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Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76384  
Subject: Re: Portfolio Management Fee? Date: 3/17/2006 11:01 AM
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I would think someone at your headquarters could, and if the numbers were good then we would see it in all their ads. Likewise if the recomended list did well over the long term then why haven't they created a "fund of funds" to get the outstanding performance?

We don't advertise the product. Advertisements cost money that would otherwise go to the client.

Every time Fidelity runs a national ad, consider just how much money it cost you from your portfolio (assuming you have fidelity) to watch that 30 seconds -- and that from a no load company *chuckle*.

In a managed portfolio of this nature, you basically have a fund of funds. The wrap account is your fund (strategy). The difference is, you can control, rather than the agent or fund managers, just how much of each fund you wish to have. You can take their recommendation or you can change it up a bit. Such is a good thing for a client to have such options.

How about something much easier. Of the 100+ funds that you currently have on your list, how many of them beat their appropriate index by your management fee of 1.15% over the last year after any other fees are also accounted for?

That I can do (this is actually YTD as of 1/31/06):
Note: While I post this info, I think it is very misleading as someone should never invest based on one year numbers. The only fee on the account is the management fee.

Funds compared to their equiv Index (typically Russell)
Large Cap Growth 6/6
Large Cap Core 4/7 (note, I don't use core funds unless there is no other option -- due to low allocation to that asset class)
Large Cap Value 7/9
Mid Cap Growth 5/6
Mid Cap Core 2/4
Mid Cap Value 2/6
Small Cap Growth 3/5
Small Cap Core 3/6
Small Cap Value 3/6
REIT 2/5
International Eq 6/10
Emerging Mkt 3/4
High Yield 1/4 (and Ironically enough, it is a Fidelity fund)
Taxable Fixed 0/7 (not surprising on that one -- if all you do are bond funds, this account is not for you).
Muni 1/13 (same as above)
Market Neutral 0/2
There are a few more money market accounts as well that are used for a small percentage of cash (no more than 2% from every allocation I have seen).

To reinterate, this style of account is not for everyone. Most people that visit sites such as this and that have the time and the desire to do their own research, can likely do as well or better on their own. That being said, I just met with clients this morning that had money in a 401K from a previous job that had been sitting in a stable value fund for years (they got scared with 9/11 and such). They did not need or want income from the account but they were afraid of volatility. They wanted growth from the account but were not getting it at 3.68%. They are in their late 60's and early 70's and want to spend more time with their grandkids than they do worrying about their money. This type of account was right up their alley. No upfront cost, no backend cost, and someone to watch over their money so they don't have to.
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