Need investment advisory service. What's worked for you?

July 3, 2024 6:42 PM

Ms. Charris and I are of close-to-retirement age. We had investments for many years with Edward Jones but for reasons, moved it all to Vanguard. Due to a combination of family circumstances our holdings have been augmented significantly (definitely a first world problem) and they are all over the place: Vanguard, Fidelity, Ameriprise, Merrill. We need to get advisory services and have been pitched by Empower to sign on with them. Based on services and fees, we're looking at Vanguard also. Would like to hear about experience, pro and con, with Empower and Vanguard advisory services. Thanks.
posted by charris5005 to Work & Money (7 answers total)

Here's the advice I have followed which has served me well.

For financial planning services I am very willing to pay for investment advice outright but not through any services. Many financial planners make their money through high(er) fee funds on a recurring basis which are likely not in your best interest. Fee based financial planners who are fiduciarys are always my suggestion. I would find someone like this and ask them to review your investments, debts, and retirement plans which should include what they think is a reasonable withdrawal rate for you.

In terms of investments I follow the three fund portfolio strategy which shifts the allocation of investments towards bonds as you reach retirements age to reduce risk.

I've used both Fidelity and Vanguard platforms and would be happy to use either again with no strong preferences.
posted by Quack at 7:17 PM on July 3 [5 favorites]

I have most of my investments in Fidelity and have not found them to be high-pressure at all. I have a deferred compensation account through Empower, but they take direction from me in how to invest my funds. Having retired within the last few years, I now have a very conservative investment strategy and I imagine that any reasonably competent financial company could manage it. If you're looking for more aggressive income or have other goals, an advisor might suggest a viable allocation strategy for your money.
posted by SPrintF at 7:29 PM on July 3

We pay for Vanguard advisor services. It’s very low cost and both of our advisors (we’ve had two different team members at this point) have been available, helpful and transparent with us.
posted by samthemander at 8:53 PM on July 3 [2 favorites]

I have had used Vanguard advisory services off and on* for the last 16 years. A new job uses Empower and I recently had a phone meeting with a person from their advisory services and I did not think their services were worth the higher fees. (I was given a price list that showed a fee of .60% of AUM at Empower, vs the .30% of AUM I would pay at Vanguard for the same services.)

(*Vanguard used to offer advisory services on a more ad-hoc basis, and when I was in a similar situation to yours in terms of combining a lot of far-flung accounts and majorly adjusting my allocation strategy, they were especially helpful. I am currently using their digital advisor to manage a family member's money.)
posted by minervous at 7:47 AM on July 4

I have experience with Fidelity and Vanguard over ~25 years, and feel like I know them well, though I have not paid for advisory services from either. But if I were you, I would lean heavily toward those two versus Empower. Vanguard is almost extremist in its pursuit of low costs for customers - this is great from the point of view of saving money and avoiding high fees that have no purpose, though the customer service aspects of Vangaurd (like the website and app) are pretty spartan, likely as a result of the low-cost/no-frills ethos of the company. Fidelity is somewhat higher touch (i.e., not quite as cheap, but better services). Both Fidelity and Vanguard have tens of millions of customers, good pricing (because of high volumes), and they are both very much on the radar of the government and the press in terms of scrutiny of their business practices -- i.e., if they do anything questionable with their customers, there is a high likelihood that the SEC or the Wall Street Journal will be calling them. This doesn't mean they are perfect, but their mistakes tend to get publicized and corrected rapidly. I don't know Empower at all, but wikipedia says that they are part of an annuity insurance company, which is a pretty big yellow flag - annuity products tend to have high fees and non-transparent pricing

The other thing to keep in mind here is that investment advice for the vast majority of people can be done with some very simple algorithms that consider your age, your risk tolerance, your savings, etc. Fidelity and Vanguard both have very inexpensive advisory programs that can put your data into the algorithim and suggest a portfolio of low-cost index funds. Unless you are paying for some kind of more individualized and higher-touch service (which 90% of people do not need), the main thing to do is identify one of the low/reasonable-cost firms that is unlikely to rip you off and go with them. Fidelity and Vanguard check all of those boxes.

Finally, if you want some more personalized advice, I would recommend a one-time fee consultant like Jon Luskin, who will review all of your various accounts and suggest a way to consolidate them at a low-cost brokerage, along with other advice.
posted by Mid at 9:45 AM on July 4 [1 favorite]

I had a similar reaction to Mid when looking at Empower's overall business. Their primary businesses are 401k record-keeping, life/health insurance benefit plans and annuities. Its investment advisory business has been built through a series of acquisitions. None of these are bad, per se, but I'd be more comfortable with an institution that has been built to focus on the line of business that I am patronizing. Vanguard or Fidelity would be my preference for that reason. I'd also add Schwab to your list to consider. While I don't use Schwab's advisory service (but do use Schwab), I've had some interaction with their advisors and they seemed competent and not at all pushy.
posted by mullacc at 1:07 PM on July 4

Can I also throw in a caution against going too low risk in retirement.

A pension actuary broke down that when you look at your retirement dollars - about 10% is what you put in initially, another 25% was accumulated during the savings phase - but about two-thirds were payments from income earned AFTER your pension had started, ie. the post-retirement earnings are the major factor in the amount you receive as a pension.

So if an adviser suggests more than a nominal amount should be in cash/GIC/interest bearing deposits - this is a big red flag as far as I am concerned. Absolute maximum in cash should be no more than three years of pension payments.
posted by Barbara Spitzer at 4:57 PM on July 4