An SMA is almost guaranteed to be a loser, the only way for the broker to show extra returns (esp if they're using a fund) is to take on extra risk. This is the part they leave out. That they set up 50 different approaches, doubling or tripling risk, one or 3 will pay off and provide an extra bunch of basis points in return.
Said differently, would you bet on a coin flip (knowing it's 50-50) if the odds offered were only one to ten (meaning a win paid 10 cents not a dollar).
If what your friend wants is TLH, Schwab offers that in their robo-portfolio, at zero extra cost. Now there are complaints about this program, but my back of the envelope math says the hidden cost of this program is around the 0.3% that Vanguard charges for advisory services, with things like TLH, so a pretty good value and something I'd consider.
If he's OK with an extra 0.4% built into the fund, and then paying more for management, why not just hire Vanguard Personal Advisors, they use the cheapest funds and give you the TLH for 0.3%.
PS I really like FIDO for DIY, their digital interface is top, offerings top, mobile app excellent, but for premium services they tend to charge more than both Schwab and Vang, for the same or virtually the same services. Y
Said differently, would you bet on a coin flip (knowing it's 50-50) if the odds offered were only one to ten (meaning a win paid 10 cents not a dollar).
If what your friend wants is TLH, Schwab offers that in their robo-portfolio, at zero extra cost. Now there are complaints about this program, but my back of the envelope math says the hidden cost of this program is around the 0.3% that Vanguard charges for advisory services, with things like TLH, so a pretty good value and something I'd consider.
If he's OK with an extra 0.4% built into the fund, and then paying more for management, why not just hire Vanguard Personal Advisors, they use the cheapest funds and give you the TLH for 0.3%.
PS I really like FIDO for DIY, their digital interface is top, offerings top, mobile app excellent, but for premium services they tend to charge more than both Schwab and Vang, for the same or virtually the same services. Y
Statistics: Posted by trueblue63 — Sun Dec 08, 2024 7:26 am — Replies 11 — Views 662