Q: Our financial adviser, with First Command financial planning, is suggesting we move all of our current investments to its version of the wrap account, Select Investor Profile.

We are investing $500 a month in Pioneer Midcap Value Fund A (value: $275,850), $400 a month in Pioneer Value Fund A (value: $327,800), and $700 a month in Templeton Growth Fund Class A (value: $321,500). We also have regular and Roth IRAs with Pioneer Growth Fund A valued at $187,885.

We are retired with pensions totaling about $60,000 per year. Our capital gains last year were about $60,000, and interest income was around $20,000. My concern is the management fees of 1 percent on its Select Investor accounts. Does this make sense? -- N.S., San Antonio

A: Your adviser will be increasing his income nicely. So if your primary concern is your adviser's welfare, this is a really good idea.

But if your concern is your investments and your retirement, then you should consider alternatives. With $1.1 million in financial assets, you have lots of choices.

Let me explain.

Unless there is a major change in the quality of advice, what you are being offered is an opportunity to pay more money for a poorly constructed portfolio in which three out of four fund choices are bottom 50 percent performers. Your adviser, on the other hand, will be increasing his income from the 0.25 percent 12b(1) marketing and distribution fee on each of your current funds to his 1 percent wrap fee, an increase of 400 percent.

What your adviser provided in the past was an opportunity to pay commissions. There is no sin in this. Financial sales people should be compensated for their effort.

The difference between a person who merely sells and a real financial adviser, however, is that a financial adviser actually helps you do two things.

First, make good investments.

Second, build an appropriately diversified portfolio with those investments.

Others may differ, but I would give your adviser an F on the first count and a C-minus on the second.

Let me tell you why.

The three Pioneer funds have consistently ranked in the bottom 50 percent of their peer groups for performance. Morningstar gives them a rank of two stars (below average). About 71 percent of your money is committed to these subpar funds.

Only the Templeton Growth fund has provided performance in the top 50 percent of its peers. It has a Morningstar rating of four stars (above average).

Here are the facts on appropriate diversification: The good news is that you have equity diversification -- domestic large-cap growth, large-cap value and small-cap value plus international equity.

The bad news is that you are 100 percent invested in equities. There is no allocation to cash, fixed-income or REITs. Not a dime. Greater diversification would reduce risk of loss. It could also produce the same, or better, return with less risk.

I am not just shooting from the hip here.

The annualized 10-year return on your portfolio is about 8 percent, and the funds have 10-year standard deviations (according to Morningstar) ranging from 14.9 percent to 17.57 percent. Standard deviation is a statistical measure of the volatility of returns. In this case, your portfolio earns about 8 percent plus or minus about 16 percent, most of the time.

Vanguard Star fund, a low-cost asset-allocation fund, earned 9.3 percent annually over the same time period. It did this with a standard deviation of 9.4 percent. It got a better return with nearly half the risk.

According to its Web site, First Command uses funds from AIM, Allianz, Fidelity, Franklin Templeton, Pioneer and Western Reserve Life. If the current funds are wrapped, your total expenses will exceed 2 percent a year.

That's never a good sign.

If the current funds are replaced with new funds, your expenses will still likely exceed 2 percent a year. With some luck (or a new adviser), you might get better funds than you now have. But I wouldn't count on it.

What are your alternatives?

You have many. Here are a few:

Visit USAA. Like First Command, it has a long history of service to the military, but at relatively low cost. Many asset management firms will manage a $1 million account for a total expense of 1 percent or less. You could also invest your money in a low-cost asset-allocation fund such as Vanguard Star or Fidelity Four in One Index.