DFA funds after firing advisor

[BryanMD]

Once you leave your financial advisor what happens with DFA funds that are advisor only?Can these be transferred in kind from a TD Ameritrade Institutional account to a retail account?

After letting my financial advisor know that I was going to take back control of my finances he told me I should find out if I’d need to sell all those DFA Funds and take a capital gains hit so I can transfer the money to my new retail account.

[afan]

As far as I know, for the DFA funds that are sold only through advisors, you can keep what you have but cannot buy more once you are no longer using an approved advisor.

DFA now offers some funds without an advisor.

There is nothing special about DFA. Those claims were all marketing. You can do just as well, at lower cost, with funds from Vanguard, Fidelity or Schwab. Or ETFs from many vendors.

[BryanMD]

Thanks. I was hoping that was the answer. Seemed wrong that I’d either have to liquidate with a LTCG hit or be stuck paying my advisor AUM forever on those funds.

[VagabondMD]

I know from personal experience that you can keep your existing funds and reinvest dividends but not add new money to them. Except that some (tax-advantaged) DFA funds have converted to ETFs, and many more ETFs are being created such that you can still invest in the most popular DFA strategies, if you want.

[VagabondMD]

As far as I know, for the DFA funds that are sold only through advisors, you can keep what you have but cannot buy more once you are no longer using an approved advisor.

DFA now offers some funds without an advisor.

There is nothing special about DFA. Those claims were all marketing. You can do just as well, at lower cost, with funds from Vanguard, Fidelity or Schwab. Or ETFs from many vendors.

I am going to disagree with the last sentence. Though it has not been effective over the last 10+ years, in the prior past, there was a distinct performance advantage with the DFA strategies over the plain vanilla Vanguard funds, and even the small-cap value funds were more heavily small cap and value than the Vanguard counterparts. Over the last 10 years or so, this small-value weighting has been a disadvantage, but hope springs eternal.

[Tortoise]

VagabondMD I'm new to WCI forum. Nice to meet you! I like the language you're speaking. I also have a positive impression of DFA and think of small-value as a longer term commitment based on listening to Paul Merriman Sound Investing and others including WCI (who has a small value tilt). I am under the impression that I should not judge the effectiveness of SCV in periods shorter than 20 years, as it has historically underperformed, even for decades, before shooting up. Interestingly, Paul's colleague Chris Pedersen at his non-profit put together some best-in-class ETF recommendations that seemed to rival DFA performance in 2021, according to Paul's recent podcast reviewing 2021. I believe Chris may choose funds whose SCV is smaller, exaggerating the benefit in a year that's good for SCV. Of course, Avantis seems to be a nice option, run by former DFA people. I see that M1 is offering DFA ETF but Paul is not yet recommending them for his M1 pies (waiting for a better indication of how they fare, as they're relatively new, I believe). At M1 I'm using Paul's Ultimate Buy & Hold (9-12 fund) strategy, as well as his all SCV/emerging markets for my kids, as a super long-term strategy. Low cost, easy to rebalance Paul's diversified UB&H portfolio at M1 but his 4-fund is obviously more simple, and international version back tested with slightly higher returns 1970-2020. References below.
https://paulmerriman.com/all-about-small-cap-value/
https://paulmerriman.com/best-in-cla...commendations/
https://paulmerriman.com/2021-invest...u-should-know/
https://paulmerriman.com/m1-finance/
https://paulmerriman.com/make-your-k...h-for-1-a-day/
https://www.whitecoatinvestor.com/sm...alue-strategy/