Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
- Bad advisor or bad client?

I would bet that the financial advisor would say I was a great client - I didn't know what he was doing, didn't ask about what he did, and when he told me that there was no fee for buying the shares I didn't think to ask whether there was a fee for selling the shares, information that he certainly didn't offer up.

But your post has given me more questions if you care to elaborate:

- The expense ratios include a .75% cost that goes to the advisor

This advisor has been not managing my 401K for over a year and a half. Is he still getting paid out of fees charged to my account for the funds I'm invested in?

- The funds I have are not great but not bad. Many times buying a B share makes better financial and performance sense.

Over the past year, the funds have performed as follows (the S&P has gone up 19.26%):

CVGBX - 3.02%
EKWBX - 23.58%
PQUBX - 7.83% (to be fair - this performace is only since Jan and is very close to the S&P over that time)
FRUSX - 26.26%
SRLPX - 17.50%
ACEQX - 9.07%

Figuring in the expense ratios, over the last year that's a return vs. the Vanguard 500 of (-17.5%), (-11.5%), (-3.5%), (-1.5%), (+2.5%), and (+6.0%).

What exactly is 'not bad' about that? And please understand that I'm not being argumentative - this is a sincere question. I'm looking at 3-5% loads to get out of all of these funds, most of which are grossly underperforming the market. When you say I'm better off to wait, are you saying that this underperformance vs. the Vanguard 500 is going to lose me less money than the sales loads I'm going to realize by selling immediately? Are you assuming that their underperformance indicates that they will outperform the market in the near future?

Once again, thanks for all the help. At the very least, it's inspired me to take a very detailed look into where my money is located and what it's doing. 2 months ago I had no idea on either of these counts.

Joe



Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.