Invested in Vangd Target ret. fund - .19% fee; bank wants to move it to his - ann. acct fee of 1.35% compare?
I rolled my 401(k) over into a Vanguard Targeted Retirement Fund...it's not doing real well! My banker wants me to move it into an actively traded account with him, I have the "proposal" with some 14 different funds he proposes to invest it in. He is charging me a "preferred customer" expense ratio of 1.35% annually, against the 0.19% annual fee at Vanguard, claiming he'll earn enough to offset the fees. I'm dubious. I can't find a good calculator to try to compare the proposals. I don't really know what I'm doing, but the "rule of thumb" that I see is actively traded funds with higher expense fees are not preferred, and the Vanguard funds seem to be pretty well regarded. Help!
Public Comments
- Even for a investment adviser managing your account 1.35% is high. Most are around 1%. The "Preferred customer" stuff is BS imo because it is still high. The whole market is down so he is only "saying" he can do better. Afterall he can sell you and tell you he does WORSE. LOLOL Ask for a references from people he manages that you can call and ask how he did for them lately. And that fee he is taking comes out of your capital whether you make or LOSE money. And also realize you said he is recommending FUNDS. Those funds have THEIR OWN FEES too that come out of your return and you pay the adviser on top of that. And I bet some are loaded funds and the adviser gets paid by them as well (from the load). That is why it is so hard for advisor's to beat something as simple as an index fund. The fees kill ya. Vanguard has discussion and info on their site about these comparisons. I would never pay an adviser to put me in to funds. I got mad at my father's broker for doing that to him. If you are going to buy funds you don't have to know much to do it yourself directly and cut out that expensive middle man.
- Report this broker to FINRA (www.finra.org) it's ilegal to guarantee any kind of future performance to anyone. A professional will never sell you on fund perfornce only amateurs do that. What count when you make a investment is that you have the correct asset allocation. There is no one looking at what you investment is doing at Vanguard, they just put a number of stocks and funds together and God knows what happen after that. But its better than having an amateur allocating your money based on performance.
