'He doesn't seem to be protecting me from market downturns'

"He doesn't seem to be protecting me from market downturns, and his response when questioned is always that the markets will eventually go back up." (Photo subjects are models.)

Dear Dollar Signs,

I have been using a wealth manager for over a decade. He seems to be putting my money into index funds that I could buy myself, while charging me 1.2% a year based on the value of my account. He doesn't seem to be protecting me from market downturns, and his response when questioned is always that the markets will eventually go back up.

My current 401(k) seems to be outperforming him. Under the circumstances, is he providing any value to me, or am I just giving away 1.2% of my retirement savings to him? He does not provide any other services.

However, he reports his investment performance using different metrics than those used by my Fidelity 401(k) account, so I can't make an apples-to-apples comparison to determine whether he is actually doing better or worse than my 401(k).

The personal rate of return that Fidelity uses on the 401(k) statements is based on a time-weighted formula, according to the disclosures on the statement. The rate of return he uses is dollar-weighted, which takes into account cash flows, dividends, etc.

I'm just curious whether I'm getting any added value from using this wealth manager, or if I'm paying him several thousand dollars a year to do something I could do myself.

Feeling Suspicious