Background
I'm in my early 30s. Only got a good job in the past few years. Wasn't very financially literate until now. Received some inheritance a few years ago and decided at the time that the best thing to do would be to open an account with my parent's investment manager. My thinking was that my parents were setting up to retire and they trusted this guy. Therefore, I could trust him too.
Current Situation
I opened the account in 2013 and really didn't look at the account much, knowing that the market fluctuates and it would only drive me crazy if I worried about it much.
Lately I've been shopping for a new car, because my 15 year old beater can't take much more and is starting to need more and more expensive repairs. This prompted me to take a closer look at my financials, because I need to figure out what I can actually afford.
I discovered that my financial advisor has built a portfolio for me that has been yielding an average 3.95% and charging me a 2% annual fee, withdrawn quarterly.
I'm no financial genius, but this doesn't seem very great to me. I'm literally paying him more in fees than my net yield.
I know 3 years a pretty weak data set, but I've got a bad feeling, so I go to nasdaq.com's interactive chart and look up the avg rate of return for the SPY S&P500 ETF and a few total market index funds over the same period as my investment and they're all around 6%-10%.
How do I fix this?
I'm planning to call their office on Tuesday. I intend to be polite, but ask them something like "What the fuck guys?" or more specifically:
- Is there a better, low-fee way they can invest my money?
- How do you justify investing my money like this in the first place?
If I don't like their answer or detect the slightest bit of bullshit I'm going to ask them to sell off my assets, transfer my cash balance to my bank and close my account. Then I'll find a better place to put my money.
- What can I do if they give me a hard time about closing the account?
- My mother has her entire retirement savings invested with these people and is already at the stage where she's withdrawing regularly. How do I make sure she's not getting screwed too? (Note: her original financial advisor retired and recommended these folks to take over.)
Submitted January 14, 2017 at 10:09PM by oopsmaybetaken http://ift.tt/2jcAsyI
