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Has anyone gone thru the Wachovia Envision process? They take your financial info and interview you to see what your goals are for retirement. Then they put the info into their computer, and it gives them over 1,000 scenarios for your future. It is based on probability analysis. They invest in mutual funds with your money and charge a 1% annual fee for their services. They use this info to keep you on track for retirement.
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No, but please share your results if you do this. I am a captive client of Wachovia because I benefit from a trust (dont cry too much for me). They probably use a similar tool for trustafarians like myself. Ill probably ask em next time I speak with the disburser of my livelihood.
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I'm not specifically familiar with Wachovia but most financial advisors, brokers, mutual fund companies, and the like have similar programs and I doubt that the Wachovia process is unique. A 1% wrap fee for account maintenance is also typical with some being higher and others lower. It may also depend on the size of the assets under management. This may or may not be worth the cost. Certainly the development of the initial financial plan has some costs associated with it and they are entitled to charge for it. Remember that the 1% is coming off the top of your portfolio performance. Will they be able to exceed the performance of do-it-yourself investing by that much or more? Also remember that the maintenance fee will be charged each year.

Bob
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No. of Recommendations: 5
Has anyone gone thru the Wachovia Envision process? They take your financial info and interview you to see what your goals are for retirement. Then they put the info into their computer, and it gives them over 1,000 scenarios for your future. It is based on probability analysis. They invest in mutual funds with your money and charge a 1% annual fee for their services. They use this info to keep you on track for retirement.

The ongoing 1% fee that they want to charge is over and above any fees that they charge for the investments they put you into. If all you are after is the analysis, you can get it cheaper elsewhere.

For example, you can get a similar analysis (and possibly yearly checkups) from Vanguard for a flat fee or free. Here is a link to a page with the fees they charge for this service: https://flagship.vanguard.com/VGApp/hnw/content/AccountServ/Advice/ATSAdviceCompFinPlanContent.jsp

One issue - if you don't have at least $100k to invest there, Vanguard won't do this analysis for you. However, if you have less than $100k in total investable assets right now, you probably won't get much more benefit from this than you can get from free calculators on the web and hanging out at the Fool.

If you don't like Vanguard, I am pretty sure that Fidelity and T. Rowe Price have similar services for flat fees or free, depending on how much money you have to invest.

If you are after the ongoing money management, again, I would suggest that if you want to take a little time, you can probably do just as well by managing your money yourself with advice from the Fool and a little bit of research. Banks that do this type of analysis tend to offer you their own home-grown funds, which are generally loaded with fees and don't perform as well as funds that you can buy elsewhere because of this.

AJ
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For example, you can get a similar analysis (and possibly yearly checkups) from Vanguard for a flat fee or free. Here is a link to a page with the fees they charge for this service: https://flagship.vanguard.com/VGApp/hnw/content/AccountServ/Advice/ATSAdviceCompFinPlanContent.jsp

From the link:

Free financial plan and checkup for Flagship and Voyager clients.

Free financial plan for investors bringing $100,000 in new assets to Vanguard.

Financial plan for a fee of $1,000 for existing clients with less than $250,000 invested with Vanguard.
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I did a post a while back about the impact of a 1% management fee.

http://boards.fool.com/Message.asp?mid=23850583

Be sure to read the other posts in that thread as well. In addition to how the 1% add up over the years while you are saving, once you retire you can only take out somewhere around 4% per year as a safe withdrawal rate(SWR) because if inflation and market fluctuations.

Once you retire and start withdrawing money, if you pay a 1% management fee, which means that they are charging you 25% of your income or more with hidden fees. If you invest for 25 years like simple model above, you will have already lost 22% and when these are combined, you will only have 60%(.78*.75) of the retirement income that you could have had without the fee. The sad thing is that the people selling the plans like this know how badly they are gouging their customers and the real situation is often worse because of theadditional and hidden fees.

You might want to read;

"The Bogleheads' Guide to Investing". It has lots of good entry-level stuff and is fairly easy reading.
http://www.amazon.com/gp/product/0471730335/ref=sr_11_1/103-9784238-7695860?ie=UTF8

William Bernstein's "The Four Pillars of Investing" is also a good book but is somewhat more advanced.

After reading more, if you still want to see a fee only financial planner you will be able to ask much better questions and make better use of their time.


Greg
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Once you retire and start withdrawing money, if you pay a 1% management fee, which means that they are charging you 25% of your income or more with hidden fees. If you invest for 25 years like simple model above, you will have already lost 22% and when these are combined, you will only have 60%(.78*.75) of the retirement income that you could have had without the fee. The sad thing is that the people selling the plans like this know how badly they are gouging their customers and the real situation is often worse because of theadditional and hidden fees.

A good advisor will help clients avoid mistakes that are *extremely* common, mistakes that would be far greater than a 1% fee. It is an unfortunate truth that most investors underperform the mutual funds that they are invested in because they get scared out of them when they decline and they get back in after they have risen (they do this with stocks as well). Far too many investors let their emotions affect their decisionmaking. A good advisor will help them avoid this. This isn't to say that everyone needs an advisor, but there are clearly *many* investors who would benefit from an advisor.

That said, I think it is important to understand the fees and expenses that you will be charged, which are often hidden as you said. A good advisor will try to keep your costs down.
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Make sure that you have a good selection of investments available before you do this. I opened a Wachovia IRA a couple years back and they tried like the devil to stick me in their Evergreen family of funds. The advisor I met with told me that she was invested in several of the funds and that they were quite good, but when I challenged her about the very high level of fees (often over 2% per fund, plus loads depending on what share class you bought) she seemed to reconsider the hard sales line.

I've recently had a negative experience with Wachovia as they have become very greedy with their account fees. There used to be ways to be exempt from certain fees (ie waive annual IRA maintenance fee if you maxed out the contrib each year or had over $xxx dollars invested with them), but they seem to be putting forth a determined effort to eliminate these and maximize their fee income.

I ended up moving my IRA to ETrade because of the fees, and my regular brokerage is next. I encourage you to shop around for the service you are looking for before you agree to any long-term arrangement. Be sure to actually add up the dollar amount of the fees. 1% sounds very small, and you probably won't ever see it explicitly broken out on the statement, so go into the process with your eyes wide open and with a good idea of how much the 1% is actually going to cost you.

If nothing else, however, be sure to stay away from the Evergreen funds. They are very high cost compared to other fund families, and I could not see any sustainable advantage that they had other than earning a commission for the advisor/salesperson you are working with.

Foolish best,

Marco
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As mentioned earlier, Wachovia will likely steer you to their funds.

For that much money or less try to find a fee-only planner with whom you would be comfortable.

www.NAPFA.org

www.GarrettPlanningNetwork.com


buzman

Membership Disclosure
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The process is called Monte Carlo and I think all financial plans use such (and most charge between 1 and 1.5% with a reduction for larger dollars).
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Banks that do this type of analysis tend to offer you their own home-grown funds, which are generally loaded with fees and don't perform as well as funds that you can buy elsewhere because of this.

I would strongly disagree with this assessment. The benefit of a wrap account is so that you can have funds from many different fund families - without having to pay any sales charges. In the case where they do use "home-grown" funds (at least in my experience), they use funds that are institutional (typically requiring investments of 1-5 million to start) and have significantly lower expenses due to such.

Your mileage may vary of course but with regard to retirement accounts, ERISA laws specifically FORBID a bank from using their "home grown" funds within a wrap account.
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Footnote:

ERISA specifically forbids a company from having a fund with an operating expense within a wrap account of the same company. You can use "home grown" funds but if you do, they have to have a 0% operating expense - which is a pretty darn good deal if they do.
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The process is called Monte Carlo and I think all financial plans use such (and most charge between 1 and 1.5% with a reduction for larger dollars).
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My experience is that 1.0% is the max and can go as low as .1%.



You can get money managed at Portfolio Solutions for .1% for accounts as low as 100K. Garrett Planning Network financial planners (membership disclosure)can provide this service to their clients. I have not used it personally, but Rick Ferri has more brains in his toe than most people who post here.

FWIW, Monte Carlo is only a small part of a financial plan. In fact there are better ways to stress a portfolio.

buzman
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In the case where they do use "home-grown" funds (at least in my experience), they use funds that are institutional (typically requiring investments of 1-5 million to start) and have significantly lower expenses due to such.

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Since we use no-load funds exclusively you don't need minimums that high for access to institutional accounts. With a commission setup it may be different.

buzman
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Since we use no-load funds exclusively

I don't think any wrap account uses loaded funds. That would be rather silly if they did.
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Oops, I just realized that I was not that clear when I stated about the institutional comment. One does not need to have a million+ within a wrap account to gain access to those funds - more like $1000 - but that those funds are not normally available to customers if they wanted to buy it outside of a managed account.
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Oops, I just realized that I was not that clear when I stated about the institutional comment

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Well that makes more sense.

Some loaded fund families are available "no load" as institutional shares-with much lower minimums than your originally mentioned.

Pimco for example.

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