Truth be told, the parting was mutual. After being split four ways, the remains of my late father-in-law's IRA were too small for this firm to want to keep under management. Meantime, from my perspective, paying their annual fee of 1.5% -- while modest compared with, say, the 100% that Bernie Madoff commanded -- would be like buying a small motorcycle every year and immediately destroying it, only less fun. So it was a case of you-can't-quit-you're-fired-you-can't-fire-me-I-quit.
Before getting to that point, the firm made a halfhearted attempt to explain to my wife the value they add, and she made a halfhearted attempt to explain it to me. There wasn't much to say. To justify the 1.5% fee they would need to prove they earned clients 1.5-plus-n% more than clients could earn themselves, and they couldn't.
Because this was a retirement account we did view the firm's four-page, single-spaced analysis of projected income and expenses in retirement. This proposal established beyond doubt that whoever wrote it had passed Algebra 1 and been legitimately promoted to Algebra 2. But it relied on two variables that were pure, laughable guesswork: how long you intended to live and how much you intended your investments to earn.
To gullible widows and orphans (and this money was now literally widow and orphan money) it may seem possible to balance the levers of longevity and return to produce a desired result. But it's an absurd notion. If we could have instructed someone to select lower-yielding stocks and thereby extend my father-in-law's life, don't you think we would have?
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