The Haphazard Blog

Yesterday, I received a call from E*TRADE’s concierge service about some cash in my Roth IRA. She was seeing if I needed any help with investing it. There were a lot of odd moments. For many of the questions I asked her, she said she couldn’t give me an answer because she wasn’t allowed to give financial advice. But most of the questions were about what products do you have that meet this criteria. I wasn’t asking where I should invest, just what options they had. To make it weirder, she started to tell me about E*TRADE’s active money management. I don’t see the difference between her telling me all about that and telling me about other products.

I pointed out to her the only reason I had the cash in my account was because E*TRADE closed their S&P 500 index fund, but I’d be willing to look over some materials on the past performance of the actively managed accounts. On the surface, it seems pretty simple to determine if it’s worth it. They will charge a 0.75% annual fee to manage your assets (If they manage $10,000, they will take $75 no matter what happens) plus the fees from all the funds they choose to invest those assets. Are they any better than an index fund? My other question is, if you couldn’t manage a S&P 500 index fund, how can I trust you to actively manage anything more complex. Anyone can manage a S&P 500 index fund, and somehow E*TRADE couldn’t. I really look forward to the answer to this question.