Is there any advantage to paying a 1-2% fee and letting a big, full-service finacial firm handle your money, as opposed to doing it yourself by buying into a few mutual funds?
Is there any advantage to paying a 1-2% fee and letting a big, full-service finacial firm handle your money, as opposed to doing it yourself by buying into a few mutual funds?
No.
Probably not and who knows if you can trust the person.
But at a certain wealth level a lot more issues crop up and it's smart to have some sort of wealth management expert guide you through tax, trust, estate, matters. Even more so if you've gained the wealth through very hard work in an unrelated finance field. You might not have the time to learn money management expertise.
I'm an average investor who socks away a certain amount of my paycheck and chooses my own investing vehicles. But my parents have about 20x my wealth and value the expert guidance from their advisor. It's worth the sheckles.
Only about 10% of the people at brokerage firms really know what they are doing (with the exception of Goldman, where it's about 80%).
But never ever ever buy mutual funds, they are the biggest racket on earth. Buy ETFs, buy index funds, invest in hedge funds if you are wealthy, but never purchase mutual funds.
The best do-it-yourself method is ETFs. Cheap and easy to put in place. Just get the asset allocation right and you will be on your way.
Why are mutual funds a racket? Even from a firm like Vanguard, that seems to have some respect in terms of low-cost funds?
Carnivore 69 wrote:
But never ever ever buy mutual funds, they are the biggest racket on earth. Buy ETFs, buy index funds, invest in hedge funds if you are wealthy, but never purchase mutual funds.
Index funds ARE mutual funds, and they are reasonable alternatives to ETFs.
Of course, most actively-managed mutual funds aren't worth the expense. But most hedge funds are at least as bad -- ridiculous expense structures, perverse management incentives, and very little transparency.
There are some outstanding actively-managed mutual funds, and a number of others (including index funds) that are entirely reasonable investments.
A novice investor would be well advised to check out the Vanguard family of funds.
Anybody out there that works for a big broker that can defend the big fees they charge? Everyone seems to think it's stupid to pay those fees...so what are the advantages?