Advice on Asset Manager selection
 

I have typically traded on my own for the better part of my adult life but due to time constraints I'm considering looking into an asset management company to handle my retirement. Can anyone offer any insight into your experiences - pros and cons with going with someone and what the typical annual maintenance fees ran and whether you had to pay a per trade fee as well.

Thanks for any insight you may offer.

DAL

Maybe not exactly what you want to hear, but possibly some of the best advice you may ever get.

Why I Fired My Broker - Magazine - The Atlantic

The article is a great read. Begin your search by finding people with similiar situations/goals as yourself i.e. kids, homes, lifestyle etc. Find out what they do and go from there. My wife and I paired up with some friends and found a manager we like. With 12,000+ pilots at DAL you should have a good foothold to start your search.

Annual account maintenance fees will likely be upwards of 1% if you go with some sort of asset manager. If you go with the typical asset manager, not only will you likely pay that 1% asset fee, but then you'll likely pay for all the crappy loaded funds he will put you into.

If you felt comfortable enough to trade your entire life, then you must have some knowledge of the markets available for you to invest in and how they work. If you dig a little deeper, you can easily see that most financial "experts" underperform the market, especially when you look at long periods of time. Some will outperform either by luck or skill, but regardless I do not know of any way for me, you, or anyone else to know in advance who those people will be. If you do, let us all know!

How about this: you do have time to invest and manage your own money and the only person who will care about your money as much as you is you. It doesn't take more than a few hours a year to set yourself up with a plan, stick to it, and just make auto-contributions to it every paycheck. Here's a really easy portfolio that will take all of about a few hours a year to research and balance every year:

Vanguard Total Stock Market
Vanguard FTSE All World ex-US
Vanguard Intermediate Term Treasuries
Vanguard Inflation Protected Securities

Want to slice and dice a little more? Throw in small percentages of Vanguard Small Cap Index and Vanguard REIT Index.

Divide your bonds between the two bond funds. The more conservative you want to be, the greater the percentage of your total portfolio you put in bonds. Throw 20% or so in the All World fund. Throw the rest in Total Stock Market.

Bingo. Instantly diversified portfolio in about an hour. Rebalance once a year to bring back your allocations to the desired ratios according to your financial goals and tolerance for risk. I just saved you tens of thousands of dollars, maybe more, in management fees. By investing using index funds you will likely beat most money managers over long periods of time as they waste their clients' money on wrap fees, loaded funds, taxes, transaction costs, and plain bad investment choices. But of course, do not believe me. Read what unbiased academics have to say.

If you absolutely must use a money manager, I would go with Rick Ferri. He is an accomplished author and CFA. He charges low fees and uses almost entirely index funds. Here is his website:
index funds and exchange-traded funds, ETFs: Low cost investment manager, Portfolio Solutions

I'll put in a recommendation for doing it yourself with the Snider Investment Method. With the Fidelity BrokerageLink we have at Delta, we are one of the few 401k/DC Plans where this method can be done.

You can read about it at Snider Advisors web site and figure out whether it is a good fit for you. I like that it takes minimal time and effort (a few hours one day per month)... and for the six years I've been using it, it has performed exactly as designed.

I recommend two books by Michael Lewis: Liar's Poker and The Big Short. They will not make you a financial acrobat, but will help you enjoy the circus. :rolleyes:

Reminiscences of a Stock Operator - Wikipedia, the free encyclopedia

The games are as old as the markets, many find this book a very good place to start.