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

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ychuck46
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by ychuck46 » Sun Oct 22, 2017 10:10 am

By educating myself and after years of experience, I find I can lose money in the markets just as well as the vast majority of FAs out there. I can save their outrageous fees and have that much more $ to lose in the markets.

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

Post by my name » Sun Oct 22, 2017 11:04 am

I've been investigating AUM/FA/CPA/CFP help. This is should I become incapacitated, I am 70. I agree with much that has been said.

A trend is CFPs are becoming AUM only - "wealth advisors". They have multiple offices in wealthy counties. They do not want the little guy or gal. When attending an event at a senior facility, a "'wealth manager" demoed his planning tool on an IPad, and gloated about the responsiveness of the software to his data entries for "what if" scenarios. Attendees would be wealthy given the financial requirements to enter the facility. These seniors seemed passive and light on investment knowledge given their questions, people the "wealth manager" would be happy to have as clients. I followed up by email inquiring about his management services for a one-time fee-only financial review. He put me off immediately saying he only accepted those with money to manage, starting at 1%, so $10,000 for the first million. He reminded me of the TV show "Better Call Saul" and how seniors are taken advantage of.

An attorney referred me to someone with both CFP and CPA. That seemed a nice combo. A CFP likely has little tax knowledge, all I saw say to talk your plans over with your tax advisor just like brokerages have written. And a CPA is typically focused on small business owners, and on .... taxes!

CFPs at known companies (not lone wolfs) seem light on experience/years. Perhaps due to a stream of recent layoffs this past decade, and many with second careers. If you look at their LinkedIn profile, you can tell a lot about edu and background.

FPs want to manage your money, and in doing so (many) will move your investments to a place and funds they use (one uses Fidelity, others have places/funds I never heard of). If you are incapacitated and aged, that may not be a problem for you.

A CPA tax expert who boasted financial planning knowledge sounded good, I called. The office says no help unless they do your taxes. I don't need that, no one-time advisement.

A CFP (lone wolf) who does lots of TV and radio shows (I'm in NY Metro area) did see me for a free hour. He seemed rich as heck and very successful. His push, like many, was to sell products that made him money. Were there a strong benefit for me and a product made sense, that would not be a problem. But he was a true salesman, and came across believable, trying to sell things that made no sense for me. I countered with what I know about a product, and why I did not need that, and he could not counter-counter me. Finally he said he did not think we could do business. I left, a bit shell-shocked, but did get good points from him. To sell my individual stock up to the top of my bracket. And to educate myself about charitable products (aside from itemized deduction) - DAF (the company holding the funds you delay giving away is the one that benefits, no wonder brokerages push this) and QCDs, which I learned were not for me.

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

Post by tncoltsfan » Sun Oct 22, 2017 11:32 am

Is anyone replying to this thread actually north of $1 million? :beer

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

Post by LadyGeek » Sun Oct 22, 2017 11:51 am

This thread is now in the Personal Finance (Not Investing) forum (advisor).

Also see the wiki: Investment adviser and Financial planner

tncoltsfan, Welcome!
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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 12:00 pm

tncoltsfan wrote:
Sun Oct 22, 2017 11:32 am
Is anyone replying to this thread actually north of $1 million? :beer
Does she or doesn't she? Only her FA knows for sure.

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

Post by indexonlyplease » Sun Oct 22, 2017 12:05 pm

I was 100% stocks up to a few years ago in my 457 plan. Then I used an FA for 3 years and paid 1.2% to manage my money. .9% for the FA and .3% for the funds they used (Dimensional Funds).. Then I found this site and learned about the 3 fund portfolio. So, I dump the FA saved 1.2% on the fees.

I would state it was worth the time with the FA while I was learning more. She was very helpful and taught me a lot about passive investing and index funds. The only problem is the high cost you learn about when you become educated how fees cost you.

I would think anyone these days could do just fine with a target dated fund and have nothing to do but just invest. No fees to the FA.

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

Post by goodenyou » Sun Oct 22, 2017 12:27 pm

No. There is no need. I don't think there is a significant strategy change for 1-10 million. Beyond that, I would suspect that estate planning and other complex issues make come into play.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by avalpert » Sun Oct 22, 2017 12:29 pm

tncoltsfan wrote:
Sun Oct 22, 2017 11:32 am
Is anyone replying to this thread actually north of $1 million? :beer
Yes

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

Post by student » Sun Oct 22, 2017 1:02 pm

I don't use a FA. I have made a lot of sacrifices (such as no vacations until recent years) and LBYM to accumulate this money. I am too cheap to spend 1% per year. I am willing to spend a one-time fee but not on an ongoing basis. I am not even willing to do Vanguard PAS. If I no longer want to manage my investment, I will just get a target date fund or an asset allocation fund.

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

Post by baconavocado » Sun Oct 22, 2017 1:10 pm

Reading these comments it occurs to me that the financial planning industry is as broken as the residential construction/repair industry. Both CFPs and contractors want to get paid a load of money for not doing too much. Of course it doesn't take 10x as much effort to manage a $10M portfolio as it does a $1M portfolio, but both customers will be charged 1%. I think CFPs must rely on the fact that most Americans don't understand the concept of percentages.

With contractors, they want you to sign a contract that says "I will fix this for x dollars." but they won't tell you how they're going to fix it because then you might be able to do it yourself. Once the contract is signed, the game becomes trying to do the fix as fast and cheap as possible. If you're not satisfied with the fix, too bad, you signed the contract.

It's amazing to me that the market has not come up with a model to fix these professions, to make them more acceptable to consumers.

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

Post by dewey » Sun Oct 22, 2017 1:15 pm

No. I haven't ever, and won't.
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by TravelforFun » Sun Oct 22, 2017 1:19 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/

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.
Nope. Hard to give away 1% of my assets to get advice from someone who may be still in Dave Ramsey's second step.

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

Post by my name » Sun Oct 22, 2017 5:30 pm

baconavocado wrote:
Sun Oct 22, 2017 1:10 pm
It doesn't take 10x as much effort to manage a $10M portfolio as it does a $1M portfolio, but both customers will be charged 1%.
No, the "wealth advisors" charge 1% per million. So if you are worth $2 million, you will pay $20,000 for advise each year.

Additional millions, maybe starting with $5 million, and each million above, is a lesser percent, they scale down as your wealth increases. One advisor said at a certain point (I forget, maybe it was at $10 million and above), it was negotiable.

And they are not setting you up in index funds. They will be doing "advanced" things I'd imagine like buying products that they can be paid additional for, also maybe bringing your investments into their company set of funds, etc.

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

Post by nativenewenglander » Sun Oct 22, 2017 5:57 pm

I have to say, after running several businesses over the years, investing my own money has become easy. The difference of course is I knew my business, but not the investing business. I found the Wellesely Income Fund the perfect place for me and my money. It helps me sleep at night, yet see growth and income. Everyone has to find the right thing that works for them in the casino. I like enjoying my life and what has to give me in return.

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

Post by jmk » Sun Oct 22, 2017 6:51 pm

The part I'm thinking of using an FA for is optimizing withdrawals from SS / tax sheltered / taxable withdrawals and tax efficiency. Also, monte carlo simulations. I know there's programs out there like I-ORP; but don't the FAs have access to more complex software?

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

Post by LadyGeek » Sun Oct 22, 2017 7:06 pm

^^^ Yes, but the results are only as good as what you put into it. Don't confuse "complex" with "accurate".
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by veggivet » Sun Oct 22, 2017 7:07 pm

Never have, and never will. Simple as that.

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

Post by itstoomuch » Sun Oct 22, 2017 7:13 pm

OP wrote:Edit: Sorry, I should have mentioned, a fee-only, fiduciary financial advisor.
PS
We use an AUM, FA. His firm gets a trailing commission of 0.25%. Amounts to $1500yr. He does not participate in our RE transactions nor in my Discretionary Acct.
The Discretionary accounts, I may spend $500-$1000 in trading fees. Never kept track. I only look at the absolute net numbers.
Our CPA gets about <0.1% of total assets for tax preparation and advice or preparation and advice service fee ~1% of annual income.
Our Buyer's RE agent gets a nice commission and we found the properties. In the Seattle area a successful listing and price negotiation is done within 7 days, closing in 30 days. Her value will come to fruition in the future.
Our Seller's RE agent will get a nice commission, he is currently worthwhile since we have farmland and will take a cash buyer.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

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

Post by TroutMD » Sun Oct 22, 2017 7:25 pm

No, waste of money.

If you amass 1m, you are likely not stupid. Nobody will manage your money better than you. Spend some time, educate yourself, and apply BH principles, and all will be well.

Find a per hour advisor if you feel like you absolutely need it, but know when to run away if it turns out they are trying to put you in an annuity.

My CPA/Tax guy also does fee based advising. I ask him the very rare question, and he answers. He is BH like in his style, and all is happy...

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

Post by Johm221122 » Sun Oct 22, 2017 7:52 pm

:o
tncoltsfan wrote:
Sun Oct 22, 2017 11:32 am
Is anyone replying to this thread actually north of $1 million? :beer
If i listened to my first and only "Advisor" I would have a 1 million dollar whole life policy

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

Post by Jimbo9911 » Sun Oct 22, 2017 8:32 pm

No. Never have before either.

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

Post by scrabbler1 » Sun Oct 22, 2017 11:30 pm

I have about $1.4M in the main part of my portfolio. I can't imagine spending even 0.5% of it with a FA. That would be $7,000 a year, more than I spend on health insurance, more than I spend on my co-op maintenance payments, my 2 biggest expenses. It would be a HUGE waste of money!

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

Post by Cruise » Mon Oct 23, 2017 3:54 am

We used to use FAs until we became sufficiently educated (both negatively and positively). I now manage our portfolio, most of which is with Fidelity. We have a Relationhip Manager there who helps us get access to services and information. No fees. We also have a savvy CPA, who is expensive, but has valeue-added over the years. I investigated doing my own taxes, and have determined that would be as foolish as me flying my own plane :)

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

Post by Seasonal » Mon Oct 23, 2017 5:04 am

1) Perhaps the best argument I've seen for a FA is emotional support - stopping you from selling after a big decline or buying after a big run-up.

2) Many in this thread have written that anyone who can amass over $1 million is perfectly capable of managing on their own. Maybe in theory, but I know a lot of people with high net worths who don't have a clue regarding investments and engage in all sorts of self-destructive investing behavior - not having a reasonable asset allocation, chasing performance, tax-inefficient, etc., etc. Whether they'd do better with a FA from a household name firm is another question.

3) Estate planning requires an expert and tax planning can require an expert. However, FAs don't usually provide these services.

4) A lot of the people who past here regularly are more sophisticated and give better advice than the vast majority of FAs.

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

Post by Wild Willie » Mon Oct 23, 2017 7:49 am

dbr wrote:
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.
I disagree that comparing returns without comparing risk can't be done. We've been doing it for 3-4 years. Is it scientific? Of course not, and we don't pretend it is, but we do find it to be a useful exercise.

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

Post by steve roy » Mon Oct 23, 2017 7:58 am

Had a long term financial advisor who not only added no value but took it away. Tense final meeting, and he foot-dragged letting go of my money. Never again.

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

Post by investingdad » Mon Oct 23, 2017 8:59 am

Nope.

Which is surprising because I keep reading those, "Secrets millionaire investors won't Tell You" articles and I've concluded that I'm not doing this the right way cause I don't have an army of advisors.

Oh well.

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

Post by avalpert » Mon Oct 23, 2017 9:09 am

Wild Willie wrote:
Mon Oct 23, 2017 7:49 am
dbr wrote:
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.
I disagree that comparing returns without comparing risk can't be done. We've been doing it for 3-4 years. Is it scientific? Of course not, and we don't pretend it is, but we do find it to be a useful exercise.
What do you find useful about it?

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

Post by technovelist » Mon Oct 23, 2017 9:16 am

jmk wrote:
Sun Oct 22, 2017 6:51 pm
The part I'm thinking of using an FA for is optimizing withdrawals from SS / tax sheltered / taxable withdrawals and tax efficiency. Also, monte carlo simulations. I know there's programs out there like I-ORP; but don't the FAs have access to more complex software?
There is at least one freely available program that helps with the tax optimization issue.
In theory, theory and practice are identical. In practice, they often differ.

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

Post by bertilak » Mon Oct 23, 2017 11:02 am

LadyGeek wrote:
Sun Oct 22, 2017 7:06 pm
^^^ Yes, but the results are only as good as what you put into it. Don't confuse "complex" with "accurate".
I always say don't confuse "precise" with "accurate." This is a common misconception well-understood by those trained as engineers. It is why slide rules were good enough for nearly all 20th century engineering. (Man on the moon -- and back!, atomic energy, etc.) Yes, it IS rocket science and a slide rule does the job!
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by trueson1 » Mon Oct 23, 2017 11:38 am

Nope. No one better at watching my money than me - with the help of bogleheads and a little reading.

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

Post by Laren » Mon Oct 23, 2017 11:54 am

I'm north of 1 million, and I do use an advisor. I'm paying considerably less than 1% though - closer to 0.25%. I'm in index funds (primarily DFA), and because my account is almost completely taxable, muni bonds. For me, the biggest stumbling block to doing it all myself is the bond side. My portfolio is of a size that I think individual bonds make more sense than a bond fund, but I don't have the expertise to buy individual bonds efficiently.

Unless my assumption is wrong that after a certain size, individual bonds are better than a bond fund?

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

Post by Admiral » Mon Oct 23, 2017 12:00 pm

Laren wrote:
Mon Oct 23, 2017 11:54 am
I'm north of 1 million, and I do use an advisor. I'm paying considerably less than 1% though - closer to 0.25%. I'm in index funds (primarily DFA), and because my account is almost completely taxable, muni bonds. For me, the biggest stumbling block to doing it all myself is the bond side. My portfolio is of a size that I think individual bonds make more sense than a bond fund, but I don't have the expertise to buy individual bonds efficiently.

Unless my assumption is wrong that after a certain size, individual bonds are better than a bond fund?
What is the logic behind this assumption? Personally I don't agree, but perhaps you have some specific ideas behind it? Vanguard has lots of low-fee muni bond funds.

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

Post by technovelist » Mon Oct 23, 2017 12:10 pm

Admiral wrote:
Mon Oct 23, 2017 12:00 pm
Laren wrote:
Mon Oct 23, 2017 11:54 am
I'm north of 1 million, and I do use an advisor. I'm paying considerably less than 1% though - closer to 0.25%. I'm in index funds (primarily DFA), and because my account is almost completely taxable, muni bonds. For me, the biggest stumbling block to doing it all myself is the bond side. My portfolio is of a size that I think individual bonds make more sense than a bond fund, but I don't have the expertise to buy individual bonds efficiently.

Unless my assumption is wrong that after a certain size, individual bonds are better than a bond fund?
What is the logic behind this assumption? Personally I don't agree, but perhaps you have some specific ideas behind it? Vanguard has lots of low-fee muni bond funds.
I would assume that the logic is "Why pay any management fee if one has the money to buy a big enough swath of bonds (or stocks, or whatever) to get diversification?"
In theory, theory and practice are identical. In practice, they often differ.

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

Post by Admiral » Mon Oct 23, 2017 12:12 pm

technovelist wrote:
Mon Oct 23, 2017 12:10 pm
Admiral wrote:
Mon Oct 23, 2017 12:00 pm
Laren wrote:
Mon Oct 23, 2017 11:54 am
I'm north of 1 million, and I do use an advisor. I'm paying considerably less than 1% though - closer to 0.25%. I'm in index funds (primarily DFA), and because my account is almost completely taxable, muni bonds. For me, the biggest stumbling block to doing it all myself is the bond side. My portfolio is of a size that I think individual bonds make more sense than a bond fund, but I don't have the expertise to buy individual bonds efficiently.

Unless my assumption is wrong that after a certain size, individual bonds are better than a bond fund?
What is the logic behind this assumption? Personally I don't agree, but perhaps you have some specific ideas behind it? Vanguard has lots of low-fee muni bond funds.
I would assume that the logic is "Why pay any management fee if one has the money to buy a big enough swath of bonds (or stocks, or whatever) to get diversification?"
You of course mean "no fee except the .25% being paid to the adviser who buys the bonds on this poster's behalf"? It's still a fee.

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

Post by Laren » Mon Oct 23, 2017 12:15 pm

Admiral wrote:
Mon Oct 23, 2017 12:00 pm
Laren wrote:
Mon Oct 23, 2017 11:54 am
I'm north of 1 million, and I do use an advisor. I'm paying considerably less than 1% though - closer to 0.25%. I'm in index funds (primarily DFA), and because my account is almost completely taxable, muni bonds. For me, the biggest stumbling block to doing it all myself is the bond side. My portfolio is of a size that I think individual bonds make more sense than a bond fund, but I don't have the expertise to buy individual bonds efficiently.

Unless my assumption is wrong that after a certain size, individual bonds are better than a bond fund?
What is the logic behind this assumption? Personally I don't agree, but perhaps you have some specific ideas behind it? Vanguard has lots of low-fee muni bond funds.
The logic for me is that there is less turnover, and that there's less effective volatility since I'm holding each individual bond to maturity and I'm not subject to the fund buying and selling to deal with redemptions. I don't think I'm saying that very well - it's been awhile since I've reexamined this assumption! I also don't like leverage in a bond fund since bonds are supposed to be the safer part of my portfolio. But I'm very interested in your thoughts on the subject - maybe I'm operating on poor information.

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

Post by DaftInvestor » Mon Oct 23, 2017 12:19 pm

Admiral wrote:
Mon Oct 23, 2017 12:12 pm
technovelist wrote:
Mon Oct 23, 2017 12:10 pm
Admiral wrote:
Mon Oct 23, 2017 12:00 pm
Laren wrote:
Mon Oct 23, 2017 11:54 am
I'm north of 1 million, and I do use an advisor. I'm paying considerably less than 1% though - closer to 0.25%. I'm in index funds (primarily DFA), and because my account is almost completely taxable, muni bonds. For me, the biggest stumbling block to doing it all myself is the bond side. My portfolio is of a size that I think individual bonds make more sense than a bond fund, but I don't have the expertise to buy individual bonds efficiently.

Unless my assumption is wrong that after a certain size, individual bonds are better than a bond fund?
What is the logic behind this assumption? Personally I don't agree, but perhaps you have some specific ideas behind it? Vanguard has lots of low-fee muni bond funds.
I would assume that the logic is "Why pay any management fee if one has the money to buy a big enough swath of bonds (or stocks, or whatever) to get diversification?"
You of course mean "no fee except the .25% being paid to the adviser who buys the bonds on this poster's behalf"? It's still a fee.
And 0.25% is greater than the 0.09% that BND (and other Bond Index Funds) charge. And I'm not sure I would want to hold individual bonds chosen by a third party.

OP: I am North of $1M and don't use a FA. I paid a fee-based FA once that was highly recommended to me - and found my time with him added no value to what I was already doing. What I did do though was higher a lawyer to assure I had a good Estate Plan in place.

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

Post by technovelist » Mon Oct 23, 2017 1:39 pm

Admiral wrote:
Mon Oct 23, 2017 12:12 pm
technovelist wrote:
Mon Oct 23, 2017 12:10 pm
Admiral wrote:
Mon Oct 23, 2017 12:00 pm
Laren wrote:
Mon Oct 23, 2017 11:54 am
I'm north of 1 million, and I do use an advisor. I'm paying considerably less than 1% though - closer to 0.25%. I'm in index funds (primarily DFA), and because my account is almost completely taxable, muni bonds. For me, the biggest stumbling block to doing it all myself is the bond side. My portfolio is of a size that I think individual bonds make more sense than a bond fund, but I don't have the expertise to buy individual bonds efficiently.

Unless my assumption is wrong that after a certain size, individual bonds are better than a bond fund?
What is the logic behind this assumption? Personally I don't agree, but perhaps you have some specific ideas behind it? Vanguard has lots of low-fee muni bond funds.
I would assume that the logic is "Why pay any management fee if one has the money to buy a big enough swath of bonds (or stocks, or whatever) to get diversification?"
You of course mean "no fee except the .25% being paid to the adviser who buys the bonds on this poster's behalf"? It's still a fee.
No, I meant that buying individual bonds would be cheaper (and therefore better) than a bond fund if you had enough money to diversify without the bond fund. I don't see why it would be necessary to hire an adviser to buy individual bonds, so long as you stuck with high ratings.

Note: I have neither stocks nor bonds, either directly or through mutual funds, so I have no horse in this race.
In theory, theory and practice are identical. In practice, they often differ.

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

Post by itstoomuch » Mon Oct 23, 2017 3:40 pm

tncoltsfan wrote:
Sun Oct 22, 2017 11:32 am
Is anyone replying to this thread actually north of $1 million? :beer
Yes. :greedy
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

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

Post by eye.surgeon » Mon Oct 23, 2017 3:49 pm

My net worth is a bit over $1million and I have never used a financial advisor other than the substantial resources available right here. My investments are not complicated, by design. This forum is an invaluable resource and better than an advisor IMO. It takes effort to educate yourself but it's all right here.

I do have a tax accountant prepare my taxes, same one for 15 years, and he charges a flat rate.
"I would rather be certain of a good return than hopeful of a great one" | Warren Buffett

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

Post by Wild Willie » Mon Oct 23, 2017 8:05 pm

avalpert wrote:
Mon Oct 23, 2017 9:09 am
Wild Willie wrote:
Mon Oct 23, 2017 7:49 am
dbr wrote:
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.
I disagree that comparing returns without comparing risk can't be done. We've been doing it for 3-4 years. Is it scientific? Of course not, and we don't pretend it is, but we do find it to be a useful exercise.
What do you find useful about it?
How about the knowledge that others like us choose to go a different route regarding risk and asset allocation? It's called "food for thought" so some of us might possibly consider changing our mind regarding our thoughts for risk and asset allocation and the possible better returns of doing so. I'm sorry if you don't find that useful, but we do.

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

Post by avalpert » Mon Oct 23, 2017 8:08 pm

Wild Willie wrote:
Mon Oct 23, 2017 8:05 pm
avalpert wrote:
Mon Oct 23, 2017 9:09 am
Wild Willie wrote:
Mon Oct 23, 2017 7:49 am
dbr wrote:
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.
I disagree that comparing returns without comparing risk can't be done. We've been doing it for 3-4 years. Is it scientific? Of course not, and we don't pretend it is, but we do find it to be a useful exercise.
What do you find useful about it?
How about the knowledge that others like us choose to go a different route regarding risk and asset allocation? It's called "food for thought" so some of us might possibly consider changing our mind regarding our thoughts for risk and asset allocation and the possible better returns of doing so. I'm sorry if you don't find that useful, but we do.
So comparing returns without accounting for risk gives you knowledge that other choose a 'different route regarding risk and asset allocation' (different from what)?

I don't know why you took my question personally but your answer seems like a non-sequitur. I genuinely want to know, what do you find useful about comparing returns without accounting for risk?

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

Post by meebers » Mon Oct 23, 2017 8:17 pm

I did but now I do not. All self managed.

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

Post by calmaniac » Mon Oct 23, 2017 8:50 pm

smitcat wrote:
Fri Oct 20, 2017 8:14 pm
itstoomuch wrote:
Fri Oct 20, 2017 6:04 pm
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.
I'm a physician and so yes, I agree there are situations (many listed above) for which all of the internet learnin' is not enough. However, buying and selling index mutual funds is a pretty cut and dried process, with lots of guardrails. For this an advisor adds little benefit. If for $1-2k, I could get an advisor as smart and as motivated as some of the best on this discussion group I'd jump at it, but that would cost big time. For $1-2k, you are going to get someone who is frankly average, in both thinking and motivation. My not so humble sense is that most of us are are smarter or more motivated (and sometimes both) than the typical financial advisor available to us.

In a world where I was making these decisions alone and in isolation, I would definitely consider a financial advisor. We are blessed to such access to thoughtful people through so many channels, such as Bogleheads. YMMV.

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

Post by Wild Willie » Mon Oct 23, 2017 9:11 pm

avalpert wrote:
Mon Oct 23, 2017 8:08 pm
Wild Willie wrote:
Mon Oct 23, 2017 8:05 pm
avalpert wrote:
Mon Oct 23, 2017 9:09 am
Wild Willie wrote:
Mon Oct 23, 2017 7:49 am
dbr wrote:
Sun Oct 22, 2017 8:46 am


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.
I disagree that comparing returns without comparing risk can't be done. We've been doing it for 3-4 years. Is it scientific? Of course not, and we don't pretend it is, but we do find it to be a useful exercise.
What do you find useful about it?
How about the knowledge that others like us choose to go a different route regarding risk and asset allocation? It's called "food for thought" so some of us might possibly consider changing our mind regarding our thoughts for risk and asset allocation and the possible better returns of doing so. I'm sorry if you don't find that useful, but we do.
So comparing returns without accounting for risk gives you knowledge that other choose a 'different route regarding risk and asset allocation' (different from what)?

I don't know why you took my question personally but your answer seems like a non-sequitur. I genuinely want to know, what do you find useful about comparing returns without accounting for risk?
Have a good day my friend.

michaeljc70
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Re: Does anyone here with net worths north of $1 mil use financial advisors?

Post by michaeljc70 » Mon Oct 23, 2017 9:46 pm

No.

I think I made a friend that does use one (not fee based) sick when I pointed out how much he has spent over his life. Probably $300k on a portfolio now worth around $2M.
Last edited by michaeljc70 on Mon Oct 23, 2017 10:10 pm, edited 1 time in total.

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

Post by Money Market » Mon Oct 23, 2017 10:09 pm

Thank you everyone for the responses. It is reassuring to know there are others that feel the same. I feel that my portfolio is simple enough, and will remain in the identical funds I've chosen whether I have $10k or $1mil.

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

Post by NYC_Guy » Mon Oct 23, 2017 10:15 pm

I have a (1) CPA/tax guy, (2) a trust/will lawyer, (3) a life insurance broker, (4) a banker (for mortgages and credit lines) and (5) a p&c/liability insurance broker. I have occassionally used my banker’s fixed income desk to buy bonds. But as a general matter, I do not pay anyone to manage my equity positions.

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

Post by Dale_G » Mon Oct 23, 2017 11:06 pm

Yes, north of 1mm for more than 20 years.

I figure I had/have three broad options:

1. I could hand my money over to a FA and spend somewhat less than 1% of AUM and get a screwball set of funds that might match market returns before fees. I have to hope that he doesn't sell my existing index funds with seven figure capital gains - or call me before 9am to tell me how great he is doing.

2. I could buy a nice luxury car each year and then blow it up - or donate it to the local demolition derby club - and hopefully get a free ticket to the event.

3. I could spend a few hours a year looking at the tax efficiency of the portfolio and rebalance if necessary.

Number three has always seemed to be the least hassle to me.

Note: I never had an FA, and don't have a Lawyer, CPA, Estate Planner, Dietitian, Personal Trainer, Decorator, Stylist, Groomer, or Masseuse. Some day I will consider a chauffeur.

Dale
Volatility is my friend

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

Post by pkcrafter » Mon Oct 23, 2017 11:16 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
Are you sure about the fees? DFA only sells through DFA approved advisors and the typical fee is 1%.

https://www.wsj.com/articles/dfa-funds- ... 1488769801


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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