Managed Portfolios. Investors Ask Natalie Pace.

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Managed Portfolios. Investors Ask Natalie Pace.
Dear Natalie.
___ Investments has been reaching out to me.  I've had a conversation with them. I think they mostly invest in stocks. I'm leaning towards thinking that they are not for me but wanted to get your thoughts.  Thank you! 
Signed, Doing my Due Diligence!
Dear DD (smart move), 
 
All brokerages (and insurance companies, fund companies, banks, crypto exchanges, etc.) want to get bigger. They want to have hundreds of billions of assets under management and be considered a major player. The person who is reaching out to us to gain our business is a salesperson who might earn a fat commission if they bring us in. This is the first thing that we must always keep in mind, especially when they act like they are inviting us into some exclusive, private club. “Now that you are worth a million dollars, you qualify to have us manage your money!” (Standard sales line…) Sometimes they might say that you’re on the low end of their threshold, that they’re making an exception to even consider taking you at all, and that the only way they can do that is if you contribute monthly at XYZ level. Sound familiar?
 
So, how do you know if the opportunity is truly right for you? Is the managed plan as great as the salesman makes it sound?
 
Below are a few considerations before making your choice.
 
Performance vs. S&P 500 for the Past Six Years (Pandemic) and Since 2007 (Great Recession)
 
Interview With the Questions Outlined in the “Brokers are Salesmen” Chapter in Put Your Money Where Your Heart Is (2nd edition)
 
Who Makes the Decisions? Are You Informed in Advance?
 
There Are a Lot of Cautionary Tales
 
And here is more color on each topic. 
 
Performance vs. S&P 500 for the Past Six Years (Pandemic) and Since 2007 (Great Recession)
Managed plans are going to take a percentage or a fee. So, they should be performing above what an index fund would do to make it worth your money. Therefore, it is important for you to understand what their track record is, which is quite easy to do. Simply ask for a performance of their portfolio compared to the S&P 500. You are going to need two different time periods. One chart should cover six years (or start in 2019). Five of the last six years were spectacular bull markets, while one was a pretty steep bear market. The 2-year average of the S&P500 in 2023 and 2024 was about 51%. In 2022, the index dropped -19.44%.

How did the managed plan do over that 6-year period? Did it just perform with the S&P 500? Does the chart factor in fees? You must read the fine print to know. Read it, don’t just take someone’s word for it. I’ve seen far too many cases when a client was told one thing, and a very different story (the truth) was printed on their statement.
 
You’ll also see the March 23, 2020, pandemic low, when the S&P500 dropped almost -38% in one month – between Feb. 19 and March 23, 2020. (If you are reading this after 2025, then you’ll need a longer timeframe to see the pandemic.) Many managed plans shadow the markets, but perform 2% below, due to the fees. In that case, you’re paying to underperform.
 
We also want to look at the performance since 2007, so that we see how the portfolio did in the Great Recession. Again, if you’re just riding the Wall Street rollercoaster and performing at par, it’s better to avoid the 2% annual fees and the stock plunges, particularly as we get closer to retirement. If their portfolio follows the index, it might not be age-appropriate or properly diversified, putting our wealth too much at risk in recessions. While no recession is predicted for 2025 or 2026, economists are terrible at forecasting them. When we wait for the headline that we’re in one, it’s too late. If you’re concerned about the economy, overweight a little more safe.
 
Sometimes overperforming statistics are a red flag, too, particularly in today’s world of AI, where it is quite easy to mockup a fake return. Sadly, outstanding returns can be a red flag for fraud… Have you done a BrokerCheck on the person who contacted you? Have you searched for information on the company online using the terms “scam,” “complaints” and “fraud?” When I did a search using the word “complaint,” I saw quite a lot of troubling reports on the company you inquired about. It’s important to remember just how much money is lost to fraud each year. (Check out my blog and take the SEC’s Fraud IQ test.) Lesser reported are the complaints that are not at the level of fraud but are troubling examples of people receiving a different outcome than they were promised.  
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Most of us can self-direct easily and affordably, using our easy-pie-chart system with 1-3 times a year rebalancing. This is a time-proven 21st Century strategy that earned gains in the Dot Com and Great Recessions and outperformed the bull markets in between. Few managed plans can boast of this… You can read about it in The ABCs of Money 6th edition, you can learn and implement these strategies at our April 25-27, 2025 Online Financial Freedom Retreat. You can also receive an unbiased 2nd opinion from me personally through our private coaching. Email [email protected] or call 310-430-2397 to learn more now.
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Interview With the Questions Outlined in the “Brokers are Salesmen” Chapter in Put Your Money Where Your Heart Is (2nd edition)
 
I have a chapter entitled, “Brokers are Salesmen Not Surgeons” in Put Your Money Where Your Heart Is (2nd edition). It’s important for us to interview our financial advisors as if our life depends upon it because our future and our lifestyle does. The questions that are outlined in that chapter are designed to help you with that process. I provide suggested answers that will help you to discover just how well-designed (or not) their portfolio might be. Also, you’ll start learning how to separate sales pitches from a true strategic personalized plan. Remember that a good salesman will use all of the tricks of the trade to make the sale. Their mantra is ABC – Always Be Closing.
 
Who Makes the Decisions? Are You Informed in Advance?
 
A lot of managed plans hand the control over to the broker-salesman (and their brokerage). Sometimes, the plans don’t even allow you to see how things are invested. Bernie Madoff was notorious for that, and almost every hedge fund has a lockup period and terms that might make it difficult to regain control of your money in a timely manner. But there are also many private credit and equity funds that have a similar policy. These can be part of your managed plan – even if you are receiving statements with a list of your holdings.  
 
To make matters even more complicated, some opportunities become illiquid when you purchase them making it difficult to get your money back without losses (or before an extended period). This can be hard to deduce before signing with the firm because (and I’ve seen this on too many occasions) you sign with the brokerage and then they put you in a series of investments, some of which can lose money and/or become illiquid the moment you purchase them – all under the guise of “earning income.” Sometimes when clients question the strategy, they are placated with the amount of income that they are earning, without being advised that they lost on the principal, and there is a question mark about when they will be able to access their money again. All told, when the losses are factored in, the income can be half of what we’d earn in a short-term Treasury Bill. Be sure to read my blogs on “Paper Losses” and “Why So Many Safe Investments are Losing Money.” The links are directly below.
 
There Are a Lot of Cautionary Tales
Here are just a few – beyond the headlines of the ones you already know.
Paper Losses
https://www.nataliepace.com/blog/paper-losses#/
Why So Many Safe Investments Are Losing Money
https://www.nataliepace.com/blog/why-are-so-many-safe-investments-losing-money#/
They Trusted Him. Now He Doesn’t Return Phone Calls.
https://www.nataliepace.com/blog/they-trusted-him-now-he-doesnt-return-calls#/
 
Bottom Line
In short, it’s important that we are the boss of our money and that we conduct the same level of due diligence for the managed plan that we would if we were hiring a CFO for our billion-dollar business. A lot of folks have their ego stoked for finally “qualifying” for a managed plan. This puts us in a position of proving ourselves worthy of the brokerage, when it should be the other way around. (It’s our money!) I’m not seeing many compelling reasons to go with a managed plan these days, particularly since an age-appropriate, diversified strategy is so easy and effective. Sadly, I’m seeing far too many cases of people regretting the choices and terms that they are being sold into – and this is in a bull market! Imagine what happens if the economy and liquidity become tight.


Join us at our online Spring Financial Freedom Retreat April 25-27, 2025 (online) and our Stock Masterclass (learn the strategies that earned me the ranking of #1 stock picker) on May 3, 2025. If you'd like a life-changing adventure of a lifetime, be our guest at a royal manor house in Cornwall, England, March 7-14, 2025. Only one room is available (due to a last-minute cancellation at this sold out retreat). Call 310-430-2397 or email [email protected] to learn more. 

Your friends and family can get the best price for the April 25-27, 2025 Retreat when they register together. Request testimonials at [email protected]. You can also view some on the flyer page of the retreat. 

Learn how to:

* Invest in hot industries, such as Nvidia, artificial intelligence, and quantum computing,
* Hedge against a weaker dollar,
* Invest and compound your gains,
* Green your retirement plan,
* Easy and efficacious nest egg strategies,
* Get hot and diversified (including in artificial intelligence, quantum computing and crypto),
* Evaluate stocks,
* Avoid capital gains and financial predators,
* Keep an age-appropriate amount safe, and,
* Know what's safe in a Debt World.

You'll even discover how to save thousands annually with smarter big-ticket choices. Yes, it's a complete money makeover. 
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Email [email protected] or call 310-430-2397 to learn more and register. Learn the 15+ things you'll master and read testimonials in the flyer on the home page at NataliePace.com. Register with friends and family to receive the best price. ​

"Ten minutes into the first day I was already much smarter about investing than I ever thought I would be in my life and I knew I was in exactly the right place at this retreat. I am amazed at how EASY and FUN it is to make my money work for me and those I love. I think this kind of information should be compulsory in schools. I wish I'd learned this sooner." CM

If you’d like an unbiased 2nd opinion on your current wealth plan, email [email protected] for pricing and information.

Join us for our Online Spring Financial Freedom Retreat April 25-27, 2025. Email [email protected] or call 310-430-2397 to learn more. Register with friends and family to receive the best price. Click for testimonials, pricing, hours & details.

Join us for our Restormel Royal Immersive Adventure Retreat. March 2027. Email [email protected] to learn more. Click for testimonials, pricing, hours & details. Register now to receive the best price, the best room and six private, prosperity coaching sessions (value $2,400). There are only 9 rooms available. This retreat includes an all-access pass to all of our online training for a full year for two. Considering the perks, it is much more affordable than you might think. Email [email protected] to learn more. 2025 was sold out in 2024! Yes, it's a great idea to register and start learning the life math that we all should have received in high school now.

Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money (6th edition) and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is (2nd edition) are the most recent releases of these books. Follow her on Instagram. 
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Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.​​

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Check out Natalie Pace's Substack podcast on Apple and Spotify.
Watch videoconferences and webinars on Youtube.

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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly-traded companies, funds or projects mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect an age-appropriate, diversified wealth plan, which has been designed strategically, with the assistance of financial professionals who are familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge, patience and diversified strategy.  
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Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.