Monday, March 03, 2008

Retire Early on DFA Advisors

The excellent Retire Early Home Page has a great analysis of various DFA advisors, their minimums, and their effect on your portfolio outcome. There's also a link on that page to a paper by Duke University Professor Ed Tower on the issue of DFA versus Vanguard. I came across that paper last year by asking Prof. Tower for it, and it was the primary study that convinced me that DFA funds had certain advantages that Vanguard did not have. (I did not post the paper at that time because it was in draft stage, but now it has apparently been published)

When it came to implementation, however, it turned out to be hard to get access to relatively cheap DFA advisers, despite William Bernstein's statement that I could do it if I asked around. When I started doing my research last year, I talked to one of them, Epiphany Investment. The result was as awful as you might imagine --- they constantly tried to up sell me to their percentage-based business, tried to tell me that I didn't know what I was doing, and came across as being so sleazy that I wanted to go take a shower after talking to them. I almost gave up on getting cheap access to DFA funds after that.

Then someone at work told me that he too, was fed up with his existing DFA advisor, Evanson Asset Management, and had switched to Cardiff Park Advisors and was happy. I shot them an e-mail explaining my needs and by the end of the year in 2007 I had an account, and now own substantial DFA funds. (I am mainly using them for access assets that Vanguard does not provide) I'm not, however using any of Cardiff Park's advise (I'm cheap profits to them, I guess), since I am mostly using DFA just to get a value tilt to my portfolio. People often ask me about financial advisers, but I find it tedious and boring to interview people for that job (especially given the number of sleaze balls in the industry), and so far no one has offered to compensate me for that task. I still firmly believe that by the time you learn enough to interview a financial adviser, you won't need one.

In any case, my research into DFA funds has yielded something I am relatively pleased with, and I intend to continue putting assets into them.
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