Should I leave my $400,000 IRA in a managed account, or should I place it in a low cost dividend stock?

My financial advisor is an old family friend who my parents employed to manage their estate. Upon their death, I kept my portion of the estate with the financial planner, who is employed by a large international Swiss bank. I rolled over my IRA into her care, which she placed in a managed dividend stock account with wrap fees of 1.5% yearly. I feel a certain loyalty to the financial planner. However, is it in my best interest to look for lower fees?

Estate Planning, IRAs
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October 2017

Hello,

That decision can only be made by you.  However, if you can answer this simple question, it will lead you to the logical decision. You mentioned the fee is 1.5%.  Can you find out what’s the return for your portfolio so far for this year? When you mentioned your advisor uses a dividend-driven strategy, that means you’re heavily invested in the value stock. So, use that as a clue, the return you should get is 7.07% (based on the Russell 1000 benchmark, https://ycharts.com/indices/%5ERLV/ytd_return).  Then, you subtract 1.5%, you get 6.02%. Is that what your return is?

What if you use a Russell 1000 growth, the year-to-date return is 22.35% (https://ycharts.com/indices/%5ERLG/one_year_return). Why wouldn’t that be a consideration? Was the chosen value strategy based on your age, time horizon for investment, and risk tolerance, or was it transferred from your parents’?

When you can get those answers to your satisfaction, you will know what to do next.  BTW, just a little note: usually the investment fees are negotiable, and it goes down when the asset balance grows. Best!

October 2017
October 2017
October 2017
October 2017