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Dec 18, 2009 7:23 pm

Everyone has them in their prospecting pipeline, everyone of them is always doing “great” and is has never had to worry about tax loss harvesting… EVER!!!

What are some of the things that you’ve seen inside of them?

I have DIY’ers who use Vanguard because they don’t like to pay a fee and some of the things I’ve seen are ridiculous. A 60yo female who’s not working has $300k in her account, day trades these ridiculous $2 stocks and has lost well over $250k. The recommendation of vanguard: sell everything, put half in a VG total stock mkt index and the other half in a bond fund index. "That’ll be $600 a year lady!"

maybe I’m missing the boat here but how much time could you be prospecting if that’s the advice you gave and said’ “Next, please.”

Dec 18, 2009 8:14 pm

You have to admit, sounds like pretty good advice for her. We have to charge five times what Vanguard does just to stay in business, so we have to find ways to add value. Not for her. Vanguard couldn't afford to work with her if she didn't call them.

Dec 18, 2009 9:27 pm

I told her we’ll never be able to beat them in cost, but to say, “put it in 2 funds and call it a day?” I asked what extra value they were bringing to the table and she realized, none other than paying $600/year for 2 funds. She’s unemployed, needs income and has no idea what she’s doing when it comes to investment and used to send me “newsletters” from these “analysts” that pumped certain $1.50 stocks after the last one only lost her 28% in each of the last 3 trades. At least she only had to worry about a $10 commission. I ended up getting the account but hope I’m not taking on a nightmare. I told her to stop chasing the newsletters for “tips” and please don’t send me anymore.

Really what I was asking was to hear some doozie’s from other people’s experience as to what they’ve seen in some DIY’ers accounts. After making a couple hundred cold calls, I could use a chuckle or two.

Dec 18, 2009 10:10 pm

Good for you. I like to slap DIYs around a bit, and then offer the bait or "get out". Of course I'm nice. I miss the narrative stuff of cold calling:

" Yeah, you're paying Vanguard six hundred bucks. You lost two fifty. Tell you what, keep the account with Vanguard and pay me two thousand to spend some time with you. We'll take that Vanguard account to a new level. First of all, these Vanguard kids, the one you talked to who will be gone is six months, aren't allowed to give you real advice".   What's gonna happen to interest rates with all of this printing and borrowing of money? I like BND, but I wouldn't be putting all of my money into it right now. Did they talk about TIPS (oh, that's right, does Vanguard have a TIPS ETF). What about short term taxable or tax exempt - what happens to bonds when interest rates go up? What are we going to do with the dividends - we could fund your long term care policy with that. I could put you on a conference call with John Hanc*** or Genworth to evaluate your policy and figure a strategy to fund that. Oh, you don't believe in that, that's cool. I was helping a lady this week who was thinking of dropping her policy. To replace it, the premium would be three times what it is now. A lot of people are making claims, and the insurance company is on the hook, she's going to keep the policy, wants to keep her dignity and options open - Congress is talking about giving fifty bucks a day to help you live in assisted care or be taken care of at home - 20% of asssisted living facilities may be going into the red if health care passes - what is your strategy? I'm just saying, those dividends aren't just money sitting in your account, consider taking a look, let's see how feel. You want to be in control and sleep at night. People say they feel better about their money after we talk and work together on a few things.   Oh, did they mention VDE? I like energy because I think no matter what happens, good or bad, the price of energy is going up. You know, some moron in the Middle East gets some nuclear material and every dairy in the world is closed down for six months - we need to hedge your downside and make sure those stocks are paying dividends, that's the only reason to buy a stock is for dividends, did they tell you that? Blah, blah. Two thousand bucks, don't want to pay that, just move the money.   A CPA who likes real estate parked four hundred k a year ago with me called me up the other day. Money is in cash. I was reading some anonymous year end reports to him, " lady your age, seventy, has one third in stocks right now and she's up twenty seven percent year to day. Okay, 2008 was bad. We beat the heck out of the S & P with less risk than all stocks. I'm not taking any credit, this won't happen next year. I'm saying, you're sitting in cash and complaining? I don't want to hear it. You and I don't see eye to eye on this stuff. You're going to just keep sitting on this money, and thinking about buying some real estate, or whatever, which you like, schlocking around with rentals, my father in law was schlocking around with rentals until he was eighty, and then he died. I like dividends, like the dividend of a nice house, because you can live in it and enjoy it, I like seeing money accumulate in the sweep account, you've been missing out on that. You're a CPA, you know a lot more than I do about this tax stuff, I could learn a lot from you, but I like to keep things simple, you could do a lot with tax planning on this stuff, you and I could really fly under the radar and feel good about this money.    He says, I'm coming to see you after the holidays.