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A couple posts back rkseiple told us of a bank trust department that is charging $100 a month to manage an $80,000 trust account, and then has the gall to invest in mutual funds.

That's the kind of greed that lead me to fire my full service broker, Churnum Quick. During the first two decades I was with Churnum, he picked stocks and occasionally a mutual fund. Now, I wasn't Foolish in those days, but I wasn't stupid either. I told Churnum he could turn over my account once every three years. I figured that would give him a reasonable living without totally gutting me on commissions.

At first he did rather well. He actually beat the S&P500 for almost 25 years. Not every year, but often enough that I was content. (Yes, being an engineer, I did keep track and showed him my scorecard every year or two. It always made him nervous, but life's tough.) However as the decades rolled on, I noticed that Churnum was developing the annoying habit of recommending loaded mutual funds.

"Churnum," I said in one telephone conversation, "if I'm paying a fund manager to pick stocks, why should I pay you?"

"Ahem, whine, whimper. Well GW, you need me to sort out the good funds from the bad."

"Is that so?" I responded. "But Churnum, if I'm not competent to pick a fund manager, then how can I be competent to pick you?"

There was more whining and whimpering before I finally let him hang up. The next time he called to recommend another loaded mutual fund, I told him to hold off for a while. Then I filled out the new account papers at Waterhouse and transferred my accounts.

My point is quite simply this: If you pay someone to pick stocks and bonds for you, don't let them pay someone else to do the work. If they can't handle the job directly, then go to someone who can. Like, for instance, Vanguard or one of the other no-load, low turnover, low annual fee, index funds.

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