You really need to tell us BEFORE you are going to do that. 
Out of curiosity - how long have you been with your financial advisor(s). We have two - one is older than us and we are less satisfied with the results and one is our age and much more responsive. There is a third advisor we are meeting with who is younger than us by about 10 years. We have been unhappy with the older advisor for a few years and are thinking about moving the money to the younger one. Is there a huge expectation of loyalty? How do you feel about it?
I am my financial adviser. So as much as my wife has wanted to fire me on occassion, its not gonna happen.
But to me, its business and critically important part of your life. If you are not happy, I would change and not give another thought to it. Older adviser should understand its business and not have an issue with it. Easier to say than do but that is just the way it is. Are they all at the same firm? If so, you may see your former adviser when you go to the office which could be a little uncomfortable (more so the closer you are to him/her). If not at the same firm, less of an issue.
You could also move to a different firm and go with a totally different adviser than the 3 you mention. Would ask around though to see what current clients think.
If 3 are at the same firm, they should prefer changing advisers over losing your business to another firm.
Are you dissatisfied with the older advisor because he has been more conservative with your portfolio the past few years and missed a lot of the market appreciation or is he less attentive? If the latter, time to move. If the former, anyone can make you money in a rising market, the good advisors are the one who prevent/mitigate losses in down markets and out perform over a long period of time. One way to assess the 2 advisors is to compare their performance against a risk weighted index. One guy may have absolutely performed better only because he took riskier positions that paid off, but compared to a risk adjusted index, he may in fact have under performed.
I am my own advisor, with the help of the boglehead community. Knowing what we are invested in and why is important to me.
I was appalled at my momās advisor. Will talk to my sister next weekend to make sure she moves her inherited IRA out of that shop ASAP.
There is no loyalty. You are literally paying them to be nice to you, and most manage to be friendly. But you are only their friend as long as you are paying them. If you donāt like the way they manage your money you can do it yourself or pay someone else to be nice to you.
We have been with our financial advisor for about 20 years since H left a government contractor and needed to roll over his 401K when he was going to a start up company. Our situation is a bit different as our advisor has been a personal friend of mine since I was 16.
Thanks for the feedback everyone. The older advisor owns the firm and whenever we have a question (like how come we only made X on Y last year) it seems to have to be asked to a committee and itās days before we get a response. The second advisor is with a different company and the third, potential advisor is with a bank. We have some cash accounts that we manage ourselves through robin rood and TD and are consistently outperforming our older advisor.
Good issues to ponder.
Itās interesting to me that the implicit assumption above is that because you donāt know how long youāll live, you should try and ensure that your retirement savings balance stays constant in real terms. That forces you to save much more than a traditional pension would put aside because those pensions would terminate on death (of you and/or your spouse).
In the US thereās a huge aversion to annuities which I donāt understand fully, whereas in some other countries you have (at least until very recently) actually been forced to buy an annuity (on the basis that it prevents seniors from running out of money and relying on the government for support). But then US savers are much more comfortable with equity risk than savers in other countries.
One does need to be comfortable with the risk and reward, and also review advisor performance as well as established trust. You have to also weigh out who to trust.
I have misplaced my trust in a few people that have derailed me in career and in my health.
My sister and her H are somewhat conservative (she is 66 now and he is 82) - in spending and in comfort level with risk. They will not run out of money, but tend to be more frugal than they need to be. But they are comfortable with those decisions. They are being quite conservative with contacts with children/grandchildren - but again they are risk averse.
H does not wear suits unless most formal occasion. He feels more comfortable in sport coat (not much different IMHO but in part the style of pants is what makes him more comfortable). He got a really good fitting on a suit that was the same for all the men in DDās wedding - he really likes that suit as it fits him well. As an engineer in a manufacturing facility, he usually wears a golf shirt and blue jeans w/o holes, along with a running type tennis shoe. Years ago he always wore dress slacks, dress shirt, and dress shoes. Now, if customers are in, dress shirt, dress slacks, and dress shoes - maybe a tie but usually not. Church is dress shirt, dress slacks, and dress shoes - sometimes a more dressy golf shirt; Christmas and Easter is with a tie, and maybe Motherās Day if a big family meal out after church.
I juggles around Hās 401k money when I saw what fund groups did well on the downturn 1st qtr and the historic 10 year. I acted early July and moved some moneys around in the 4 fund groups based on returns. Qtr 2 gained all the losses from 1st qtr back plus some. Now our 1/1 to 8/4 is overall gain of 12.86%. 4/1 - 8/4 is up a whopping 40.1%, and 7/1 - 8/4 is up 8.40%. Glad to see the funds doing well. It makes up for some of the yukky stuff with Covid.
Best of all, family is staying Covid-19 free.
Weāve been with our current FA about 6 years. Left the former one when they kept pushing us to move our āsafeā money to their portfolio. They supposedly were full fiduciaries, but we felt they were not listening to our preferences, and instead wanted to increase their fees (with more money under their management). They also became much more reactive over the years, rather than proactive.
Our current advisor recently switched us to the firmās newbie. I like the larger firm, but the newbie is VERY young, and imho very inexperienced. Iām guessing they did that because we are at the low end of net work clients for them. On the positive side, he is very responsive. We get answers to any questions usually within a day. We also hopefully still get the oversight of the full firm. Weāll probably remain with him for another year, and decide our next move, either remaining with the current firm, or moving on.
Like the first, the new firm is also becoming more reactive than pro-active as well. They answer our questions, but rarely contact us with suggestions or advice. If all I want is to park money in mutual funds, I donāt need to pay a firm for that, and could instead use Vanguard funds, but DH wants the more personal service. Discussion in process.
Sales of annuities in the US continue to hit records, so whatever aversion exists, seems to be lessening. And the word, āsalesā is the key; annuities are sold, and not necessarily bought. They are an investment with an insurance wrapper after a hefty sales commission is paid. You āwinā if you outlive the pool. (But note that annuitants tend to be healthier and live longer than the regular folks on SS mortality tables, so you have to have long-lived genes to outlive the pool.)
An annuity will not prevent anyone from running out of money. It just creates a fixed cash flow payment until death. But to obtain that fixed cash flow, one has to part with a big tranche of cash today. For example, a $1m annuity today will yield ~$6500/mo for life starting in four years. (They key is you have to have $1m today to give to the insurance company.) Obviously, if one spends more than $6500/mo., one will run out of money if that is the only āincomeā.
What annuities do for most is to reduce sequence of returns risk, i.e., having to sell assets in a down market.
Not a fan of annuities for most people. I suggest everyone read broadly on the topic before diving in.
But why? The cost of the insurance element and/or sales commissions?
It seems thereās a range of people for whom they would make sense, not the very poor (who wouldnāt get enough income to be useful) and not the very rich (who will never spend down their assets). But in the middle, it seems that an annuity should be a sensible option, because a 3% withdrawal rate means you have an unreasonably penurious retirement, and your retirement fund was saved to live on in retirement not to leave to your heirs. Why should your aim be to preserve the capital in your retirement account until your death (let alone increase it in line with inflation)?
A pension fund covering large numbers of people can get a reasonably accurate guess about ages-at-death distributions over the large numbers of people and plan accordingly. But an individual looking at 1 or 2 people could end up with an outlier case far from the average, so the plans need to cover a wider range of outcomes.
Perhaps the aversion to annuities among some people comes from:
A. High fees.
B. Past incidents of well known insurance companies failing, causing people who bought annuities from them to lose their life savings.
Why do you believe that insurance companies can beat that after commissions & expenses? (Purchasing an annuity today ā meaning that the insurance company will invest your tranche today in a pool with many like-minded others ā with interest rates near zeroā¦)
Some/many would prefer to leave something to heirs or a favorite charity. (Even colleges!)
Disagree. Depending on how they are structures, an annuity can yield a tax benefit, which can benefit the wealthy more.
āWhy do you believe that insurance companies can beat that after commissions & expenses?ā
Because thereās a return of capital element. If you are (optimistically) expected to live 30 years after retirement, then you should be getting back ~3% pa even without any earnings on the investment. Current immediate annuity rates for a 65 year old male are about 5.5% and index linked annuities should be about 4%.
After some back and forth, H will officially retire later this month. Iāve been mostly retired except for pro bono and small gig jobs for over a decade.
A benefit of his job is $$ to spend on financial planning/tax preparation. This will continue for a year. After that weāre comfortable managing it ourselves. Almost all accounts have been moved to Fidelity; trust/wills are in place and up to date. We had a Monte Carlo analysis run for a couple different scenarios and we will be fine even if things tank.
His life insurance (again a job benefit) will stop after a year too. Thatās fine. House is paid off and kids are self sufficient.
On to the new chapter! And the husband hobby thread.
If you are referring to āpayout rateā, then I agree. But that number only looks good from the insurance companyās perspective.
I ran an IRR on 30 years and obtained ~3.8% (for a 65 yr old male), but that too is not the correct methodology, which would be to decrement every yearās cash flows against a mortality table, and then run the IRR on those decremented cash flow amounts. For example, a male at 65 has a ~1.6% of not making it to 66. Someone who hits 85 has a ~10% chance of not making it to the next year*.
*Per SS mortality tables. Of course, insurance companies have preferred tables with longer longevities.
My wife is retiring @ 62 in December. Iām working at a University job and plan to stay for a while , at least for 12 more years until I turn 70, so we have enough income to cover our day to day expenses + health insurance, and even continue to add to my 401a/403b plan and supplemental Roth plan. Our family members live well into their 90ās (typically) and we are in much better health than the previous generation. We are well funded for retirement too, but nothing too extravagant.
Iām wondering when everyone started, or plans to start social security. We were thinking about waiting until it maxes out (age 70). What did you do and what was your decision process?
Also, have you purchased a retirement home, do you maintain two homes now, and do you plan on consolidating to a single home? We are looking at purchasing a retirement home with a mortgage and just making the payments until we get social security, then paying it off with that cash flow. Is this a dumb idea or would you tap into your retirement/rainy day funds early?