Quote:
Originally Posted by tcxr750
Regarding the perception of the performance of VSMGX and VSCGX relative to a diversified portfolio managed by an advisor with a 1% management fee.
Let's say you have a $1,000,000 portfolio (good luck) and take out 4% per year. You get $40,000 per year and your advisor gets $10,000 per year. In other words 20% of your annual withdrawals are not going to you. 10 years of advice = $100K.
I've been retired 10 years and can safely say that my advisors (see Barron's top 100 list) have allowed my account value to incur 20% losses during the Great Recession. The good news is that if you live long enough and don't make withdrawals eventually your portfolio will recover to it's original value. Unless of course your in the RMD phase. Enjoy!
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Yes the fee is 25% of your "income".
Maybe the fee should be based the performance of the account.