Financial Planning Notes

Dear Friends and Family,

First off, I had the weirdest dream. I dreamt I was growing taller. I had those dreams a lot when I was a teenager, but I can't say I've had them since. Weird.

I had a chance to catch up with a friend last night and I realized I didn't do justice to the whole financial planning quandary. These are a couple of aspects we're considering:

Fees

One firm charges up front fees of ~3.5% and then there's no incremental charges over the life of the investment, the other charges nothing up front but charges ~1% every year. The up front costs more up front, obviously, but over the life of the investment costs less.

Active Investing

The firm that charges 1% each year takes a much more active role in re-balancing the portfolio every quarter. The 1% pays for research and analysis to optimize everything, so you should end up making it back and more in increased returns. The other firm says its not possible to time the market so in their view you don't get the 1% back in increased returns.

Average Client Size

One firm tells me that my assets are larger than the average assets at the other firms accounts. Their claim is that the other firm won't be able to meet my needs because they're not used to dealing with clients "like me." The other firm claims that my assets aren't large enough for the other firm. Their claim is that the other firm will de-prioritize me because I'm not an important part of their portfolio.

Confused yet? Me too. Like I said, it'll be back burner for the next couple of months, but, just thought I'd share.


Cheers!
mouse