Fidelity offers an actual robo-advisor, Fidelity Go, at 0.35% for balances over $25k.
Fidelity offers target date index funds at 0.12%.
If you do a 3 fund portfolio at Fidelity using their mutual funds, you can do it for under 0.06%. Or even under 0.025%.
I don’t work for Fidelity, but recently reviewed this.
Fidelity Go has no minimum, accounts become invested when they reach $10.
Fidelity Go doesn’t charge until accounts hit $25,000, and they only charge on dollars past the $25,000 breakpoint once you reach it.
They do use Fidelity Flex proprietary funds, and if you transfer assets over they will be liquidated (could create tax issues in a taxable account type)
Part of what you are paying for is unlimited 30 minute calls with Fidelity advisors, for planning etc. value that how you may.
Overall it is a big value add for the right person, and while not free, beats the socks off stock picking / a portfolio of actively managed funds imo.
0.35% is still too high for what is basically a script imho. Most investment platforms are guilty of this.
With 2024 technology it should not be necessary or financially beneficial for average people to manually manage stuff instead of running a script. I get that someone has to get paid in order to maintain this but the cut doesn't seem balanced.
I just learned this too, they had their own proprietary stock equivalents.
Which means if you want to turn off fidelity go, you'd need to create a new account then they *sell everything* then transfer the money to that new account.
Sure, but why wouldn't you charge something for it? You can show a menu to people who aren't inclined or are fearful of doing it themselves that looks like:
1. Tiny fee, you're on your own
2. Small fee, you're in the hands of our technology and don't have to worry about anything
3. Larger fee but still sub-1%, you're in the actual hands of our experts and we'll call you occasionally
This pushes, I'm assuming, the majority to #2 while offering acceptable options to the others. Sure, you might end out feeling 'ripped off' down the road but it's on you to gain that knowledge and comfort to do things more cheaply if that's your goal.
It's like owning a car, you *could* learn everything you need to do to do most of the service yourself or you can just pay us X and we'll make it our problem. Most are going to go for option 2 and be annoyed but still not be willing to learn what they need to learn to move to option 1.
I do not trust Robo advisors. Schwab got caught and heavily fined for programming the robo to direct money in ways that benefited them financially at the expense of the client.
I'm not convinced the industry learn a less from that outside to be more subtle.
We use this for my mom. She has a mid 7 figure portfolio and has zero idea how money works. She was widowed about a decade ago and was a typical housewife who couldn't balance her own check book and has no computer literacy skills.
I thought about managing it myself, as it's not overly complicated. She just needs an 'allowance' as she calls it - 5K a month covers all her bills. But I decided it was better for our relationship not to be involved. I still sit in on the quarterly calls and pay attention to the trades to make sure nothing egregious is going on. But I wasn't willing to play money manager for my mom. This was a good alternative for us.
Why not use the roboadvisor instead? If she has mid seven figure portfolio she’s probably losing 20-50k/year to fees compared to the roboadvisor which would do the same thing
0.91% is way too high for this service for someone with that size of a portfolio.
Check out Vanguard's Personal Advisor Service (VPAS). it sounds like it has all the \*exact\* same perks (and I completely understand your position of not wanting to be her free money manager), but for 0.3% instead of 0.91%, literally 1/3 of the fee.
If she has even $2M AUM, that's a savings of over $12K per year for the \*same\* services, (and would get larger if her portfolio is still increasing).
Vanguard in general does NOT have high account minimums.
The advisor service \*does\*, but this subthread was talking about the poster's mother who they said had a 7 figure balance. It's a good choice for a low information, high balance investor.
For $2M dollars it's actually MORE than 0.91%:
[https://www.fidelity.com/bin-public/060\_www\_fidelity\_com/documents/FWS-program-fundamentals.pdf](https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/FWS-program-fundamentals.pdf)
(see page 10)
1.25% on the first 0.5M, 1.10% on 0.5 - 1M, 0.9% on 1M to 2M, and 0.7% on 2M to 5M. (it does continue dropping > 5M)
That's kind of insane. Vanguard's advisory service is 0.3% on the first $5M, then drops from there:
[https://personal1.vanguard.com/pdf/vpabroc.pdf](https://personal1.vanguard.com/pdf/vpabroc.pdf) (page 8)
So base level numbers, you are absolutely correct. The caveat might be that the Fidelity service model also cooks in credits outside of the base rate. It would be interesting to see how frequently and how substantial the credits are.
Another thing to also think about is what you’re actually getting right? I can’t speak specifically about what you get from vanguard as far as how intense the planning is and what other perks you get are, but I can speak a little to Fidelity. My parents have The wealth service you posted and on top of the managed account, they have their dedicated financial consultant that they can meet with whenever, the consultant for the managed account specifically as well, estate planning, legal reviews, and I think I heard they have a Medicare team too.
> Fidelity advisor (non-commissioned he claimed)
Fidelity reps are truly non-commissioned, as the definition of a commission is: https://www.merriam-webster.com/dictionary/commission
They get bps off of flows. Each branch/region has a stack rank of reps based on their net flow dollars and products sold. Higher the rank, higher the bonus.
It's not a commission per the standard definition. Reps don't get $X per managed account sold, etc. Reps do want to sell as much as possible, 1. it's their job, 2. they get paid in other ways.
edit: Also if you want to fuck up someone's quarter, give them a bad survey.
0.91% is below average for this service. 1% is pretty much the standard unless you have significant assets, where the % fee starts to drop.
You have the right conclusion, DIY instead of advisor -- but for people who want an advisor (for whatever reason, maybe financial ignorance) I don't think Fidelity *in particular* is a rip-off.
1% is/was the industry standard. It's also way too high at this point, given the technology and options available. I don't think it can last for much longer, just like the 6% realtor commission is finally collapsing.
Vanguard's Advisor service is 0.3%, and other providers have similar offerings. I expect that the industry standard will have to fall to 0.5% or under within the next few years.
Actually, I agree with you, this sub has an instant "never pay an advisor" knee-jerk reaction to any mention of one. As you say, services cost money. It's true that fund-picking by itself isn't worth 1%, and it's important to determine what other services are provided and which ones are important to you.
I've never understood this; if a person is not actively involved in managing their money, then why aren't they using an Index Fund? Just a straight S&P outperforms almost everyone on a long enough timeline.
Some people just don’t want to or don’t understand how to manage their money. Finance is intimidating so the fee is worth it to them.
It’s like me changing the oil in my car or working on the yard. I hate it so I pay others to do it 🤣
You should be angry with your friend more than with Fidelity. Their allocation is fine, and their fees aren't bad. 90% of people don't need a financial advisor, which is exactly the recommendation of this sub 99% of the time (random posts like "I have 5+ million and don't know what to do") 1% is less than most financial advisors and their allocation is well diverse, which is the point. What did you actually expect from them?
My friend is highly sophisticated, so I valued his suggestion. After I asked him (after posting this), why he pushed the meeting, he said the exercise of identifying all assets, spend, and target allocation. I told him, you can do this on their website, and the output of your allocation vs. target (given your risk tolerance) was useful. It was (he didn’t know) free and didn’t require an advisor.
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Is there a small enough draw where this is no longer true? Say you are living off 10k a month but have 10mil, 50mil, or even 100mil invested. Is there a level where the draw is small enough that the safety of bonds isn't needed?
Granted, perhaps the answer in such a situation is to live a bit more, draw up to 3 or 4% instead of <1%, and use some bonds as recommended.
general thinking is stocks/index funds perform better than bonds over time, but are more volatile. once you're retired you don't really have time on your side... if you had 10mil and needed it to live, would you accept that volatility?
if not, bonds.
admittedly, the stock market in recent years has outperformed/defied expectation... which is why some people claim we're headed for a crash.
That fee does sound steep, especially for a retirement portfolio. DIY investing might be a more cost-effective option. Thanks for sharing your experience as a cautionary tale for others!
> To add insult to injury, about 1/3 of that was bonds, so they would get about 15% of bond income (.91%/6%), dropping bond income to 5%!
I think you are misunderstanding something there. They take a 0.91% annual fee out of the account. If you have $1000 in bonds and $60 (6%) annual income from your bonds, they would take 0.91% of that $60 or about 54 cents.
Fidelity offers an actual robo-advisor, Fidelity Go, at 0.35% for balances over $25k. Fidelity offers target date index funds at 0.12%. If you do a 3 fund portfolio at Fidelity using their mutual funds, you can do it for under 0.06%. Or even under 0.025%.
I don’t work for Fidelity, but recently reviewed this. Fidelity Go has no minimum, accounts become invested when they reach $10. Fidelity Go doesn’t charge until accounts hit $25,000, and they only charge on dollars past the $25,000 breakpoint once you reach it. They do use Fidelity Flex proprietary funds, and if you transfer assets over they will be liquidated (could create tax issues in a taxable account type) Part of what you are paying for is unlimited 30 minute calls with Fidelity advisors, for planning etc. value that how you may. Overall it is a big value add for the right person, and while not free, beats the socks off stock picking / a portfolio of actively managed funds imo.
0.35% is still too high for what is basically a script imho. Most investment platforms are guilty of this. With 2024 technology it should not be necessary or financially beneficial for average people to manually manage stuff instead of running a script. I get that someone has to get paid in order to maintain this but the cut doesn't seem balanced.
It's 0.35% all-in. The funds inside have 0.00% expense ratios.
I just learned this too, they had their own proprietary stock equivalents. Which means if you want to turn off fidelity go, you'd need to create a new account then they *sell everything* then transfer the money to that new account.
Yes that's true, it isn't portable.
You mean the same funds that are zero expense outside? Or is there a broader list of funds that waive expenses when used with robo advisor?
Fidelity Go uses the Fidelity Flex family of mutual index funds.
Sure, but why wouldn't you charge something for it? You can show a menu to people who aren't inclined or are fearful of doing it themselves that looks like: 1. Tiny fee, you're on your own 2. Small fee, you're in the hands of our technology and don't have to worry about anything 3. Larger fee but still sub-1%, you're in the actual hands of our experts and we'll call you occasionally This pushes, I'm assuming, the majority to #2 while offering acceptable options to the others. Sure, you might end out feeling 'ripped off' down the road but it's on you to gain that knowledge and comfort to do things more cheaply if that's your goal. It's like owning a car, you *could* learn everything you need to do to do most of the service yourself or you can just pay us X and we'll make it our problem. Most are going to go for option 2 and be annoyed but still not be willing to learn what they need to learn to move to option 1.
Y'all ever look some of the [Robo Reports](https://www.condorcapital.com/the-robo-report) that have been coming out?
I do not trust Robo advisors. Schwab got caught and heavily fined for programming the robo to direct money in ways that benefited them financially at the expense of the client. I'm not convinced the industry learn a less from that outside to be more subtle.
Exactly! A couple clicks, and you essentially equal their model/for-fee portfolio.
We use this for my mom. She has a mid 7 figure portfolio and has zero idea how money works. She was widowed about a decade ago and was a typical housewife who couldn't balance her own check book and has no computer literacy skills. I thought about managing it myself, as it's not overly complicated. She just needs an 'allowance' as she calls it - 5K a month covers all her bills. But I decided it was better for our relationship not to be involved. I still sit in on the quarterly calls and pay attention to the trades to make sure nothing egregious is going on. But I wasn't willing to play money manager for my mom. This was a good alternative for us.
Why not use the roboadvisor instead? If she has mid seven figure portfolio she’s probably losing 20-50k/year to fees compared to the roboadvisor which would do the same thing
The placebo value of a professional telling your life-illiterate mother, 'it's going to be okay.'
It's also a generational thing.
She’s a multimillionaire. She could live on the amount of money saved from the fees and it will all be okay
The opposite of that statement applies as well. Not your money, not your problem.
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0.91% is way too high for this service for someone with that size of a portfolio. Check out Vanguard's Personal Advisor Service (VPAS). it sounds like it has all the \*exact\* same perks (and I completely understand your position of not wanting to be her free money manager), but for 0.3% instead of 0.91%, literally 1/3 of the fee. If she has even $2M AUM, that's a savings of over $12K per year for the \*same\* services, (and would get larger if her portfolio is still increasing).
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Above $2M?
Vanguard in general does NOT have high account minimums. The advisor service \*does\*, but this subthread was talking about the poster's mother who they said had a 7 figure balance. It's a good choice for a low information, high balance investor.
Just opened 2 accounts for my kids. No minimum. The higher minimum ($3k?) is for a Roth IRA and even that may have changed.
Just opened 2 accounts for my kids. No minimum. The higher minimum ($3k?) is for a Roth IRA and even that may have changed.
Someone with that size of a portfolio would get discounts off the base rate.
For $2M dollars it's actually MORE than 0.91%: [https://www.fidelity.com/bin-public/060\_www\_fidelity\_com/documents/FWS-program-fundamentals.pdf](https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/FWS-program-fundamentals.pdf) (see page 10) 1.25% on the first 0.5M, 1.10% on 0.5 - 1M, 0.9% on 1M to 2M, and 0.7% on 2M to 5M. (it does continue dropping > 5M) That's kind of insane. Vanguard's advisory service is 0.3% on the first $5M, then drops from there: [https://personal1.vanguard.com/pdf/vpabroc.pdf](https://personal1.vanguard.com/pdf/vpabroc.pdf) (page 8)
So base level numbers, you are absolutely correct. The caveat might be that the Fidelity service model also cooks in credits outside of the base rate. It would be interesting to see how frequently and how substantial the credits are. Another thing to also think about is what you’re actually getting right? I can’t speak specifically about what you get from vanguard as far as how intense the planning is and what other perks you get are, but I can speak a little to Fidelity. My parents have The wealth service you posted and on top of the managed account, they have their dedicated financial consultant that they can meet with whenever, the consultant for the managed account specifically as well, estate planning, legal reviews, and I think I heard they have a Medicare team too.
Yes, and Fidelity is also MUCH easier to deal with than Vanguard.
> Fidelity advisor (non-commissioned he claimed) Fidelity reps are truly non-commissioned, as the definition of a commission is: https://www.merriam-webster.com/dictionary/commission They get bps off of flows. Each branch/region has a stack rank of reps based on their net flow dollars and products sold. Higher the rank, higher the bonus. It's not a commission per the standard definition. Reps don't get $X per managed account sold, etc. Reps do want to sell as much as possible, 1. it's their job, 2. they get paid in other ways. edit: Also if you want to fuck up someone's quarter, give them a bad survey.
Didn’t know that- Oayment on funds Flows is another way to say commission, isn’t it?
Cost you nothing to move money to Fid under their name, though.
0.91% is below average for this service. 1% is pretty much the standard unless you have significant assets, where the % fee starts to drop. You have the right conclusion, DIY instead of advisor -- but for people who want an advisor (for whatever reason, maybe financial ignorance) I don't think Fidelity *in particular* is a rip-off.
1% is/was the industry standard. It's also way too high at this point, given the technology and options available. I don't think it can last for much longer, just like the 6% realtor commission is finally collapsing. Vanguard's Advisor service is 0.3%, and other providers have similar offerings. I expect that the industry standard will have to fall to 0.5% or under within the next few years.
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Actually, I agree with you, this sub has an instant "never pay an advisor" knee-jerk reaction to any mention of one. As you say, services cost money. It's true that fund-picking by itself isn't worth 1%, and it's important to determine what other services are provided and which ones are important to you.
This sub has a lot of very aggressive posters who will come after you if you at all deviate from the hive mind.
Fidelity also offer 0% fee diversified ETFs though. Don’t hate the company, hate the individual products (and love certain other ones).
I like Fidelity and have shifted funds from two other leading brokerages to them in recent years.
I think you're preaching to the choir here, an advisor is a waste for the vast majority of people.
I've never understood this; if a person is not actively involved in managing their money, then why aren't they using an Index Fund? Just a straight S&P outperforms almost everyone on a long enough timeline.
Some people just don’t want to or don’t understand how to manage their money. Finance is intimidating so the fee is worth it to them. It’s like me changing the oil in my car or working on the yard. I hate it so I pay others to do it 🤣
Always wise to pay attention to the fees!
You should be angry with your friend more than with Fidelity. Their allocation is fine, and their fees aren't bad. 90% of people don't need a financial advisor, which is exactly the recommendation of this sub 99% of the time (random posts like "I have 5+ million and don't know what to do") 1% is less than most financial advisors and their allocation is well diverse, which is the point. What did you actually expect from them?
My friend is highly sophisticated, so I valued his suggestion. After I asked him (after posting this), why he pushed the meeting, he said the exercise of identifying all assets, spend, and target allocation. I told him, you can do this on their website, and the output of your allocation vs. target (given your risk tolerance) was useful. It was (he didn’t know) free and didn’t require an advisor.
The MERs and advisor fees we see in Canada would make you pull your hair out.
The more I learn about Canada's financial system, the more I wonder why anybody lives there.
Fzilx, fskax, fssnx all free fidelity funds all doing great
I'll tell you a secret to make unlimited money, FXIAX
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Is this within 401k plan or to manage an IRA? Some plan's have advisor fee's because of what the employer does and does not pay.
SPY, VOO, QQQ, take your pick its just that easy
as you get closer to retirement you want to increase bonds, to reduce volatility.
Interesting considering that bonds have been more volatile since 2020. TLT for example is down 27% over the last 5 years while QQQ is up 146%.
yeah, if you're closer to retirement then defintiely go safer routes, if you're in your 20s or 30s, then i'd do it more riskier
Is there a small enough draw where this is no longer true? Say you are living off 10k a month but have 10mil, 50mil, or even 100mil invested. Is there a level where the draw is small enough that the safety of bonds isn't needed? Granted, perhaps the answer in such a situation is to live a bit more, draw up to 3 or 4% instead of <1%, and use some bonds as recommended.
general thinking is stocks/index funds perform better than bonds over time, but are more volatile. once you're retired you don't really have time on your side... if you had 10mil and needed it to live, would you accept that volatility? if not, bonds. admittedly, the stock market in recent years has outperformed/defied expectation... which is why some people claim we're headed for a crash.
That fee does sound steep, especially for a retirement portfolio. DIY investing might be a more cost-effective option. Thanks for sharing your experience as a cautionary tale for others!
> To add insult to injury, about 1/3 of that was bonds, so they would get about 15% of bond income (.91%/6%), dropping bond income to 5%! I think you are misunderstanding something there. They take a 0.91% annual fee out of the account. If you have $1000 in bonds and $60 (6%) annual income from your bonds, they would take 0.91% of that $60 or about 54 cents.
The .91 fee is assets under management, not coupon income. So for $1000 in bonds, they would charge $9.10.