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

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

Post by czeckers » Sat Oct 21, 2017 7:00 am

Not I. Investing is quite simple: Set a reasonable asset allocation, make regular contributions, rebalance every once in a while back to your original AA if things get too far out of whack.

However, it is not easy: the emotional responses of greed and fear can be quite strong and will push you to do the wrong things at the wrong times.

The more you mess with the basic formula, the more likely you are to hurt your portfolio.
The Espresso portfolio: | | 16% LCV, 16% SCV, 16% EM, 8% Int'l Value, 8% Int'l Sm, 8% US REIT, 8% Int'l REIT, 20% Inter-term US Treas | | "A journey of a thousand miles begins with a single step."

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

Post by DarthSage » Sat Oct 21, 2017 10:59 am

I just want to offer a slightly different perspective. Pretty much by definition, if you're on this site, it's because you enjoy handling your own investments. Why would you hire a financial advisor? Some people would just rather not put in the effort of choosing investments, balancing, etc., so they turn it over to professionals. Sure, there's a cost involved, but if they trust the FA, and things are on track, they can focus on things that are more important or meaningful to them, or spend their time earning more money through their skills. Think of it like cooking or yardwork--some people enjoy doing these things themselves, so they don't hire a cook or gardener, even if they can afford it. Other people hate those things, so hiring someone makes sense.

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

Post by baconavocado » Sat Oct 21, 2017 11:38 am

cinghiale wrote:
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.
This is an interesting comment because I don't get how you can separate tax accounting from financial planning. It seems to me that you need to understand the tax implications of anything you're doing with your investments so you might as well file your own tax returns. But I guess if you own a business or have some other situation that makes your tax reporting especially complicated you might want a professional to do it.

Ours has always been pretty straightforward so I've always used Turbotax, and doing my own taxes has given me some insights into our financial planning that I don't think I would have gotten if someone else was doing it, like understanding the AMT. I'm also afraid that if I let someone else do it one year, I'll lose the history I've built up in Turbotax (capital losses, etc.) and I'll have trouble going back.

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

Post by TonyDAntonio » Sat Oct 21, 2017 11:52 am

North of 2 million and I'm still too poor to afford 1% of my money going to an FA every year.

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

Post by DrGoogle2017 » Sat Oct 21, 2017 11:57 am

I was thinking I might need a FA for a larger amount, maybe between $20-$50 million. By then I shouldn’t have to worry. Maybe I should just put 100% in the stock market, if it drops 50%, I still have $10-$25 million to spend.

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

Post by Christine_NM » Sat Oct 21, 2017 12:00 pm

Yet another perspective -- single women are not a big target for financial advisors, so I rarely had anyone trying to sell me anything. Thanks to FA disinterest, I'm north of $2 mil just by saving, mostly into S&P 500 while working and now just use Bogleheads for ideas/keeping up.

The idea that you need an FA is nonsense. You may want one, and that's OK. If you have a business with employees and all that, then it is complicated and you need help. But personal investments should be on autopilot.
17% cash 47% stock 36% bond. Retired, w/d rate 2.85%

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

Post by HongKonger » Sat Oct 21, 2017 12:06 pm

If any advisor had a better crystal ball than mine I might.

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

Post by Steelersfan » Sat Oct 21, 2017 12:10 pm

Nicely north of $1 mil and have never had, nor will I ever need, a F̶i̶n̶a̶n̶c̶i̶a̶l̶ ̶A̶d̶v̶i̶s̶e̶r̶ person to reduce my annual returns.

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

Post by exoilman » Sat Oct 21, 2017 12:32 pm

joe8d wrote:
Fri Oct 20, 2017 7:54 pm
No. Always been DIY.
+1

Learned from my own mistakes in the early seventies.

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

Post by Riverman » Sat Oct 21, 2017 12:33 pm

A little different perspective. In the process of settling a $25-$30 million estate. In the process of hiring a financial advisor to handle everything. They have a demonstrated history of helping families in similar circumstances successfully navigate the many considerations, financial and interpersonal. The hope is to provide financial security for multiple generations.

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

Post by Big Dog » Sat Oct 21, 2017 12:36 pm

^^ Indeed. +2

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

Post by aristotelian » Sat Oct 21, 2017 12:38 pm

I think it's weird that people see more need fir FA with higher net worth. Managing $1m is not that different than $100k. In fact, if you are in a higher tax bracket, a lot of complicated decisions become "no brainers." If you are smart enough to make $1m, you are probably smart enough to preserve it.

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

Post by Finridge » Sat Oct 21, 2017 1:12 pm

Just about everyone here on Bogleheads has the interest, the drive and the sophistication to be their own FA. If you didn't, you would't be here. But there are plenty of people who, for whatever reason, do not have the inclination (as someone else already pointed out).

And I'm sure most of us know people like that among our friends, family and business associates. If you're like me, you try to help them out and point them in the right direction. But with some people that only goes so far.

I think that many people would benefit from paying a FA, if they get the *right* FA. Most of the FA advice I hear is garbage, aimed at increasing their own pocket-books at the expense of their "clients" (actually, their victims).

A good cash fee-only FA could immeasurably help many of these people. So long as it's for consultation only (not management of assets) and they aren't getting any commissions or any asset-based fee. They should be paid in cash either just an hourly fee, or a flat rate (and again only for their time).

But many people don't want to pay out of packet for some reason. Too many are more open to an asset-based fee because the expenses are "hidden". Many FA's charge an asset-based fee of 1%-2% or more of the funds under management. On a $1,000,000 the cost would be $10,000-$20,000. Way more than just paying $1,000 or for for a consultation with a fee-only FA.

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

Post by Finridge » Sat Oct 21, 2017 1:19 pm

aristotelian wrote:
Sat Oct 21, 2017 12:38 pm
I think it's weird that people see more need fir FA with higher net worth. Managing $1m is not that different than $100k. In fact, if you are in a higher tax bracket, a lot of complicated decisions become "no brainers." If you are smart enough to make $1m, you are probably smart enough to preserve it.
Exactly, and not only that, but because the FA fees are typically asset-based, they get exorbitant with large accounts. That 1-2% really adds up... Going with just 1%, the costs come out like this:

$100,000 account = $1,000 per year.
$1,000,000 account = $10,000 per year.
$5,000,000 account = $50,000 per year.

And like you said, there really isn't any difference in managing them--the only thing different is the number of zeros.

The FA fees are due whether or not the account makes a profit. And we're not even counting the commissions they charge for selling non-optimal investments.

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

Post by hulburt1 » Sat Oct 21, 2017 1:20 pm

Have 2.3m..Live on $60000-He would charge me $30000 to 400000 a year. that's 350000 in 10 years. I would put 2 of his kids through Harvard.

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

Post by joeblow » Sat Oct 21, 2017 1:34 pm

Negative ghost rider.

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

Post by KyleAAA » Sat Oct 21, 2017 1:59 pm

Need, no. But it would be nice to have low-cost DFA access. The principles of tax efficient investing are relatively straightforward: total market index funds in taxable as well as small/value if you tilt (true small/value, not VBR), everything else in tax-advantaged. If you must, muni bonds in taxable. I'd likely forgo REITs than own them in taxable but there are options for real estate if you insist and have more than $100k or so to allocate (direct investment or REITs in a VA). I'm 70/30 and would be perfectly comfortable putting about 60% of my portfolio in taxable. If my taxable assets got any larger than that I'd have to start making hard choices.

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

Post by BolderBoy » Sat Oct 21, 2017 2:04 pm

Money Market wrote:
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/
You mean like my last FA who used Rydex Inverse and 2x Inverse funds to lose me 50% of my portfolio? He was market timing and got it wrong 100%!!! of the time (2007 thru 2009).
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

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

Post by dcdowden » Sat Oct 21, 2017 2:18 pm

Many years ago, I had a financial adviser provided as an Executive perk at Megacorp. They provided asset allocation and mutual fund recommendations for our taxable assets in a Schwab Institutional account they could easily monitor. I had to periodically send them summaries of other assets so they could put the total picture together and make recommendations for our 401K plans as well. They also did lifetime and retirement planning exercises. My wife and I met with the adviser a couple times a year. At the time, I thought the service was very useful and let me spend the required 60-80 hours a week focusing on my Megacorp job. When I retired from Megacorp, I found time to study up on personal finance (including Bogle, Bernstein, etc.). I also discovered that tools like Quicken let me easily do the types of analysis that I found most valuable from the adviser. I had the option of personally paying a few thousand $$ per year for the continued FA services, but I decided I really didn't need the help any more. Now with all the resources of Bogleheads available for the occasional question, I am very comfortable managing our finances. I do believe that it is valuable to at least have a Financial Adviser take a look at your overall situation and help make sure you are on a reasonable track. I still remember our FA helping us review our decision to retire from Megacorp - her sage advice at the time was that we would be in very good shape for retirement as long as we didn't do anything stupid with our money. We now have someone at Fidelity (where our IRA's are located) that we meet with once a year for an annual review at no additional charge. Fidelity now has great tools for analyzing all your assets and your retirement plans.

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

Post by scrabbler1 » Sat Oct 21, 2017 2:28 pm

I don't have one, but I do have an unpaid Account Executive at my local Fidelity office. I meet with him once in a while, the last time was in the spring of 2016.

I have had AEs at Fidelity since 2008 when I was getting ready to move forward with an early retirement. The woman AE back then helped me with Fido's RIP program, as I was not familiar with it or with Fido's website in general. She left Fido a few months later and I went through a few more AEs as they seemed to have some turnover at the office. One time, in late 2009, when I was in limbo between AEs, some AE there tried to poach me from another AE. This guy, Mr. Pushy, wanted me to let him take over and manage my portfolio for a price. I wanted no part of that, and as soon as I got home after spending with him two hours of my life I would like to have had back, I fired off a letter to his boss, the office manager. The manager wasn't happy to learn about Mr. Pushy's poaching, as all client transfers are supposed to be approved by him. The manager switched me to another AE who I have been with ever since. I learned Mr. Pushy left Fido not long thereafter.

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

Post by david_that_guy » Sat Oct 21, 2017 2:56 pm

I used an FA about 6 years ago and paid her $500 for a retirement plan (5 years before my retirement 1 year ago). She asked a lot of detailed questions about our (my wife and my) spending and investments and retirement goals and came up with a recommended budget, asset allocation, investments and a plan going forward. Overall, she said I was doing a good job and didn't recommend any major changes except for reducing my stock allocation percentage. She felt that I was taking more risk than I needed to. She strongly believed that it's better to focus on the risk you need rather than the risk you can tolerate. Even though it mostly ended up with a "keep up the good work", I found it was worthwhile.

She did offer to manage our money for 1% AUM (which I declined) but was not pushy about it at all.

I was glad to get a second opinion and validation. I may consider using an FA in the future if I feel that I'm experiencing cognitive decline or someone I trust can convince me I'm experiencing cognitive decline, but like most bogleheads, I think I know enough not to need an FA.

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

Post by White Coat Investor » Sat Oct 21, 2017 2:56 pm

It seems a shame to both pay an AUM AND have to spend all kinds of time on Bogleheads.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by SGM » Sat Oct 21, 2017 3:11 pm

No need. I don't foresee a need in the future.

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

Post by DarthSage » Sat Oct 21, 2017 3:17 pm

Yet another perspective on this...

A few years ago, my sister and her husband received a 7-figure settlement for medical malpractice. Their lawyer sent them to a FA who specializes in people who get windfalls. Sis got the information from the FA, then ran it by me, to see if he was feeding her a line of bull. His advice was perfectly legit. It was very helpful for my sister, because she had never handled that kind of money up until that point. I have no idea if Sis and her husband continue to employ the guy, but I do know that their lifestyle hasn't changed--Sis is still a big cheapskate! She did say that having the money lessened her anxiety, so that's good.

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

Post by technovelist » Sat Oct 21, 2017 3:17 pm

To get back to the original question: I don't.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by stemikger » Sat Oct 21, 2017 3:18 pm

Nope! The Bogleheads are my FA.

But seriously Vanguard makes it very easy for a DIY investor.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by 6miths » Sat Oct 21, 2017 3:48 pm

baconavocado wrote:
Sat Oct 21, 2017 11:38 am
cinghiale wrote:
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.
This is an interesting comment because I don't get how you can separate tax accounting from financial planning. It seems to me that you need to understand the tax implications of anything you're doing with your investments so you might as well file your own tax returns. But I guess if you own a business or have some other situation that makes your tax reporting especially complicated you might want a professional to do it.

Ours has always been pretty straightforward so I've always used Turbotax, and doing my own taxes has given me some insights into our financial planning that I don't think I would have gotten if someone else was doing it, like understanding the AMT. I'm also afraid that if I let someone else do it one year, I'll lose the history I've built up in Turbotax (capital losses, etc.) and I'll have trouble going back.
Agree with all of these sentiments. Investing is pretty simple. The behavioral side more challenging. But taxes are not so simple and as 'small' business person with a corporation taxes are too complicated for me. I do my best to understand them and feel that I am pretty well educated but the changes in the rules year to year can be very challenging and I do not want the worry of getting it wrong. The financial advice industry would like to have us believe that investing was as complicated as tax and business law but I don't think this is the case at all.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by investor » Sat Oct 21, 2017 3:56 pm

I would think anyone smart enough to amass north of $1million would not need an advisor. Unless the $$$ were inherated or obtained in a similar way.

investor.

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

Post by Sandtrap » Sat Oct 21, 2017 4:00 pm

stemikger wrote:
Sat Oct 21, 2017 3:18 pm
Nope! The Bogleheads are my FA.

But seriously Vanguard makes it very easy for a DIY investor.
+1
Absolutely :D

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

Post by Sandtrap » Sat Oct 21, 2017 4:03 pm

investor wrote:
Sat Oct 21, 2017 3:56 pm
I would think anyone smart enough to amass north of $1million would not need an advisor. Unless the $$$ were inherated or obtained in a similar way.

investor.
There are exceptions, of course.
I know many a self made millionaire who is lost in the world of investment finance. In particular, I know one person in the 9 figure club who has nearly zero in funds because he doesn't understand it. All of his assets are in R/E.

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

Post by itstoomuch » Sat Oct 21, 2017 4:07 pm

^ I wish. :oops: :annoyed
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by avalpert » Sat Oct 21, 2017 4:14 pm

Sandtrap wrote:
Sat Oct 21, 2017 4:03 pm
investor wrote:
Sat Oct 21, 2017 3:56 pm
I would think anyone smart enough to amass north of $1million would not need an advisor. Unless the $$$ were inherated or obtained in a similar way.

investor.
There are exceptions, of course.
I know many a self made millionaire who is lost in the world of investment finance. In particular, I know one person in the 9 figure club who has nearly zero in funds because he doesn't understand it. All of his assets are in R/E.
Many exceptions to the point where the exceptions overwhelm the 'rule' - I know enough people who earn 7 figures a year (let alone in net worth) in sales, medicine, law among many other professions who have no strong inclination nor interest to invest in learning how to manage their own investments rather than pay an advisor.

There is no real connection between $1m net worth and financial savvy.

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

Post by vieques » Sat Oct 21, 2017 4:24 pm

Going to be an exception here but with caveats. So, self-made here and I do have an FA but the FA is someone who is fiduciary, is not-only fee-only but also works on a flat hourly rate. Also does not manage assets and fee structure is obviously not AUM based. What I do use his advice for is to make sure what I am doing makes sense. Given our slightly unusual financial situation, HCOL area, and outlook for the next few years, it makes sense to me to periodically talk to someone who has a lot more visibility than I do.

That said, this site itself has given me a lot of information that has made it possible to manage my own money. For the majority of cases, turning here is the first thing I do and I am very thankful to all the members of this amazing community.

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

Post by Sandtrap » Sat Oct 21, 2017 4:43 pm

avalpert wrote:
Sat Oct 21, 2017 4:14 pm
Sandtrap wrote:
Sat Oct 21, 2017 4:03 pm
investor wrote:
Sat Oct 21, 2017 3:56 pm
I would think anyone smart enough to amass north of $1million would not need an advisor. Unless the $$$ were inherated or obtained in a similar way.

investor.
There are exceptions, of course.
I know many a self made millionaire who is lost in the world of investment finance. In particular, I know one person in the 9 figure club who has nearly zero in funds because he doesn't understand it. All of his assets are in R/E.
Many exceptions to the point where the exceptions overwhelm the 'rule' - I know enough people who earn 7 figures a year (let alone in net worth) in sales, medicine, law among many other professions who have no strong inclination nor interest to invest in learning how to manage their own investments rather than pay an advisor.

There is no real connection between $1m net worth and financial savvy.
You are correct.
Absolutely true.

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

Post by 3funder » Sat Oct 21, 2017 4:45 pm

Nope. Just a stock fund, a bond fund, and a checking account.

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

Post by friar1610 » Sat Oct 21, 2017 4:47 pm

No FA at present and feel that I have things nicely under control. My wife may want to use VPAS or a robo after I'm gone.

Consulted twice in the distant past with FAs. Both tried to screw me over. One succeeded to some degree. :oops: A third will not have the opportunity.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by David Scubadiver » Sat Oct 21, 2017 5:44 pm

I have several.

Schwab intelligent portfolio
Wisebanyan
Wealthfronr
M1 Finance.

I like the last one because I can pick my own portfolio and relying on them to simply aimplh allocate the funds I give them the portfolio I designed.

But I haven’t decided to entrust any of them with more than $50,000 yet.

I do very much like it when I have a few hundred or a few thousand in my checking account, pressing a virtual button on my phone and having the money invested in the next day or two in my 3 fund portfolio and 11 individual stocks all in proportion to what I set up previously.
Last edited by David Scubadiver on Sat Oct 21, 2017 5:54 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 gerntz » Sat Oct 21, 2017 5:53 pm

DarthSage wrote:
Sat Oct 21, 2017 10:59 am
I just want to offer a slightly different perspective. Pretty much by definition, if you're on this site, it's because you enjoy handling your own investments. Why would you hire a financial advisor? Some people would just rather not put in the effort of choosing investments, balancing, etc., so they turn it over to professionals. Sure, there's a cost involved, but if they trust the FA, and things are on track, they can focus on things that are more important or meaningful to them, or spend their time earning more money through their skills. Think of it like cooking or yardwork--some people enjoy doing these things themselves, so they don't hire a cook or gardener, even if they can afford it. Other people hate those things, so hiring someone makes sense.
Bingo. Though I would say this is more than a slightly different perspective. It's about 180 degrees.

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

Post by Frisco Kid » Sat Oct 21, 2017 5:56 pm

+1 for always being DIY. Like others have mentioned, consider myself a student of investing principles and find BH very helpful. Full disclosure, the lions share of our investments are in tax advantaged accounts so tax efficiency is not a factor. If we had +$1M taxable I might answer differently though.....

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

Post by Mr.BB » Sat Oct 21, 2017 6:16 pm

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

Post by BTDT » Sat Oct 21, 2017 7:56 pm

Nope :beer
If past history was all that is needed to play the game of money, the richest people would be librarians.

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

Post by KSActuary » Sat Oct 21, 2017 8:46 pm

I am looking to buy a mustang so I logged onto the Camaro web site and get opinions. Mmmmm.

There can be many advantages to using an FA. First, anyone with a net worth over $1.0 million is not likely to be paying 1% - maybe much less. Second, how did they arrive at their net worth? Through investing or was it through work? Many who can accumulate a net worth over $1.0 million in a short fashion are oftentimes better to have a team of professionals help them (CPA, estate attorney and FA) then to go it alone. Lastly, a good FA can provide insight and assistance in areas outside of strict investing.

There can also be several disadvantages. First, The FA is not really the investment manager but merely an asset gatherer. Second, they cannot provide a wide breadth of knowledge to the subject.

Back to the Camaro forum.

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

Post by Exterous » Sat Oct 21, 2017 10:21 pm

I use a AUM manager. My parents used him so he didn't charge me anything until I hit $50,000. Even now it's 'only' 0.67% on everything above that. About 1/3 of my money is with him and while I don't see that money changing anytime soon all new money goes into index funds. He's become a close family friend and is invaluable to my mom now that my dad has passed away as my mom needs more than just me to keep her on track. He also helps with tax advice, bill pay and has done lots of things outside traditional duties like when he plowed my mom's drive way several times over the winter before she moved closer to her kids and grandkids. His connections have also been useful when we've needed quality legal, banking, tax preparation etc. My dad typically handled those or handled finding the right people and I was too far away to always help my mom find good representation after he was gone

It will be a tough decision when my mom passes away. Hopefully he retires or moves to Japan or something around whenever that is otherwise I would feel awkward moving that money and whatever inheritance there is

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

Post by abuss368 » Sun Oct 22, 2017 7:24 am

stemikger wrote:
Sat Oct 21, 2017 3:18 pm
Nope! The Bogleheads are my FA.

But seriously Vanguard makes it very easy for a DIY investor.
Well said!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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

Post by traineeinvestor » Sun Oct 22, 2017 7:48 am

One of my concerns as I get older is the risk that I may "lose the plot" and start making some dumb decisions. As insurance against that risk, I have placed a portion of our assets with a financial adviser subject to a fixed 60/40 asset allocation + prohibition against using debt or derivatives. I view the fees as a form of insurance to ensure that my wife and daughters will have at least something if I go off the rails.

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

Post by Theseus » Sun Oct 22, 2017 8:09 am

I don't use it right now. But I will use a cash-fee only (or Fidelity or Vanguard assigned FA - I have accounts there) soon to do some specific planning or validate a plan I develop myself.

There is a lot of resentment towards FA on this forum. And I completely understand why that is for the AUM based FAs. I would never hire anyone with AUM commission and would definitely recommend staying away from them.

But a I think a good cash-fee only financial planner can help develop a plan and avoid making costly mistakes - especially if you don't have the time or confidence to do it yourself even with the help of Bogleheads here.

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

Post by Wild Willie » Sun Oct 22, 2017 8:40 am

As with most of the respondents to this thread, I/we do not use a FA and our "net worth is north of $1M". In an earlier post in a different thread, I explained how we and about 10 other friends with similar backgrounds (and probably assets but not sure because we don't reveal our "pot of gold") compare notes each year. We self report our "mix" (i.e. asset allocation), our ROR and whether or not we use an FA to manage our investments. We are mostly 50/50 on the use of FA's as compared to those of us who DIY. While those with FA's seem to have a slight edge in ROR over the past 4 years we have participated in this exercise, it seems that those with FA's seem to be a little more aggressive with their asset allocation as compared to the DIY'ers. I think that is the difference, at least with our little experiment, and perhaps it is because the use of a FA gives those a little more confidence to be more aggressive with their asset allocation while the DIY'ers are more conservative investors.

But perhaps I'm wrong. I just know that following Bogleheads philosophy and reading how others of the same ilk invest has helped me immensely, especially in sleeping well at night.

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

Post by dbr » Sun Oct 22, 2017 8:46 am

Wild Willie wrote:
Sun Oct 22, 2017 8:40 am
As with most of the respondents to this thread, I/we do not use a FA and our "net worth is north of $1M". In an earlier post in a different thread, I explained how we and about 10 other friends with similar backgrounds (and probably assets but not sure because we don't reveal our "pot of gold") compare notes each year. We self report our "mix" (i.e. asset allocation), our ROR and whether or not we use an FA to manage our investments. We are mostly 50/50 on the use of FA's as compared to those of us who DIY. While those with FA's seem to have a slight edge in ROR over the past 4 years we have participated in this exercise, it seems that those with FA's seem to be a little more aggressive with their asset allocation as compared to the DIY'ers. I think that is the difference, at least with our little experiment, and perhaps it is because the use of a FA gives those a little more confidence to be more aggressive with their asset allocation while the DIY'ers are more conservative investors.
You can't compare returns without also comparing risk, and you can't meaningfully compare different portfolio performance numbers over short terms such as annual results even for a period of a few years. It may be a helpful observation that advised investors are comfortable being more aggressive but it remains to be seen if that is a good thing. It is easy to be more aggressive when the S&P 500 index goes from 700 to 2600 for eight years.

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

Post by minesweep » Sun Oct 22, 2017 8:47 am

No, I never had a fee based or fee only financial advisor.

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

Post by JamesSFO » Sun Oct 22, 2017 9:14 am

Short answer no; however, when Vanguard had the "ask a CFP" offering for Flagship I did use it for 2 years in a row. It helped reaffirm my sense that I was overall on course. 70% stock/30% bond, w/in stock 70% US/30% int'l, basically using 3 fund portfolio with about $10K of play money invested in individual stocks.

I've seen the FA's my parents (who are in the $10M+ range) work with over the years and consistently they are pretty much snake oil salesmen (and women). While they've had some good suggestions, the good is buried in a lot of bad, so for example they did create a decent municipal bond ladder for my parents. Probably outperformed a muni bond fund BUT had the problem that my parents had no knowledge of the risk of any individual bonds and my parents weren't checking the bonds (nor was the FA, he had moved on). The other good suggestion was getting 2nd to die whole life insurance policies to mitigate estate taxes. But again, with the estate tax limit where it is now (vs when suggested) it is unclear if that will add up.

Those are the two good ideas over ~15 years, on the other hand EVERY meeting comes with opaque fee product brochures that are VERY glossy and persuasive and an hour of my time to research why the thing is a ripoff. So basically caveat emptor.

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