IS 1.5 % annual fee for an investor account SMith Barney too costly?

I am torn between investing myself and keeping expenses low, or handing my investments to a professional. I have investment experience and I am an avid reader of Motley fool and Morningstar, etc.

The initial investment will be around 100- 200k.

Do you believe your advisor can beat your picks by 1.5% per year?

Put another way, if you average 10% per year with index funds, do you think your advisor will do better than 11.5%? Is he THAT MUCH better than your are? He has to be just to break even with his fees.

Then, I'm sure Smith Barney charges higher transaction fees than your internet broker, so factor that in too.

1.5% is a lot in long-term investment terms. They probably can't make up the difference. They might get you 0.5%, but they won't get you 1.5%.

If they can't, they aren't worth the money, and all the independent research indicates that they can't beat the market consistently.

This is not to say advisers NEVER create value. Frequently, they do. For example, if you were not an avid independent investor and were investing in 5%APR CDs for retirement, the adviser could beat 6.5% easily and be worth their keep.

Advisers also may provide additional services like goal-setting advice, insurance analysis, lifetime financial planning and setting realistic expectations. These services have value in that they are nice to have. However, they won't increase your return at all.

-->Adam

If it is a sock broking a/c with advice, or wealth management, 1.5% is ok.

If it is execution only, it is too much

Also find out what other charges they have, inactivity fees, penalties etc.and interest on cash balances.

If you enjoy making the deals yourself, and looking back with pride at your successes, go for cheap execution only. If you are only after profits, they will probably do a little better than you.

Yes (if they make only 6.5% or less for you)
No (If they make 20% or more for you)

No, that's pretty good, considering some are over 3% and beyond. Maybe you can look into some that have less than 1%.

Yes too high. Try 3/4 to 1% on them.

Or drop them and go to Mutual Funds -no loads and pay 0. (except of course for expenses).