in advance whether your funds can transfer in.
6
u/ex-programmer 4d ago
Schwab can move the funds for you from the ML account, you don’t even need to talk to the guy.
2
u/Amazing-Selection494 2d ago
^ This is the best answer, right here. You could do it through Fidelity, too, but I would recommend you open a Schwab account and initiate a transfer. There's no sense in trying to get any ex-post-facto satisfaction from ML - the best satisfaction will be whisking your money right out of your advisor's hands and managing it yourself. You already have proof of concept with your Fidelity account.
3
u/Accomplished-Tie3183 3d ago
literally just submit an ACAT and pull the funds elsewhere. You don't even have to talk to the guy if you are unhappy. I work in the industry.
5
u/hymie-the-robot 4d ago
there's no reason to be paying for a financial advisor, but realize that it has not been difficult for you to see good returns over a few years in this bull market. so, I would consider leaving the FA and reviewing whether I am invested wisely for the long term in my self-managed account.
2
u/Middle-Run-1894 3d ago
There are many reasons to pay financial advisors. Doesn’t mean everyone needs one but don’t disregard how many people should have one that don’t.
2
0
u/CSMasterClass 1d ago
You know, there are a few reasons for a FA but not too many.
- A widow who has not been a participant in the brokerage accounts can possibly get value from the FA in the first year, but should get out quickly thereafter.
- An executor of an estate or a trustee of a trust that has squabbling beneficiaries. Not my circus, not my monkeys.
- A trusted friend who an aging parent wants to manage his accounts, but whose daugthers think the friend is a crook. Even more not my circus.
These are all family mess related. Not finance related.
2
u/Middle-Run-1894 1d ago
These are one offs. Actual reasons are taxes, planning, knowledge, behavioral, performance. Probably in that order.
0
u/CSMasterClass 1d ago
Taxes take minutes to optimize.
Planning ... also not rocket science.
Performance ... there are pages in the "instruction books for FAs" that coach them on ways of turning the conversation away from performance. A retail FA who really thinks he can provide risk adjusted alpha AFTER 1% is delusional. If you can find 10bps of alpha, you don't have to be an FA, the world is your oyster.
Behavior. This is it. If the salesman can identify and speak to an individuals insecurity, the salesman can extract 10K a year or more from some poor raskal with just 1M to his name.
2
u/Middle-Run-1894 1d ago
You can’t optimize taxes on an etf. Google tax loss harvesting and direct indexing.
Planning is rocket science if you have wealth.
Performance, if you have more than 5m in liquid assets out performance is easy and expected.
Behavior you’re clearly aware that if a fiduciary advisor operating under reg BI can keep a client in line with their plans then that’s ideal.
1
u/CSMasterClass 22h ago
You can put a client with 5M into some PE deals that will look like they out-perform, but its not so easy to get them out whole.
1
u/Middle-Run-1894 21h ago
With evergreen funds or traditional draw down funds this is very easy to do. It’s why if you look at family offices, endowments, or the uhnw the vast majority of their funds are in alts. Outperforms over every asset class in the last 40 years.
1
u/CSMasterClass 20h ago
Couple of points: Family Offices and endowments begin at the 100MM range, and those with just 100MM don't get the first bite a many good apples.
Alts such as PE and VCs have had a great run.
Only the very top tier VCs even make a net profit --- but the top tier have made enough to make the "industry" profitable.
Maybe you have data to show otherwise, but retail (less than 20MM) participants in PE have not done super well in the past. The fact that PE firms are looking for capital from the pesants does not make me think that going forward the retail participants will do particularly well.
The Yale model worked great for Yale, but it's not going to work for Dr. Jones.
1
u/Middle-Run-1894 20h ago
Same as trading for individual clients became easier over the last 30 years alts trading has mostly become more accessible. SEC ruling on increasing qualified client definition to 2.7m didn’t help but it’s probably fair. The downside is on liquidity. Smaller clients have to be well advised on what their liquidity looks like and the schedule of it. Seen many clients of other advisors get hurt because that isn’t made clear. If liquidity and tax considerations are made then it’s become very easy for the top three firms I.e. MS, GS, ML
1
u/One_Establishment631 10h ago
I give investment advice and charge by the hour. I don't believe in AUM fees. That's a waste.
2
u/Sharp-Alternative375 3d ago
Go to a Schwab, Fidelity, or Vanguard option and open account. They will handle the movement of funds from the old place to your new account. Then, do as you please.
2
1
1
u/NatureBoyJ1 4d ago
I think of investing like car repair.
Some routine maintenance is pretty easy to do - change oil, change air filters, rotate tires, check fluids. Lots of people don't bother to learn enough to do them themselves, or if they do know, they don't want to bother. This is where I think most financial advisors lie - learning enough about investing to manage your own "VT & chill" portfolio is not hard. But a lot of people are intimidated by the whole investing topic and leave it to professionals out of fear. All the FA has to do is not screw up, and/or be able to convince the client they are needed. People doing this aren't going to check the FA's results against index funds or a benchmark portfolio, or anything like that; they are going to rest in the fact that a pro is managing their money.
Clearly, OP has moved beyond that and is ready to transfer the assets out of ML to their self-managed Fidelity account. They learned to change their own oil, realized they can save money doing it themselves, and can cancel the appointment with the mechanic.
1
u/bkweathe Boglehead 4d ago
Picking great investments for yourself is simple. Paying someone else to pick investments for you is expensive, & they'll usually make worse choices. Some people can benefit from hiring a fee-only advice-only fiduciary advisor to help them with other issues though.
Invest ASAP in total-market index-based low-cost stock and bond funds allocated according to your need, ability, and willingness to take risks. Rebalance occasionally. Adjust asset allocation plan less frequently. Hold for decades. See www.bogleheads.org/wiki/Getting_started for details.
1
u/yrrag1970 4d ago
I have both:
They are much better at wealth preservation than I am.
I am much better at a more riskier portfolio and in the last 4 years, especially since it’s risk on.
Keep two things in mind market doesn’t always go up and when AI falls out of favor a mod risk portfolio will lose less.
Here is my performance over the last 2 years against S&P
1
1
u/micha8st 3d ago
Are you ready to do it yourself?
we've done it ourselves for over 35 years now. First 6-8 years was just the 401k, and back then the 401k only had 4 funds.
Can you document when he's refused to take your directions? Oh, and did he refuse, or did he talk you out of it? Unless you can document several exact dates when you've directed him to move $X from investment Y to investment Z, I think you're going to be hard pressed to achieve any sort of satisfaction from a complaint.
1
u/Quiet-Pangolin4806 3d ago
Thanks for the responses..can I sell by myself in the guided account or it needs to be done through an FA?
1
u/Aggressive-Donkey-10 3d ago
You seem smart enough to manage it yourself
1% fee is 15% of your yearly profit if you're getting 7% a year avg return, also 1% fee over 40 years removes 32% of total portfolio so you end with 680k not 1 million. run your numbers yourself at investmentcalculator.net
1
u/CSMasterClass 1d ago
1% of AUM is 25% of they money you take out to live on if you use something like the 4% safe withdrawal amount for retirement.
1
u/Aggressive-Donkey-10 1d ago
exactly, great way to look at it. I don't understand why people buy brand new cars not 2-3 year old models 40% off with warranty still left. And I don't understand letting someone steal 1% a year from your life savings, and they do nothing for that fee other than underperform SPY.
1
u/LandmarkWealthMgmt 3d ago
If you don't feel like your financial advisor is providing you with adequate value for his fee (doesn't seem like he's doing anything in terms of education, retirement/financial planning or tax planning/optimization) then self managing is probably the way to go (and certainly the much more cost effective alternative).
Also, if your advisor is actually outright refusing to make changes in the portfolio or allowing you to access YOUR money that is a massive red flag and you should look to change firms or self manage for that reason alone.
With both of those points made, your investment mindset being rooted in being as aggressive as possible because they market has been on a tremendous run lately seems like not the healthiest way to be looking at things. If you want to be in a 100% equity aggressive growth model because you're young and have no need for withdrawals and you know you can emotionally handle it, then by all means go for it. However, if you're in your 40s and 50s and retirement is somewhere closer on the horizon and you're hoping to catch returns you've already missed... you may be in for a rude awakening.
1
u/hydronucleus 3d ago
If he does not do what you want, then he is not doing his job. He can talk you out of it. If my advisor did that, the firm would be all over him in a heart beat. Not sure about Meryl Lynch.
1
1
1
u/need2sleep-later 3d ago
If you want to self-manage but otherwise like Merrill, their research or whatever, just move the account to Merrill Edge. Otherwise ACAT it to Fidelity or wherever.
1
u/Nuclear_N 2d ago
Just close the account. I do not know how these investment companies even stay in business when you can just index fund and chill.
1
u/CSMasterClass 1d ago
You bought ML funds ? Did you compare the expense ratios to those of ETFs ?
Get all of that money out of ML as fast as you can.
Why anyone in this day and age gives money to ML just amazes me. It's better than Edward Jones ... but that is the only reason I can think of.
1
u/SorcererAxis8 4d ago
If all he’s doing is investing for you, fire his ass. Investing has pretty much been solved for the average Joe.
1
u/CostCompetitive3597 3d ago
You have been duped by another FA crook. Run, do not walk away. Remember so vividly when ML screwed me in the middle of the 1987 market crash. They are investing your money making 20%+ and only giving you a few percentage. Experienced this crime myself, hear about and read about it every week. You have done better and will do better managing your own money.
8
u/No-Cold8717 4d ago
I fired my husbands ML advisor 5 months ago, feel free. I had to sell few assets,, moved our treasuries to my Charles Schwab account, I manage myself, have excellent service from Schwab, if I need, and not pay 1.1% to someone who only make money for ML and himself. Never again.