Mutual Fund Companies
 

Who do you have to manage your money if you do. We have Fidelity and am wondering if it is worth it or is there a better way. Are local investment companies better? What is the normal charge at other companies? I know Fidelity charges over 1%, is that too much. They have started pushing annuities more & more. Which I try to stay away from. Please give me some insight into what other people do.

To this point I have managed my own investments. I would never buy an annuity as one pays horrendous commissions and is on the hook for early termination fees. That is why annuities are "sold", never"bought".

At some point in time I may need an outside manager and I will find a fee only firm or individual.

I own Vanguard index mutual funds. The S&P 500 stock index, a short term bond index bond fund, a total market bond index fund, a high yield corporate bond index fund, and a money market fund. Vanguard and Fidelity both offer similar funds, ETFs, and active management based on a percentage of your portfolio. However, I don't pay any portfolio percentage fee or the higher expense ratios required to own the actively managed mutual funds. Vanguard and Fidelity are both good companies, but I would suggest that you compare your total returns to the returns you would have achieved if you had invested in the index funds I listed, and paid no fees. You can also compare them to the Fidelity index funds. You may find that you have been wasting your money.

Another company that provides financial management using a portfolio percentage fee is Fisher Investments, but I think their fees are higher than Fidelity and Vanguard.

I would definitely stay away from annuities.

We have Fidelity and pay well under 1%. It’s a little more than what we pay at Vanguard but we also meet face to face at least once a year with our Fidelity advisor.

Worst returns ever these mutual funds they push

Rather front load
 

I would rather front load on a Fidelity Fund than pay a percentage

OP, when I recently had a meeting with Fidelity, they told me that they could manage my investments for a fee of 1 percent, but that the fee would only be applied to the portion of my portfolio that they were actively managing. So, if I only wanted them to manage half of my portfolio, the fee would be reduced by 50 percent. If you are paying a fee of 1 percent on your entire portfolio, you may want to discuss some type of segmenting of your portfolio.

Also, the current expense ratio for the Fidelity S&P 500 index fund is 0.015 percent as compared to the average expense ratio for their actively managed stock mutual funds, which range from about 0.5 to 1 percent. So, if your stock mutual funds are actively managed funds, you are actually paying fees of up to 2 percent, the fund expense ratio plus the Fidelity advisor fee. However, if you need a financial advisor, I don't think switching mutual fund companies would help you very much. Fidelity is a good company. Good luck.

On a front loaded fund you pay both. A front end fee and a yealry managment fee. I don't understand how this could be an advantage over an idex fund or ETF.

My obligatory post to anyone seeking investment advice.

Take time to read Paul Merriman’s 3 FREE ebooks.
1. First-Time Investor
2. 101 Investment Decisions
3. Get Smart or Get Screwed (read this first!)

Found at paulmerriman.com

Also on his site are recommended portfolios for using Vanguard, Fidelity, T.Rowe Price or Schwab for DYI'ers. Much good info, ignore the puffery and sales pitches.

Also, if you want to know too much about annuities, listen to Stan The Annuity Man® | Brutally Honest Facts About Annuities podcasts.

Podcast - Have Fun With Annuities(R) | The Annuity Man

Last recommendation is FIRECalc: A different kind of retirement calculator , a Monte Carlo simulation of your future.

FWIW

What are you net out returns?

Fidelity is a good company. They have a lot of mutual funds to choose from. I suggest an Equity Mutual Fund or an S&P 500 Mutual Fund. These funds invest in pretty much everything on the Dow or the S&P 500. Thus, reliably, when the market goes up, your holdings go up, and vice versa. This gets rid of a lot of the risk. Right now, with Biden in the White House (though it doesn’t really have anything to do with him), the stock market is the highest it has ever been. You don’t like inflation? Make it work for you. Make money off the companies that raise their prices and have stock prices. If gas goes up, make money off the profits. If pharmaceutical prices bother you, make money off them by owning a piece of them through a mutual fund.

If you look at a list of the various Fidelity funds, you will notice that some make more money than others and some lose more. This changes! Mutual Funds are safer than individual stocks, but even so, you have to be careful. For example, years ago I read that international stocks were going to go up a lot, so I moved a lot of my retirement funds to there. They did go up, but I don’t pay much attention to all this, so when I looked again, I discovered that they were actually going down now, and other funds were growing.

The nice thing about a good Equity Index Fund is that if one company or industry tanks, other companies may still be doing okay. In a sense an Equity Index Fund means investing in America and providing capital for industry. Another great thing about an Equity Index Fund is that the costs to you may be much lower because they just buy everything on the menu.

The tough thing is that with the market high, if you put in your money right now, if it goes down temporarily, you lose money. Buying low makes more sense, but how do you know when it’s low and not going lower. When Trump was elected, my mutual funds took and went up and up for several years. They nearly doubled! That’s why I could afford to move here. But then, while he was still president, Covid-19 hit, and the stock market tanked, and my funds dropped by several hundred thousand dollars. Ouch! His fault? No, but on his watch. I lost probably half of what I had gained. Buying in when the market is low is great, but it doesn’t work unless you have money to put into it at that moment.

I tried Fidelity managed back in 08. Got out in time. (my wife uses Vanguard) We have an excellent rep now with Fidelity, but they can only say so much..have done well over a million for me. But I'd bet at least half of people here have that much

Please tell us how much over 1%.

One percent is a common starting point in conversation about this topic. The more assets under management one has, the rate can be lower. And vice versa.

Local investment advisors also push annuities. Just say no if you don’t want one. But if you tell an advisor that you want a steady income and ~5% per year return does not produce enough income for your case, then expect any advisor to give you an annuity recommendation.

You know what your needs are better than an advisor and what goals you are trying to achieve. Not all advisors, but many will steer you to what is in their best interest. I'm not saying to ignore them all but do your homework. I'm in the market and also do have two annuities, each for different reasons, but I have set a goal, and this mix meets my needs.

I’ll probably be ridiculed for my answer, lol, but I use an Ameriprise advisor and have used one for 25 years. I’m paying much more than 1%, but he has helped me make some very good, measured, reasonable, decisions over the years that I probably would not have made on my own. Life changes, job changes, inheritances, long term planning, etc. Sometimes it’s more than just what you invest in but what you don't. I think everyone is different. Some enjoy money management. I do not. I value my relationship with my advisor and don't think I’d be where I am without his good advice and steady hand. Different strokes.