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  • DFA Funds

    Hi Everyone,
    My husband and I are a two doc couple who have invested with a particular financial advisor because they deal primarily in DFA funds. We have now amassed a portfolio there valued at over $1.3 mil, but even with low AUM fees of 42 basis points, this amounts to about $6k+ annually. This company uses TD Ameritrade Instititutional, so all our $1.3 mil is actually with TDA. I was thinking about switching to an advisor with fixed fees. They stated that with our complexity, we would be about $2500-$3000 annually.
    Then I read the WCI blog post today, telling me to be confident! And that is making me think that I possibly don't need anyone at all, except for occasional advice.
    However, my problem is that most of my money with our advisor is in DFA funds, and thus I would need an advisor who is authorized to deal with DFA funds to help me manage these funds, right? If I were to drop my current advisor and start managing this $ myself, I would have to liquidate all the DFA $ pretty much all at once, subjecting us to a ton of capital gains tax. Is this correct?
    If correct, what would you suggest? I was thinking I would switch to a fixed fee advisor who deals with DFA funds and gradually move out of DFA funds over the next few years. Then I could eventually just start managing my own $ if I wanted.
    Any thoughts and suggestions?
    Thanks!

  • #2
    I think you can just keep them.

    And if you can't, no one actually needs DFA funds. I would bet you are in the minority actually on this site.

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    • #3

      No, I left my advisor who used DFA funds for my portfolios and kept the funds. I cannot add to them, but I countinue to hold them.

      Comment


      • #4
        Both $2500 and $6K are within the range of "fair" for the services of an advisor. It doesn't sound like you're being ripped off. So if you want the advisor, go ahead and use them without guilt. If you don't want the advisor and would rather do it yourself and save the $2500-6000 a year, that's fine too.

        I generally argue that DFA funds aren't worth 1% a year. But the closer that number gets to 0%, the harder that argument becomes. 0.42%? Maybe. Certainly over the long term in the past some of their funds have done that well over the respective Vanguard fund. Tough decisions. But at least you're choosing between good enough and perhaps better rather than bad and good. Nothing here worth losing sleep over.
        Helping those who wear the white coat get a fair shake on Wall Street since 2011

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        • #5
          Reminder to others you can get advisor free DFA through the Utah 529.

          Comment


          • #6



            Hi Everyone,
            My husband and I are a two doc couple who have invested with a particular financial advisor because they deal primarily in DFA funds. We have now amassed a portfolio there valued at over $1.3 mil, but even with low AUM fees of 42 basis points, this amounts to about $6k+ annually. This company uses TD Ameritrade Instititutional, so all our $1.3 mil is actually with TDA. I was thinking about switching to an advisor with fixed fees. They stated that with our complexity, we would be about $2500-$3000 annually.
            Then I read the WCI blog post today, telling me to be confident! And that is making me think that I possibly don’t need anyone at all, except for occasional advice.
            However, my problem is that most of my money with our advisor is in DFA funds, and thus I would need an advisor who is authorized to deal with DFA funds to help me manage these funds, right? If I were to drop my current advisor and start managing this $ myself, I would have to liquidate all the DFA $ pretty much all at once, subjecting us to a ton of capital gains tax. Is this correct?
            If correct, what would you suggest? I was thinking I would switch to a fixed fee advisor who deals with DFA funds and gradually move out of DFA funds over the next few years. Then I could eventually just start managing my own $ if I wanted.
            Any thoughts and suggestions?
            Thanks!


            Click to expand...



            You do not have to liquidate your DFA funds.  You may hold to them as long as you like.  In fact, you can have dividends reinvested as well.

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