I was asking my mom recently about how she was investing her retirement portfolio and her response made me a little nervous. She's 63, has about $400K split 50/50 between an IRA and trust, and is paying a local CFP to manage her assets. Her CFP gave me access to her portfolio and poking around, it doesn't seem like she's getting the best service.
Her allocation seems reasonable:
- 47% domestic equities
- 8% international equities
- 36% corporate bonds
- 7% international fixed income
- 1% cash & equivalents
But there are a few things I'm concerned about:
- Management fee is 1.2%
- Some of the expense ratios are > 1%
- Both accounts are invested in the same funds so it doesn't seem very tax-efficient (turn over rates range from 50% - 100%)
- Some of the funds are managed by a subsidiary of her bank (conflict of interest?)
Here's an example of one of the subsidiary funds that currently holds 30% of her total assets: http://ift.tt/2rXsKfD
She's transferring $6,500 from the trust to her IRA each year and is withdrawing an additional $1,000/mo from the trust to cover living expenses.
She's planning on retiring in the next couple years and I'd like to help her get the most out of what she has. I think she could benefit from a professional advising her, but not necessarily managing the actual funds.
What would be the best course of action for her? It seems like she'd get a lot of value from a robo-advisor like Betterment, and would pay a fraction of the fees.
Submitted June 27, 2017 at 08:00AM by twdvermont http://ift.tt/2tg1HQx
