Q: I like my broker, but she and I differ on what type of funds to be in. I prefer low-expense funds. She says: Forget expenses if the 10-year...

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Q: I like my broker, but she and I differ on what type of funds to be in. I prefer low-expense funds. She says: Forget expenses if the 10-year returns bear more fruit.

I have $400,000 to invest. I want to do the following: 35 percent in Vanguard Total Stock Market Index, 20 percent in Vanguard Total International Stock Index, 20 percent in T. Rowe Price New Horizons and 15 percent in Vanguard Value Index.

All are low-expense funds. She wants me in Hancock Large Cap Equity C, Goldman Sachs BRIC C, Blackrock U.S. Opportunities Inv. C, Fidelity Advisor Canada C and Fidelity Advisor Small Cap C. All are high-expense funds.

A: Have you ever heard the old expression “to a hammer, everything is a nail”? Well, that’s what is happening here. Your broker needs to make a living. Her income comes from adviser fees on those “C” share funds. Her world is defined by the funds she can make a living selling.

This isn’t evil. But it sure blunts her sensitivity to statistical reality.

These fees have to be added to the basic expense ratio of the funds she recommends. Those C shares include a large 12b-1 fee (0.75 percent to 1 percent). That’s why every single one of the funds she suggests costs more than 2 percent a year. That’s 10 times as much as the cost of most of the funds you want to buy.

She can’t make a living at her current firm by putting you into low-cost index funds.

I’ve heard brokers say that “expenses don’t matter if the return is there” for more than 40 years.

It’s absolutely true, except for one problem. Expenses are constant. Performance is uncertain. Long-term, odds are that managed fund performance will be well below the performance of an index fund.

It helps to understand the math and probability behind this. Historically, about 70 percent of all managers fail to beat their appointed index. So when you pick managers — or pay someone to pick them for you — you have only a 30 percent chance of beating an index fund.

Those aren’t very good odds, particularly when the additional expense is considered.

My suggestion: You’re already doing the right thing on your own. Keep doing it.

If you want to gamble on your broker, sell some of your individual stocks and let her suggest a small portfolio of funds.

Then track it against your portfolio of index funds. Just remember you are betting on a long shot and that the odds are better than 5-to-1 against her. Personally, I don’t think it’s a good idea to bet your retirement on a long shot.

Questions: scott@scottburns.com