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Personal Capital and Professional Managed Investments experience

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    Personal Capital and Professional Managed Investments experience

    So I use personal capital to just keep my investments in one place and use it as an X-Ray for what I'm invested in. It's nice. I plan everything. Well I get this email about a free CFP consultation. I say fine I"ll give them an hour. The first meeting was a 30 minute sales pitch, then a week late for a "specialized" financial plan. So today I listened for an hour about why index funds are bad. Why I can't do it myself. Why I should pay them 0.89% to manage my investments.

    Here's what they said. They actively help keep the portfolio balanced by selling high and buying low keeping all 90 stocks they pick in proper balance. This way there is no need for VTI or any other index fund I own. I am TOO heavily invested in index funds and bonds for my age and aggressive risk tolerance. They also feel that I should put bonds and stuff into my IRA and not invest in municipal bonds. I am in not the highest bracket that municipal bonds are not good investments. She also did not know what an I-bond was when I told her I already bought I-bonds. She also said I am keeping too much in cash right now and that I need to invest in stocks because I am too heavily invested in technology 23% because I have too much VTI. That means my risk exposure is too much. That owning index funds means I can't tax loss harvest and I have to pay too much on dividends.

    Their recommendation get this was 90 stocks they actively manage and tell me when to buy and sell and it's out of balance. Then for small caps they have the NERVE to suggest using a small cap index fund because they aren't familiar enough with small stocks. SIGH. They also use index funds to invest in internationally which I already do owning both emerging markets international, index international, and international bonds. I also have REIT ETF sectors and I have a UCO which we lost a bundle a few years ago.

    So she said I am obviously not familiar with how to tax allocate. I told her that based on my calculations on our portfolio I am efficiently investing with risk in Roth, best choices for DH's 401k (lowest cost and best mutual funds), and I am buying and holding once a year in our taxable account. I also have i-bonds. Right now most of our dividends are qualified. So 15% so WTF is she talking about why I would put bonds into a Roth IRA or any IRA we hold when you want things with explosive growth? Plus we plan on converting money upon retirement before age 70.5? I sat there stunned that this woman (who by the way didn't even have CFP) had the nerve to tell me I don't understand tax loss harvesting, when I asked her if she understood what a qualified dividend was and she couldn't explain it.

    I sat there so stunned. I was like look tell the cost. She finally said 0.89% which is small fee for such large gains. I told her you can beat my gains using index funds and my balanced portfolio with proper tax balance by 1%? I doubt it. Maybe to someone who invests in CDs or nothing. But I was horrified that this is what most people sell. I know this is what is being sold to my parents. I mean I told my mom to buy some i-bonds. Her financial advisor had to go and "research" such things. Yep.

    Apparently when I told her I didn't want help evaluating my portfolio she insisted I needed advice. When I told her I had a 10 year plan but more like 16 year plan she didn't listen. 2034 puts us at 56 and 55 for DH and I and both kids are 22 and 25 and out of college. Now my plan puts us at 2028 being done but I know my DH hesitates with college looming big at that point. So we'll take it OMY at that point.

    But the suggestions that they could use Data to properly balance and track our 90 stocks and keep 'buying' and holding just selling stocks to rebalance was CRAZY. The tax implications, the costs of buying and selling.

    Has anyone else thought this? I was thinking if I posted in bogelheads it would be horrifying this experience.
    LivingAlmostLarge Blog

    #2
    BAAAAAAAAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH AHAHAHAHA :::deep breath::: HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

    That is absolutely the funniest thing I've seen since I watched an amateur magician smash a rolex with a hammer.

    That is one of the most ridiculous sales pitches that I've ever heard. The least she could do was to be an informed & courteous salesperson. Not being qualified as a CFP (contrary to the advertisement) is a pretty big Strike 1.
    Strike 2: Being ignorant of a wide variety of common investment products (I-Bonds), and even major asset classes (small cap & international)... !!!
    Strike 3: Accusing me of holding too much in index funds, telling me I'm making mistakes with my money, then dare to suggest that I pay them a hefty fee to do THE EXACT SAME THING?!?! Come on!!
    Strike 4 (yeah, it's a thing now): Having the stones to call ME ignorant (the person who has successfully amassed a net worth high enough for them to be practically salivating) & insist that I'M the one who knows nothing about investing, in spite of ME having to explain to THEM all of the aforementioned topics.

    ​​I could keep going, but those are the biggest red flags that started screaming at me. Holy smokes, what a joke. I hope you shut her down with something roughly along the lines of "No, never, not in a million years, and don't you ever even dream of calling me again."

    If you were to take this to social media, you could troll them 9 ways from Sunday. These new "robo-advisor" companies rely heavily on their social media image, and it would be just hilarious to watch the chaos as they try to contain the mess from this botched sales call.
    "Praestantia per minutus" ... "Acta non verba"

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      #3
      It was awful. I mean my mouth hung open during the presentation when I pointed out I had index funds for small cap and international she said "well where we do better is the 90 stocks we tell you to buy and when too buy and sell so you are never out of balance. You are constantly balancing your portfolio so if there is a large gain in technology you can buy other stuff." It was terrible.

      Besides that she said if I picked them then another CFP financial advisor would be assigned me. She's just the point person to respond to phone calls and stuff.
      LivingAlmostLarge Blog

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        #4
        90 stocks can generate a lot of fees. Especially if the shares are sold in small blocks.

        Very bad info all around and if the same speech is given to someone who doesn’t have a clue then that firm makes lots of money. For themselves. Not the investor.

        funny how 90 stocks is more diverse than VTI which consists of a few thousand different stocks.

        Comment


          #5
          Originally posted by Jluke View Post
          90 stocks can generate a lot of fees. Especially if the shares are sold in small blocks.

          Very bad info all around and if the same speech is given to someone who doesn’t have a clue then that firm makes lots of money. For themselves. Not the investor.

          funny how 90 stocks is more diverse than VTI which consists of a few thousand different stocks.
          This is how they make their money. The 0.89% AUM fee is not bad. The fees for constantly churning 90 stocks will devastate any ROI.

          Instead of feeling insulted and aghast, you should take great pride in your knowledge of how to do it right. Takes a while to get all of the aspects of investing pulling in the same direction efficiently. You are interested in your goals, she was interested in her goals. They were not aligned.

          This crook will get many less experienced investors to buy into her snake oil sales pitch and fleece them for a lot of money. The financial industry makes a lot of money adding zero value.

          I will say that the CFP I met with was a winner. We talked for an hour and a half about everything and he was smart. I would have hired him, but we already have about as simple a portfolio as one can get. Total stock, total bond, total international. 401k, 2 Roths and taxable. That's all. So not much for a manager to do.

          Comment


            #6
            Nope, i think paying someone to see if you are on the right track. Evaluate give you ideas if you can retire works. I told her that I do a bernstein index fund portfolio working off my DH's 401k. Did not understand it at all.
            LivingAlmostLarge Blog

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