Donna Shaw Photo by Jered Haag
Donna Shaw

My Life As A Client: Think Twice Before Doing It Yourself

What do your accounts really think about you? This time, we talked to Donna Shaw, a 69-year-old retired former executive in East Hartford, CT, about her experiences.

I retired 10 years ago, but before that I worked for several multinationals as director of contracts in different divisions, and I handled my investments myself for decades. But doing it on my own was time-consuming.

In 2001, I came into an inheritance. I had more cash and decided I didn’t want to be fooling around on my own.

I interviewed several financial advisors whom I really liked, but as soon as they told me they made trades and then let you know about it afterward, I said, “I don’t think so.” I want an explanation of why you want to get into this investment now. I’m sorry; it’s my money.

I would sit down with the advisor I ultimately chose four times a year for a couple of hours and we would go over the portfolio, the returns, what he was considering and why. He was older than me, had been doing this for a long time and I felt comfortable with him.

Over time, we did ok. There were those terrible years, 2007-2008, when I lost somewhere in the mid-20’s in my portfolio. That’s a lot of money to lose when you’re paying someone an assets under management fee. I started thinking that this guy should have been familiar enough with the financial markets to see what was coming. And it got me in the frame of mind: I could have lost this much money by myself.

Gradually, I just came to think the fees were too high. Everything was fine when I was making a lot of money. But the market was variable. And I thought, “What am I getting for my money?“

In 2012, I decided it was time to make a change. Sometimes service professionals don’t really know what made a client leave. But I talked to the advisor, and he wished me luck.

The advisor used Schwab, and I contacted the local office with the intention of getting rid of all the managed accounts and using index funds and ETFs. But the manager I spoke to asked me: “Do you have any idea what the tax implications are going to be if you do this?” We ran some numbers, and I decided to get into something called Private Client. 

Since then, we’ve transitioned a great deal of money to get out of the managed funds, always looking at the growth, tax and lifestyle implications. Because I’m retired, I need to take money out for living expenses. I have a non-IRA account, a traditional IRA and a Roth IRA.

I speak with them about four times a year. The individual who manages my account is excellent and is located here. The portfolio manager and the rest are in Florida. That isn’t a problem; I can call them any time. We go over how the markets are doing and how my accounts are doing. Their office isn’t far from where I live, and I’ve been there a couple of times. But we do a lot over the phone, so I don’t have to deal with the traffic. That’s been my choice. About a week before we meet, they send me the financial plan with where my portfolio stands at that point in time and their recommendations, so I can review it, do research and have my questions prepared.

It’s still not cheap. I have friends who think I’m crazy. But you reach a point when you think maybe it’s not the smartest decision to do it yourself. Plus they’re very straightforward about the costs, and I don’t get charged for trades. Also, there are other services they provide that I wasn’t getting before. I can go to their web site and find so much information and analysis. And their materials tend to be more sophisticated and detailed. They have all these tools I wouldn’t have access to on my own.

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