Conscious Aging: Changing my Financial Advisors

I completed the sale of Jerry’s and my financial planning business two years after his death, and part of the deal was that the new group would be my financial advisors. That has worked well for almost 15 years, but with some recent departures from the firm, I’ve decided to make a change. I’ve been interviewing new advisory firms, here in Seattle and elsewhere. It no longer really matters where your advisors are, unless you’re wedded to the idea of sitting down and talking with a live human on a regular basis. I’m not. I want performance, and certain technical things like RMD calculated on an annual basis. Other than that, my advisors could be on the moon.

One surprise, as I’ve been making the rounds, is how dramatically fees are coming down. At an earlier point it was not uncommon for financial service firms, especially banks, to charge 1.5% to manage investments. Now, such firms have to compete with online platforms like Wealthfront and Betterment:

https://www.nerdwallet.com/blog/investing/wealthfront-vs-betterment/

You don’t get a lot of handholding from these platforms — Betterment offers the opportunity to talk live with an advisor via email or chat, Wealthfront doesn’t — but the fees are dramatically lower and investment performance likely to be just as good if not better. If you’ve been with an advisor for a long time and haven’t revisited the fee issue, you should. I’ll bet their newer clients are getting much lower annual management fees than you are — between .5 and .8%.

The other impression I have is that if you manage to avoid the corrupt and outright incompetent — of which there are many in financial services — there are a lot of ways to get 5-7% average return over the long haul. The last few years have been much better than that, but markets go up and down, and that pattern is historically consistent. There’s no magic in Trump world that justifies the continuation of the currently higher market performance; in fact, there are a number of things the Trump team could do — like tanking NAFTA — that would have downward effects on the economy and on financial markets.

Changing advisors is a pain in some ways, but in another sense I’ve quite liked getting dressed up in biz attire and making the rounds. The first two I spoke with had Googled me before I came in. One had bought my first book, How Much is Enough?, and the other had clearly read lengthy segments on my blog. I’m still looking first for investment performance, but taking me seriously as a writer at this stage of my life is a surefire way to my heart.

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