The short answer to the latter question is yes, not only would one of them produce that strategy, but about 7% would.  IF, they had the discipline to stick with a properly-devised strategy AND IF the investor did so as well AND (and here’s the critical part….drum roll, please…) IF THEY DIDN’T CHARGE EXORBITANT FEES.  ‘Exorbitant’ and “properly-devised” being  normative terms, I define them loosely as follows  An “exorbitant fee’ is a charge far in excess to the service for which it is charged.  I submit to you that 1-2% to essentially replicate, and often under-perform, the market return is ‘exorbitant’.  A “properly-devised’ strategy accurately allocates the client’s portfolio between equity positions and bond positions based upon their risk tolerance and investment time horizon, although other factors may be included.  This is all well-trod turf for an investor of any experience, of course.

It is the rare investor who truly meets the first two criteria;  Brokers have a tremendous urge to ‘tinker’ with your account, not out of financial interest (they’re getting their wrap fee either way*), but mostly because they want to show you that they’re being active.  Trying to help you ‘reach your financial goals’ or whatever other nonsensical phrase they trot out this month.  All on beautiful, expensive stationery, signed off by nine levels of (highly-paid) Compliance Officers, Branch Managers, Regional Planning Directors, Technical Strategists, Quant Specialists, poets, priests and politicians stretching a line from wherever you are directly to their 75-story office tower(s) in mid-town Manhattan.  Hey, we’re the best, and we have the glossy brochures to prove it!  Still don’t believe us?  Look how much we’re charging you.

*Wrap fees are a percentage assessed based on your account value.  They are generally 1.5-2%, though 1% is not unheard of.  This discount to 1% is usually given to friends, family, or as an enticement to sign-up or to a shrewd-bargaining investor.  READ ON