Does anyone here with net worths north of $1 mil use financial advisors?

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Money Market
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Does anyone here with net worths north of $1 mil use financial advisors?

Post by Money Market » Fri Oct 20, 2017 4:56 pm

According to this guy on reddit (he's in the industry and is pretty vocal there), he claims that for a guy with $1.5 mil of assets, he needs an fiduciary FA for tax-efficient investing.

https://www.reddit.com/r/investing/comm ... t/dongtig/

My thought is if I had a two or three-fund portfolio, wouldn't it be as simple as investing in TSM, ITSM (international), muni's in taxable, and other bonds/stocks/reits in tax-deferred? Obviously, this may change according to someone's marginal tax rates, but I'm just surveying around if you guys are inclined to have an FA help you for tax-efficient allocations. I'm of the opinion that I don't really need one based on my future tax rates since it would be as simple as putting muni's in my taxable.

Edit: Sorry, I should have mentioned, a fee-only, fiduciary financial advisor.
Last edited by Money Market on Fri Oct 20, 2017 6:56 pm, edited 1 time in total.

smitcat
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by smitcat » Fri Oct 20, 2017 4:58 pm

We did in the past but it was costing us a lot of money for middle of the road advice.
So .... currently and for the future no.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by mrc » Fri Oct 20, 2017 5:01 pm

Nope. As they say often on this site: Once you learn enough to choose a good FA, you really don't need one. Applies to most folks.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by TimDex » Fri Oct 20, 2017 5:10 pm

An FA is pointless. Or rather, the point of an FA is not to make money for you, but for himself and his firm. I can only echo the advice above, once you know enough to realize the advice you're being given is bogus, you know enough to manage your own money. It really ain't hard and the same principles apply to $1 million as to $10,000. Tim
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by Grt2bOutdoors » Fri Oct 20, 2017 5:16 pm

You mean like the FA who wanted to put me in a tax efficient variable annuity to shelter the money that was already sheltered in my 401k plan? :oops:
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by Sandtrap » Fri Oct 20, 2017 5:19 pm

The only difference to a FA . . and broker. . . and brokerage rep. . . between a small, medium, and substantial net worth is the amount of "drooling" and the size of the bib. I have at times been in a room full of helpful professionals and felt like the lobster, or was it the lobster picture on the bibs? :shock:

However, I have played golf with and befriended many a businessman that were better off paying the AUM, or fee only fee for their financial advisors. Not everyone has the sense or constitution, or interest, in doing it themselves. In fact, at times, it can be a significant bragging ritual when comparing "my financial advisor" (as if someone is wealthy enough not to have to bother with the dirty business of handling finances).

This has been my experience, though I've never had a FA.

I wonder if there are any Bogleheads that have or would admit to having an AUM FA. . . or Fee Only. . . ?
Last edited by Sandtrap on Fri Oct 20, 2017 9:24 pm, edited 1 time in total.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by RadAudit » Fri Oct 20, 2017 5:21 pm

My FA is Bogleheads.org, the books, the wiki ... Their charge for AUM seems reasonable.

Many thanks to all.
Last edited by RadAudit on Fri Oct 20, 2017 5:24 pm, edited 1 time in total.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by avalpert » Fri Oct 20, 2017 5:23 pm

Nope, he's wrong - you don't need a financial advisor or any special games to invest those asset tax efficiently. His last sentence is absurdly wrong - the only way the world gets more complicated is that you have more vultures trying to get a piece of the action.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by radiowave » Fri Oct 20, 2017 5:25 pm

RadAudit wrote:
Fri Oct 20, 2017 5:21 pm
My FA is Bogleheads.org, the books, the wiki ... Their charge for AUM seems reasonable.

Many thanks to all.
+1 :)
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by 123 » Fri Oct 20, 2017 5:26 pm

I have grown extraordinary wary of anyone who even comes close to being a salesman, like an FA. I'm just not comfortable with someone else even trying to put their hands in my pockets.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by NotWhoYouThink » Fri Oct 20, 2017 5:40 pm

When we moved an inherited IRA away from WF, the "advisor" snarled at me: "You think you know how this works, don't you?"
Yeah, I kinda do.

It's not that hard. Actually, when we were both at Megacorp, most of our money was in the company 401 and 457 plans, there wasn't much for an advisor to do. Now that I'm retired and more than half of the money is away from those plans, bogleheads and the wiki are more than good enough.

But people like having a "guy." In good times or bad, they like to trade notes on what their "guy" recommended. It is a status thing, like having the right watch or the right car or vacationing in the right places. So if that's important to you and you are willing to pay for it, get your own "guy." If not, stick around here.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by bampf » Fri Oct 20, 2017 5:40 pm

Nope. Not even a little bit.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by Dottie57 » Fri Oct 20, 2017 5:46 pm

No need for an FA. Bogleheads more than siffices.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by Toons » Fri Oct 20, 2017 5:50 pm

No
:happy
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by fipt2030 » Fri Oct 20, 2017 5:58 pm

What if he charges flat fee, comparable to AUM fees of 0.1% and prefers DFA funds Vanguard bond funds and bounce off things


Totally new to AA

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badbreath
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by badbreath » Fri Oct 20, 2017 5:59 pm

I have never used one nor have I even talked to one.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by Tycoon » Fri Oct 20, 2017 6:04 pm

Nope.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by itstoomuch » Fri Oct 20, 2017 6:04 pm

yes, but for financial ideas and strategies. We did get LTCi and d GLWB VA's from advisor when Fidelity and Vanguard did not offer them and we had accounts with both.
But I also do my own "stuff" :greedy
I also like the "option" to Blame someone else for my mistakes because we paid for that "right" in the fees. :x :annoyed.
YMMV

I also pay or have a commission relationship with a seller's RE, a buyer's RE, a Medicare broker, legal advisor, and a CPA. I also pay a neighbor for his time and farm equipment.
YMMV
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by delamer » Fri Oct 20, 2017 6:13 pm

Sandtrap wrote:
Fri Oct 20, 2017 5:19 pm
The only difference to a FA . . and broker. . . and brokerage rep. . . between a small, medium, and substantial net worth is the amount of "drooling" and the size of the bib. I have at times been in a room full of helpful professionals and felt like the lobster, or was it the lobster picture on the bibs? :shock:

However, I have played golf with and befriended many a businessman that were better off paying the AUM fee for their financial advisors. Not everyone has the sense or constitution, or interest, in doing it themselves. In fact, at times, it can be a significant bragging ritual when comparing "my financial advisor" (as if someone is wealthy enough not to have to bother with the dirty business of handling finances).

This has been my experience, though I've never had a FA.

I wonder if there are any Bogleheads that have or would admit to having an AUM FA?
Love the lobster and bib analogy!

Look, someone is better off paying a 1% AUM to an adviser who provides them with an appropriate and tax-savvy portfolio of stocks and bonds than they are sticking all their money in CDs or in the stock-of-the-month.

The problem, as we know, is finding an adviser who provides an appropriate, tax-savvy portfolio.

We have never used an AUM adviser.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by Artsdoctor » Fri Oct 20, 2017 6:32 pm

Grt2bOutdoors wrote:
Fri Oct 20, 2017 5:16 pm
You mean like the FA who wanted to put me in a tax efficient variable annuity to shelter the money that was already sheltered in my 401k plan? :oops:
Yikes! They just love variable annuities, don't they?

Yes, I used a financial advisor once. We moved to LA from the East Coast more than 20 years ago, and I was paralyzed by the real estate prices out here. I sat down with a FA who charged by the hour and asked him specifically, "how can anyone reasonably afford a house out here." He was terrific, and was worth every penny.

Other than that, no. That doesn't mean they can't have value, though.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by TheHouse7 » Fri Oct 20, 2017 6:43 pm

radiowave wrote:
Fri Oct 20, 2017 5:25 pm
RadAudit wrote:
Fri Oct 20, 2017 5:21 pm
My FA is Bogleheads.org, the books, the wiki ... Their charge for AUM seems reasonable.

Many thanks to all.
+1 :)
+1
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by auntie » Fri Oct 20, 2017 6:49 pm

Nope.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by hicabob » Fri Oct 20, 2017 6:56 pm

I think most bogleheads have personal finance as a useful hobby, which puts us among a select few but with interesting attributes, among them being we are quite unlikely to employ a finance manager due to the overhead cost.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by Money Market » Fri Oct 20, 2017 6:57 pm

Sorry, I meant, a fee-only fiduciary FA.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by CppCoder » Fri Oct 20, 2017 6:58 pm

Once, when I was young, a cute girl told me her friend was a new financial adviser and needed to talk to professionals to try to build clientele. So, after this girl asked if I would see her friend, I went to an American Express (now Ameriprise) financial adviser. I talked to them for about an hour, and after being somewhat skeptical about their pitch, they finally asked me sarcastically if I thought I could do a better job investing my money myself. I said, yes, I think I could and walked out never to talk to a financial planner again. In the long run, I'm sure it helped significantly with growing my portfolio :D . In the short run, it didn't help so much with the cute girl. :oops:

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by blueblock » Fri Oct 20, 2017 6:58 pm

No. :P

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by yukonjack » Fri Oct 20, 2017 6:59 pm

That’s one of the real bonuses of discovering this website. You don’t need a FA. And what a savings.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by JBTX » Fri Oct 20, 2017 7:02 pm

Sandtrap wrote:
Fri Oct 20, 2017 5:19 pm
The only difference to a FA . . and broker. . . and brokerage rep. . . between a small, medium, and substantial net worth is the amount of "drooling" and the size of the bib. I have at times been in a room full of helpful professionals and felt like the lobster, or was it the lobster picture on the bibs? :shock:

However, I have played golf with and befriended many a businessman that were better off paying the AUM fee for their financial advisors. Not everyone has the sense or constitution, or interest, in doing it themselves. In fact, at times, it can be a significant bragging ritual when comparing "my financial advisor" (as if someone is wealthy enough not to have to bother with the dirty business of handling finances).

This has been my experience, though I've never had a FA.

I wonder if there are any Bogleheads that have or would admit to having an AUM FA?
I could see the value in a FA for some people, if the FA actually gave the correct advice. But their compensation systems are totally geared to selling you bogus fee laden crap. Like many things these days people sell “pseudo knowledge”. What they know and sell is just flat out false.

For some I do think there is value in a good CPA, especially if you have a business or are self
Employed. And probably an attorney for estate planning purposes. But just for investing, youd be better off just putting everything in a vanguard target date. retirement fund if you didn’t want to deal with it at all.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by Tal- » Fri Oct 20, 2017 7:05 pm

Yes. We pay a flat fee of $2K/year for a financial adviser, and find the relationship worth the cost. We don't really need the asset allocation help, but find that having an expert talk us through big financial decisions is a big help.

The BH community is as savvy and financially stable of a community that you'll find. And in that way, it is wonderful resource, and a group that will not typically have interest in, or benefit from a financial adviser. I'm just an exception to that rule :)
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by McGilicutty » Fri Oct 20, 2017 7:27 pm

fipt2030 wrote:
Fri Oct 20, 2017 5:58 pm
What if he charges flat fee, comparable to AUM fees of 0.1% and prefers DFA funds Vanguard bond funds and bounce off things


Totally new to AA
That doesn't sound terrible. DFA funds have pretty much tracked their corresponding indices (See https://www.wsj.com/articles/dfa-funds- ... 1488769801).

Personally, if you wanted to invest in a DFA fund, I would recommend just finding a corresponding index fund with a lower expense ratio.

Be careful with advisors. Make sure you get the complete picture of all fees for anything he tries to sell you -- that includes his/her fee, front-end fees, back-end fees, and any annual expenses (expense ratio).

The best thing you can do is continue to read this site until you get comfortable acting as your own advisor. However, if you really want to use an advisor for now, what you've described above isn't horrible.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by 6miths » Fri Oct 20, 2017 7:32 pm

No we don't. I have a really good accountant who used to work for the tax department and feel that I get great value for money from him. Have always enjoyed going to 'educational' dinners in expensive restaurants and listening to pitches for the newest, latest greatest product. Every time I listen to sales pitches that twist numbers and sometimes outright fabricate numbers and reflect on who is paying for the fancy dinner I am reassured that going without an FA was the better way to go.
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fipt2030
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by fipt2030 » Fri Oct 20, 2017 7:50 pm

McGilicutty wrote:
Fri Oct 20, 2017 7:27 pm
fipt2030 wrote:
Fri Oct 20, 2017 5:58 pm
What if he charges flat fee, comparable to AUM fees of 0.1% and prefers DFA funds Vanguard bond funds and bounce off things


Totally new to AA
That doesn't sound terrible. DFA funds have pretty much tracked their corresponding indices (See https://www.wsj.com/articles/dfa-funds- ... 1488769801).

Personally, if you wanted to invest in a DFA fund, I would recommend just finding a corresponding index fund with a lower expense ratio.

Be careful with advisors. Make sure you get the complete picture of all fees for anything he tries to sell you -- that includes his/her fee, front-end fees, back-end fees, and any annual expenses (expense ratio).

The best thing you can do is continue to read this site until you get comfortable acting as your own advisor. However, if you really want to use an advisor for now, what you've described above isn't horrible.
That's the plan, getting behind reading part
They are not pushy, I did what you said, they are comfortable with Vanguard similar bond funds but insist on DFA for other mutual funds, they claim DFA is superior to Vanguard for international diversification

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by joe8d » Fri Oct 20, 2017 7:54 pm

No. Always been DIY.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by JW-Retired » Fri Oct 20, 2017 8:01 pm

Use a financial advisor? Not a chance due to a bad experience with a CPA around 1973. But it was actually lucky and I should posthumously kiss the guy since It cured me from ever using such leeches again.

I'm guessing it probably has saved me and DW well north of $1M because I was forevermore a DIY investor. :beer
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by SlowMovingInvestor » Fri Oct 20, 2017 8:03 pm

fipt2030 wrote:
Fri Oct 20, 2017 5:58 pm
What if he charges flat fee, comparable to AUM fees of 0.1% and prefers DFA funds Vanguard bond funds and bounce off things


Totally new to AA
Is that a hypothetical, or do you actually know someone who does that ? I'd be interested for at least a portion of my portfolio (assuming the 'flat fee' doesn't assume a large initial base). But I'm really only using the low cost FA for access to DFA, and would likely switch out once my assets are invested in DFA.

EDIT: Reading on, it seems like you do know someone who is willing to be an FA at 0.1% and provide access to DFA. Is this FA one whose firm you can share here ?
Last edited by SlowMovingInvestor on Fri Oct 20, 2017 8:15 pm, edited 1 time in total.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by smitcat » Fri Oct 20, 2017 8:14 pm

itstoomuch wrote:
Fri Oct 20, 2017 6:04 pm
yes, but for financial ideas and strategies. We did get LTCi and d GLWB VA's from advisor when Fidelity and Vanguard did not offer them and we had accounts with both.
But I also do my own "stuff" :greedy
I also like the "option" to Blame someone else for my mistakes because we paid for that "right" in the fees. :x :annoyed.
YMMV

I also pay or have a commission relationship with a seller's RE, a buyer's RE, a Medicare broker, legal advisor, and a CPA. I also pay a neighbor for his time and farm equipment.
YMMV
I also use a RE agent who only gets paid when a transaction of my approval gets completed
I use legal advice when necessary on a specific quoted service based upon the details of that specific task.
And my CPA clearly states his costs per required need(s) each year that we have dine business.

In my case I loan equipment to two of my neighbors but if there is money involved I ask for a clear fixed amount and not a % of what they have available to offer.

Its good you have someone to blame - we only have ourselves to blame now. We feel much more comfortable with that at this point in life.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by remomnyc » Fri Oct 20, 2017 8:19 pm

Yes. I hired a financial planner when we hit our first $1M to look at the big picture (portfolio, insurance, taxes, retirement planning, etc). It was fee only. 10 years later and ready to RE, I hired one again to review the portfolio, tax efficiency, withdrawal strategy, and estate planning. Again, it was a fee only planner, and both times, it was worth every penny.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by frugalecon » Fri Oct 20, 2017 8:20 pm

hicabob wrote:
Fri Oct 20, 2017 6:56 pm
I think most bogleheads have personal finance as a useful hobby, which puts us among a select few but with interesting attributes, among them being we are quite unlikely to employ a finance manager due to the overhead cost.
This is such a great observation; it really is like a hobby, and I enjoy reading BH and listening to relevant podcasts. The only difference being that this hobby is saving me tens of thousands of dollars yearly in fees. Once your net worth is in the $1.5 million range, just a 1% AUM fee is like a new car every two years. Crazy.

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by Diogenes » Fri Oct 20, 2017 8:22 pm

McGilicutty wrote:
Fri Oct 20, 2017 7:27 pm
fipt2030 wrote:
Fri Oct 20, 2017 5:58 pm
What if he charges flat fee, comparable to AUM fees of 0.1% and prefers DFA funds Vanguard bond funds and bounce off things


Totally new to AA
That doesn't sound terrible. DFA funds have pretty much tracked their corresponding indices (See https://www.wsj.com/articles/dfa-funds- ... 1488769801).

Personally, if you wanted to invest in a DFA fund, I would recommend just finding a corresponding index fund with a lower expense ratio.

Be careful with advisors. Make sure you get the complete picture of all fees for anything he tries to sell you -- that includes his/her fee, front-end fees, back-end fees, and any annual expenses (expense ratio).

The best thing you can do is continue to read this site until you get comfortable acting as your own advisor. However, if you really want to use an advisor for now, what you've described above isn't horrible.
I think that many advisors who prefer DFA funds do so because they are generally not available to the self-directed investor, thus making the Advisor the gatekeeper. As was mentioned, you can find funds that mirror their returns or better. When you say net worth more than $1M, I assume you are talking about investable assets, not home equity. That’s not a lot these days.
There is a place for a good FA for a spouse to consult if she doesn’t know about investing and something happens to you. But certainly not a one man band, a fee based consult with someone at Vanguard, Schwab, or USAA, would do the trick in that case.

Many FA’s are in the same category as insurance agents trying to sell commission laden and dubious LTCI or whole life policies, and using the familiar ‘it’s complicated, or you have a unique situation’ mantra to do so. It really isn’t, and you likely don’t. Now if you are wealthy and don’t want the hassle and don’t care about the fees, say $50M and up to invest that you don’t need to live on, you would have someone just so you could spend your time living.
Last edited by Diogenes on Fri Oct 20, 2017 8:28 pm, edited 1 time in total.

smitcat
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by smitcat » Fri Oct 20, 2017 8:23 pm

Money Market wrote:
Fri Oct 20, 2017 6:57 pm
Sorry, I meant, a fee-only fiduciary FA.
By the time we spend the time to really detail our situation and needs the FA would be into some fairly large hours. If you cannot detail your situation and needs then the time required would likely need to be longer - but in reality the FA will 'lump' you into a known category that generally describes your situation.
In other words - by the time we figured out what we really needed we had more than half the knowledge required to make sensible choices for us that differ from others. When we interviewed FA's at that point it became apparent to us that we could reasonably research/learn the rest in about the same time necessary to bring the FA up to speed.
A big mistake we made early on is to think that an FA has the 'best' and only solution(s).
That is very far from the truth and there is no exact answers to many of these decisions but it makes some folks feel much better to think that there is one exact solution. No shades of grey, no decisions after an FA, no mistakes left to make, no reason to continue to research and learn.
Good luck - YMMV

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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by oldzey » Fri Oct 20, 2017 9:14 pm

"Act as if every broker, insurance salesman, mutual fund salesperson, and financial advisor you encounter is a hardened criminal, and stick to low-cost index funds, and you'll do just fine." -- William J. Bernstein, 2014, from If You Can: How Millennials Can Get Rich Slowly
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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pjshen
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by pjshen » Fri Oct 20, 2017 10:03 pm

We don't see a need for a FA thanks to this forum. For those who have used a fee-only FA for portfolio check, retirement withdrawal strategy and/or tax strategy and felt the services were worth the fee, how much money did they save you and what specific advice led to that savings? I ask because I wonder if it's something that might not be found in the BH Wiki.

zinders
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by zinders » Sat Oct 21, 2017 4:57 am

We do. We have a fee-only FA that gives us access to DFA; management fee is 1 percent. We have quarterly meetings to talk over issues and strategies too. She helped us get things done like wills, life insurance, etc.

So far, it's been very helpful - we didn't know where to start and I had no idea on how to draw up "a number" or a plan to get there. While reading Bogleheads for me gives me supplemental info, my husband and I are still working and don't have the time to devote to it. Our portfolio is $1.1 million now (not including our home equity) and we both wil be getting inheritances in next 20 years. I also like being able to rerun scenarios on a yearly basis, as I'm 48 and still growing in career and salary (husband is older so he's fairly stable).

So, your mileage may vary.

McGilicutty
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by McGilicutty » Sat Oct 21, 2017 5:22 am

fipt2030 wrote:
Fri Oct 20, 2017 7:50 pm
McGilicutty wrote:
Fri Oct 20, 2017 7:27 pm
fipt2030 wrote:
Fri Oct 20, 2017 5:58 pm
What if he charges flat fee, comparable to AUM fees of 0.1% and prefers DFA funds Vanguard bond funds and bounce off things


Totally new to AA
That doesn't sound terrible. DFA funds have pretty much tracked their corresponding indices (See https://www.wsj.com/articles/dfa-funds- ... 1488769801).

Personally, if you wanted to invest in a DFA fund, I would recommend just finding a corresponding index fund with a lower expense ratio.

Be careful with advisors. Make sure you get the complete picture of all fees for anything he tries to sell you -- that includes his/her fee, front-end fees, back-end fees, and any annual expenses (expense ratio).

The best thing you can do is continue to read this site until you get comfortable acting as your own advisor. However, if you really want to use an advisor for now, what you've described above isn't horrible.
That's the plan, getting behind reading part
They are not pushy, I did what you said, they are comfortable with Vanguard similar bond funds but insist on DFA for other mutual funds, they claim DFA is superior to Vanguard for international diversification
Superior is a strong word. Further, past performance is no guarantee of future results. It may be that your advisor is cherry-picking a certain time period that makes the DFA funds he wants to put you in look better than the corresponding Vanguard funds.

International investing is outside of my wheelhouse, but there are a lot of knowledgeable posters here who have experience with international. Before you invest anything with this advisor, I recommend getting all the tickers for everything he wants to put you in (including bonds, any US-centric funds, and international) along with the percentage of your portfolio he wants to put in each and then making a post about it here.

You will likely get some good feedback and then can proceed with this advisor (or not) with more peace of mind.

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FrugalInvestor
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by FrugalInvestor » Sat Oct 21, 2017 5:31 am

Sandtrap wrote:
Fri Oct 20, 2017 5:19 pm
However, I have played golf with and befriended many a businessman that were better off paying the AUM, or fee only fee for their financial advisors. Not everyone has the sense or constitution, or interest, in doing it themselves. In fact, at times, it can be a significant bragging ritual when comparing "my financial advisor" (as if someone is wealthy enough not to have to bother with the dirty business of handling finances).
I've made the same observation. There are those who wear their financial advisor like a badge of honor. It's a status symbol and the advisor knows how to take advantage of this by massaging the client's ego with little perks like golf, dinners or flowers. But if the person has no interest in obtaining the bit of knowledge necessary to handle their own investments or the self confidence to make their own decisions then the fees are the price they will inevitably pay. I sometimes wonder if these people have ever bothered to translate their AUMs into dollars per year, but then circle back to the realization that emotions and the desire for status are powerful things and that some people just have enough money that it is valued less and their time valued more as compared to mine.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

khh
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by khh » Sat Oct 21, 2017 5:44 am

Jack Bogle.

jpohio
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by jpohio » Sat Oct 21, 2017 5:59 am

We did, not any longer. I have learned more from this website in the last year than I ever have from any FA. Thanks to all who have helped...

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cinghiale
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by cinghiale » Sat Oct 21, 2017 6:14 am

Agree with 6miths. No need for a FA, but we use, and benefit from, a seasoned CPA. He does our taxes, and from time to time we consult with him to get his take on Roth conversions, RMDs, taxes, when to take Social Security, and how all of the aforementioned combine each year to maximize our portfolios and minimize the tax hit. These are ad hoc consultations, and have happened maybe three times in twenty years.

I know there are many posters who happily and easily do their own taxes. I’m not one of those. Asset allocation is easy. Tax strategy, like comedy, is hard.
-- Cinghiale | | "We don't see things as they are; we see them as we are." Anais Nin | | | "Sometimes the first duty of intelligent men is the restatement of the obvious." George Orwell

drjazz
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by drjazz » Sat Oct 21, 2017 6:23 am

I used a fee only planner for a year when my wife passed away 7 years ago and I was getting closer to retirement age; he helped me make out a budget, transition to a more conservative asset allocation and made some projections; most importantly he directed me to this site! He subsequently left the business (now managing an arts endowment) and suggested someone else; after a few meetings it became apparent that she was learning more from me than vice versa so I terminated the relationship, and have been doing everything on my own (with the help of what I've read and what I regularly learn from this site). Bottom line - in my case it was definitely worth the $1600 for the initial help but not necessary on an ongoing basis. If you are comfortable managing a simple portfolio of index funds, etfs, cds,etc I don't think paying someone 1% for potentially dangerous advice is worthwhile

racy
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by racy » Sat Oct 21, 2017 6:29 am

Once. The fee-based advisor pointed out the high costs of my wife's 401k. When she mentioned that to her employer he cancelled the 401k plan shortly thereafter. Great....

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