Should I use an investment firm?

Orogogus

A few weeks ago one of my coworkers won a complimentary lunch from a business card drawing from Ameriprise, which I gather is a full-service investment firm, and he invited me and several coworkers along. The deal was that we listen to the spiel, sign up for free consultation if we want, and they'd pay for lunch.

So I signed up for the consultation and talked to the rep for a while yesterday. Naturally, the rep wants to steer me into letting Ameriprise handle my investments for me -- she said they'd have to move my current holdings from Waterhouse (my current brokerage company) to them, and they'd be able to shift them around to produce a better return.

I looked up the company on Wikipedia, and it seems like Ameriprise isn't a company I want to get hooked up with (Third party ranking of investment firms). But is a firm like this something I should investigate? I currently have the majority of my portfolio in US small cap (esp. tech-related) mutual funds, on the basis that these are supposed to present the greatest long term profit. But I don't know anything about international investing, EFTs or anything fancy. After speaking with the representative, it occurs to me that I really should, or else I should let someone take care of it for me.

I have a Roth IRA and a 410(k), so the tax advantages are set. I'm just concerned about my investment allocation. Quicken tells me that I've been getting an annual return of about 10% over the last 5 years, but the rep was suggesting that I could be doing much better.

So what I'm wondering is, is it relatively easy to teach myself to do better, or should I consider hiring someone to do it for me? What's the cut-off point at which I should seriously consider letting a third party take care of my money instead of dicking around with it myself?

MichaelLC

So what you're saying is osmeone who bought you lunch says by giving them money, they can make you money?

It sounds like you've got things organized now, as you know about small/large caps, etc., and 10% seems great to me.

My advice would be to read up on your own, and forget the investment firm.

Thanatos

Unless you're wealthy, 10% over 5 years is awesome, and Waterhouse is a quality company.

People will tell you you can get better, and you can, it's just not likely.

Filler Inc.

I have a morgan stanley account and it's doing pretty good. It was a pretty big sum so that was expected, but the guy I have working with me is experienced and knows what he's doing. He explains all my options when reccommending new investments and made me feel at ease. If you're gonna be doing something like this, I'd suggest going with a much more reputible company if it's within your means.

I know jack shit about money and investment, but knowing that I have a guy who's been in the business 27 years puts my mind at ease.

MichaelLC

Filler wrote: »

I know jack shit about money and investment, but knowing that I have a guy who's been in the business 27 years puts my mind at ease.

George W. Bush's Resume (Joke article).

Sorry, had to. :P

Actually related to the OT, MSN Money had a good article about being careful about basing past-performace when chosing a fund manager, as they may retire, get bored, move to a different compnay, etc.

Malkor

I'm pretty sure most people from Ameriprise are just salesmen. If you really grill them about their strategies and such they break down, at least in my experience, because they're middlemen pretty much there to get money for American Express to do the real investing. They offer a product, which is the management of your money by other people.

Shazkar Shadowstorm

I have a joint account with my dad's one at Fidelity, they're nice and were helpful.... though I lost a shit ton of money just now because every stock ever just went kaboom.

EggyToast

I wouldn't do it. They're going to charge you fees in order to move stuff around and it'll wipe out any potential advantage you may see. Unless you had NO financial advisor now but had a large sum of money sitting around, generally seeing an advisor or having a personal one ends up being a waste of money. They're useful to get things set up, but until you have a need for a specific thing (diversification, setting up new accounts, moving funds around), they're not going to do you any real service.