Would you let your friends/relatives be in charge of your investments?

[Esozh]

My fiancees father owns an investment firm. He wants us to switch our investments to his company. I refuse to because he charges a 1.6% management fee, which is ridiculous, and I told him as much. He asked why we haven't had a meeting with him about setting up accounts at Sunday Dinner in front of the entire family, and I told him that I have accounts with Vanguard at 0.27% management fees, and his prospectus has a 1.6% rate...

He went on about how you have to do all the leg work yourself with Vanguard, etc. I told him, that's fine, then I know what I'm investing in and why, and that doing that little bit of work amounts to almost $200,000 over 40 years as opposed to a 1.6% management fee. My fiancees Mom saw the conversation was quickly getting out of hand, and changed the topic. Her Mom is also certified in all the investments in the company, and knew that I knew what I was talking about.

My fiancee later said that everyone in the family except us has their money invested with her Dad, and my openly saying that I thought he charged too much and why came off as undermining their decisions in investing in his firm.

I told my fiancee that if her Dad agrees to lower his management fees for our account to match Vanguards, then we will switch, since he has a comparable rate of return.

I don't know how to handle the situation. I'm not willing to pay a 1.6% management fee - end of story. But, at the same time, it's my soon to be father in law. My fiancee said she's staying out of it - it's between me and her parents. I handle all of the long term finances and she does all the short term stuff. I tell her what we need for long term planning, and she budgets it. Not a problem.

Her Moms concern is that she wants to know that we're saving for later, and since we're the only ones not with them, they think we have nothing... then when I dropped that we are using Vanguard instead of her Dads firm... the look on his face was like I just completely insulted him...

Is there any good way to manage this situation?

[MonkeyMama]

Is there any good way to manage this situation?

Probably not.

They are drinking the koolaid, for one, and secondarily it sounds like maybe there is an element of control in wanting to oversee your finances.

I think it's between you and your fiancee. IF she is okay with things, I think I would just tell her parents that it's not up for discussion and change the subject. What else can you do? Your fiance should be helping you with this though - in communicating this to her parents. I think her stance to just say "It's between you and them" is very wrong. My spouse has quite over-bearing parents at time, and what helps is when we show a united front. If he didn't *always* take my side and stand up for me, our marriage would be in a shambles. It's the only way it works. If he just sat it out and told me to deal with his parents I don't see how our marriage would have ever lasted. So, I'd proceed with caution on that. (I think it's a little different because we are talking reverse gender roles, maybe they figure this is a man-to-man type discussion, but I would just think carefully about the situation).

I can somewhat relate (not on this level though, for sure) because my spouse's entire family is invested with some big expensive brokerage house. (NOT Family). What a mess. I am honestly surprised the in-laws seem to have enough to retire on. Those high fees can make such a huge difference to your bottom line. I saw it put this way rather recently: If your withdrawal rate in retirement is 4% and you are paying the standard 1% fee for financial management... That's 25% of your retirement income going to fees. Really makes you think! This is Basic Investing 101 - limit fees for best returns.

& then there's Bernie Madoff. This whole situation would make me so wary... I would not let anyone else ever be in charge of my investments.

[disneysteve]

My fiancee said she's staying out of it

This is a HUGE red flag for this situation. This isn't your father. It is HER father. She should not be "staying out of it." She should be the one speaking to HER father and explaining that she's a big girl and she and you can manage your own finances without his assistance. Thank him for his concern but let him know that it isn't open to discussion.

I see this being a major issue in your relationship going forward. Since the number one cause of divorce is money issues, I wouldn't be at all surprised to hear that this sinks the marriage at some point if she decides to side with her father instead of her husband. Good luck avoiding that.

[disneysteve]

I told my fiancee that if her Dad agrees to lower his management fees for our account to match Vanguards, then we will switch

I would retract that offer immediately! You do NOT want this guy knowing your personal business. That can only turn out badly. Again, I would politely thank him for his concern but make it perfectly clear that you prefer to manage your own investments. Just be prepared for the blow back since you will apparently be the only person in the family who has ever not given in to his control.

[Baby_nurse]

Nope. Family is family and money is money. Never the two shall meet.

[snafu]

Oops, the Sunday dinner table in front of the entire family is not the time or place for that discussion. My first reaction to inappropriate questions is to wonder why the individual is asking. Why is he fishing for your business? I'd stay mum if possible. If it's brought up again I'd offer to discuss it at a later time and more importantly, in the office, in private. If you can get away with it - say you found fiancees father's unexpected question inappropriate and embarrassing. Had you had time to think about an answer you'd have been less defensive [something to that effect] to smooth things over.

Like DS says, politely, calmly, unemotionally explain your preference to continue to manage your financial affairs including investments. While I totally agree with MM, I sure wouldn't say those words out loud. I'd totally decline to talk about your view of managing your finances yourself with the others who use father's services.

[Like2Plan]

My fiancee later said that everyone in the family except us has their money invested with her Dad, and my openly saying that I thought he charged too much and why came off as undermining their decisions in investing in his firm.


Is there any good way to manage this situation?

Your fiance didn't think it was a tad bit inappropriate for her Dad to discuss your finances in front of everybody? It doesn't sound like this would be a professional relationship even if her Dad lowered the fee.
I agree with everyone else--in that your finace has to be with you on this. It is not between you and her parents. Her parents have no business in your finances.

I don't know the dynamics, but do you think the subject will come up again? It sounded like you were pretty direct and made your position clear. I think I would be more than a bit upset if her Dad asked again.

[LuckyRobin]

I would simply say something along the lines of "I just don't believe in mixing family with money matters. In my experience no good ever comes of it."

And the fiancee does need to back you up. Her family needs to see that you are on the same page. And if you aren't on the same page then you have bigger troubles than where you want to keep your money.

[shaggy]

I hate when family members and friends look at me like a lamb to be fleeced.

Just say no...

[bjl584]

Say NO.

You don't want your Father in Law knowing the details of your finances. You also don't need to pay his 1.6% fee.

And, your wife needs to get involved. As stated, it's her father.

[autoxer]

Tell them you only invest in fine wines and antique automobiles.

[Esozh]

I'll get on the same page with my fiancee about how to talk to her Dad about this. I know she doesn't want to be involved in it because her Dad has one heck of a temper and will go off on people without thinking and then come back later and apologize - it's like a teenage boy sometimes.

Finances at Sunday Dinner is a typical topic, usually weekly. I know everyone in her immediate familys exact financial position. And yes, everyone knowing everyone elses finances does create issues.

It won't be the end of the discussion with her Dad.

[disneysteve]

I'll get on the same page with my fiancee about how to talk to her Dad about this. I know she doesn't want to be involved in it because her Dad has one heck of a temper and will go off on people without thinking and then come back later and apologize - it's like a teenage boy sometimes.

Finances at Sunday Dinner is a typical topic, usually weekly. I know everyone in her immediate familys exact financial position. And yes, everyone knowing everyone elses finances does create issues.

It won't be the end of the discussion with her Dad.

I think I'd be busy on Sunday nights from now on and not available to attend the family dinner.

Seriously, you need to get this settled once and for all BEFORE you marry this woman. It needs to be perfectly clear to everyone involved that your finances are your business. Having a control freak who doesn't respect boundaries as a father-in-law will poison your relationship if you don't come to some mutual agreement.

[Petunia 100]

I'll get on the same page with my fiancee about how to talk to her Dad about this. I know she doesn't want to be involved in it because her Dad has one heck of a temper and will go off on people without thinking and then come back later and apologize - it's like a teenage boy sometimes.

Finances at Sunday Dinner is a typical topic, usually weekly. I know everyone in her immediate familys exact financial position. And yes, everyone knowing everyone elses finances does create issues.

It won't be the end of the discussion with her Dad.

Then you need to learn to politely tell them to mind their own business. Just say something along the lines of "We have a solid plan in place, thank you" with a smile. If you are pressed for further information, you say "We prefer not to discuss it". Then, don't budge. You're going to have to learn to draw firm boundaries with your future in-laws.

[disneysteve]

You're going to have to learn to draw firm boundaries with your future in-laws.

And both you and she need to be holding that pen together when you draw that line.