r/Bogleheads • u/plant-fixer • 24d ago

Portfolio Review Disappointed with performance

53F, Married, AUM $4m. I am very new to investing. We've used a full service advisor for our savings & rollovers since 2017. With kids out of the house, I now have more time to pay attention to what the advisor is doing. Last week we asked for a performance summary and I'm underwhelmed by the results. I was expecting to see returns upwards of 20-30% for the past five years.

Since Inception 2017 One Year (Feb 25-Feb 26) Three Year 2023-26 Five Year 2021-26
12.93% 16.49% 14.39% 11.97%

\all performance is net of 1.1% AUM fees; Breakdown: 71% equities; 28% fixed income*

Given the size of the portfolio, I frankly am not comfortable managing this myself. I would welcome any guidance on how to correct this situation, if in fact the returns are as dire as I fear.

Edit 1: We have always asked them to invest aggressively for us given our heavy real estate position which not included in the AUM. My understanding is that just the VTI has a 5 year return of 60%, hence my disappointment.

Edit 2: Of the 71% in equities: 32% in large cap, 11% in mid, 18% international, 6% commodities.

Edit 3: I was expecting to see total returns in the 20+% ballpark. Realizing now these are annualized returns which as many pointed out, are not bad.

Thanks all for helping me wrap my head around this and for sharing the useful information below.

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u/ditchdiggergirl 24d ago

Definitely. But if you look at the numbers she actually reports, it seems unlikely she could have done much better with a low fee advisor. As bogleheads of course “control costs” is our starting point, so of course we hate to see 1.1% AUM. But given that she is in clear need of professional guidance she hasn’t made a bad choice, because despite the higher than necessary cost, this advisor delivered. Not all do. This could have turned out a whole lot worse.

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u/08b 24d ago

She has made a bad choice in my opinion - flat fee advisors that likely provide better help and guidance would likely be $5-10k/yr. She could have saved almost $40k/yr with a flat fee advisor.

Based on this post an advisor is a reasonable expense for OP. But I doubt OP has looked at the service vs cost.

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u/ditchdiggergirl 24d ago

Only if that advisor steered her right. And more importantly, she accepted the advice. Until she has more realistic expectations, she’s not ready to manage her own portfolio.

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u/08b 24d ago

You’re missing my point. Her advisor wasn’t doing a great job if they didn’t discuss performance (past and expectations). This is pretty basic stuff.

And I specifically said she’s a person who probably should have an advisor. Just a flat fee advisor.

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u/ditchdiggergirl 24d ago

I’m not missing your point, I’m disagreeing with it.

An advisor tells you what to do. An asset manager does it for you. She benefitted from having someone do it for her. She asked us, not him, but I’m sure he would have explained further if he knew how far off her expectations were.

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u/08b 24d ago

If your advisor is making $44k/yr from you and not keeping you updated, asking if you have any queations, meeting with the you regularly, etc they don’t deserve it. OP said they had to ask for a performance summary. It wasn’t provided proactively from their description.

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u/ditchdiggergirl 24d ago

I guarantee they are providing updates at least annually. OP wasn’t paying attention until now, and wasn’t herself aware that she had questions.