Anyone use a Wealth Manager?

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ThankYouJack
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Anyone use a Wealth Manager?

Post by ThankYouJack » Fri Nov 09, 2018 2:39 pm

Am curious if anyone has used one in the past, what did they charge and do and do you think it was worth it?

Silk McCue
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Re: Anyone use a Wealth Manager?

Post by Silk McCue » Fri Nov 09, 2018 3:10 pm

ThankYouJack wrote:
Fri Nov 09, 2018 2:39 pm
Am curious if anyone has used one in the past, what did they charge and do and do you think it was worth it?
If you wanted to reduce the value of your portfolio over time and increase the wealth of the Wealth Manager then they might be a good idea. You would be far better off paying a by-the-hour only advisor to provide guidance on an as needed basis. There are many threads here on this subject and just saw one a few days ago.

Considering your longevity on this site I can't fathom that it would be a wise choice for you.

Cheers

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Meg77
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Re: Anyone use a Wealth Manager?

Post by Meg77 » Fri Nov 09, 2018 3:11 pm

There are lots of threads on this (search "financial advisor" and you'll get more hits). The term wealth manager can mean a lot of things, but the consensus seems to be that they are useful if you have no interest/aptitude in managing your own affairs or if your situation is extremely complex. But in general they aren't always worth what they charge, particularly for the average affluent investor.

Lots of people on here are adamantly against ANY financial planning or wealth management or investment management services, but many people do need and will happily pay for those sorts of services. They just probably aren't hanging out on this forum.
"An investment in knowledge pays the best interest." - Benjamin Franklin

123
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Re: Anyone use a Wealth Manager?

Post by 123 » Fri Nov 09, 2018 3:35 pm

We have given Vanguard complete control of our retirement accounts by investing them 100% in a Vanguard LifeStrategy fund that matches our asset allocation. It costs us 0.0013% annually ($1,300 per $1 million). Typical fees for many wealth managers are 1% or higher annually ($10,000 per $1 million), who wants to pay that, they are confiscating your assets over time.
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letsgobobby
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Re: Anyone use a Wealth Manager?

Post by letsgobobby » Fri Nov 09, 2018 3:37 pm

123 wrote:
Fri Nov 09, 2018 3:35 pm
We have given Vanguard complete control of our retirement accounts by investing them 100% in a Vanguard LifeStrategy fund that matches our asset allocation. It costs us 0.0013% annually ($1,300 per $1 million). Typical fees for many wealth managers are 1% or higher annually ($10,000 per $1 million), who wants to pay that, they are confiscating your assets over time.
That's actually 0.13%

krafty81
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Re: Anyone use a Wealth Manager?

Post by krafty81 » Fri Nov 09, 2018 4:12 pm

Bad experience for me. I had a WM who was a friend of mine. First mistake. He basically just put my money into two overpriced/expensed mutual funds with Smith/Barney something. Then did nothing while getting 2% of my portfolio. During the 2008 mess, I called his office one day and his secretary said he could not talk to me *all day*. Although he said later she was wrong, that was it for me. Ditched that whole thing and glad I did. Fees, IMO are not worth it if you have any financial savvy at all. You gain that by reading this board, clearly! :happy

ThankYouJack
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Re: Anyone use a Wealth Manager?

Post by ThankYouJack » Fri Nov 09, 2018 4:15 pm

Silk McCue wrote:
Fri Nov 09, 2018 3:10 pm
ThankYouJack wrote:
Fri Nov 09, 2018 2:39 pm
Am curious if anyone has used one in the past, what did they charge and do and do you think it was worth it?
If you wanted to reduce the value of your portfolio over time and increase the wealth of the Wealth Manager then they might be a good idea. You would be far better off paying a by-the-hour only advisor to provide guidance on an as needed basis. There are many threads here on this subject and just saw one a few days ago.

Considering your longevity on this site I can't fathom that it would be a wise choice for you.

Cheers
Do all wealth managers charge a percentage of total assets? I wouldn't pay 1% or more to anyone.

And don't some wealth managers do thing beyond investing - like help with taxes and estate planning? I suppose a good CPA and attorney are a better fit for those though

Jags4186
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Re: Anyone use a Wealth Manager?

Post by Jags4186 » Fri Nov 09, 2018 4:17 pm

ThankYouJack wrote:
Fri Nov 09, 2018 2:39 pm
Am curious if anyone has used one in the past, what did they charge and do and do you think it was worth it?
This is an investment website for do it yourselfers. I’m sure many here have used a financial advisor in the past, but you will not find many here telling you it is or was worth it.

Silk McCue
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Re: Anyone use a Wealth Manager?

Post by Silk McCue » Fri Nov 09, 2018 4:21 pm

ThankYouJack wrote:
Fri Nov 09, 2018 4:15 pm
[
Do all wealth managers charge a percentage of total assets? I wouldn't pay 1% or more to anyone.

And don't some wealth managers do thing beyond investing - like help with taxes and estate planning? I suppose a good CPA and attorney are a better fit for those though
I can't speak for ALL but that is my understanding of their business model. I wouldn't pay any ongoing AUM fee to anyone (unless it was a low as VG at .3% and I still wouldn't do it at this stage of my life and the foreseeable future). Pay by the hour for advice and you get to retain all of the benefits of your investment decisions in broadly diversified low expense ratio investments.

Cheers

hdas
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Re: Anyone use a Wealth Manager?

Post by hdas » Fri Nov 09, 2018 4:28 pm

A relative uses these ppl http://www.mcmllc.com/
She is really happy. She doesn't mind the 1.25% fee. They help her a bit with other services.
She is retired, 73 basically in a 45/55 portfolio. 20% of her bonds are in a Hedge Fund "Elliot Partners". It has done well without low vol.
I've tried to convince her to do it herself, or cheaper. She wouldn't hear any.
Who knows what the internal fees of the funds. Maybe some of their equities are with a fund manager as well. It could be a huge transfer of money. But I can't tell either way because I haven't' compared to benchmarks.

I'm not endorsing this fee collectors by any means. Just telling the experience of somebody close to me with them

ThankYouJack
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Re: Anyone use a Wealth Manager?

Post by ThankYouJack » Fri Nov 09, 2018 4:36 pm

krafty81 wrote:
Fri Nov 09, 2018 4:12 pm
Bad experience for me. I had a WM who was a friend of mine. First mistake. He basically just put my money into two overpriced/expensed mutual funds with Smith/Barney something. Then did nothing while getting 2% of my portfolio. During the 2008 mess, I called his office one day and his secretary said he could not talk to me *all day*. Although he said later she was wrong, that was it for me. Ditched that whole thing and glad I did. Fees, IMO are not worth it if you have any financial savvy at all. You gain that by reading this board, clearly! :happy
Thanks for the feedback. Good to hear about your first hand experience. sorry it didn't work out better. you've convinced me to "stay the course" :sharebeer

ThankYouJack
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Re: Anyone use a Wealth Manager?

Post by ThankYouJack » Fri Nov 09, 2018 4:38 pm

Jags4186 wrote:
Fri Nov 09, 2018 4:17 pm
ThankYouJack wrote:
Fri Nov 09, 2018 2:39 pm
Am curious if anyone has used one in the past, what did they charge and do and do you think it was worth it?
This is an investment website for do it yourselfers. I’m sure many here have used a financial advisor in the past, but you will not find many here telling you it is or was worth it.
Sure, but I've already received great feedback from knowledgeable members on the topic. So I'm glad I started the thread.

Tal-
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Re: Anyone use a Wealth Manager?

Post by Tal- » Fri Nov 09, 2018 4:44 pm

I think financial advisers can provide value to a lot of people.

Yes - most charge an AUM in the 1% to 2% range. When you do the math (and you always should), this can get offensively high.

You can find hourly financial advisers, but they tend to be crazy expensive - and I think paying an hourly rate would discourage communication, which defeats the purpose.

And, you can find some advisers that will do it for a flat fee. We actually use a financial planner who we pay a couple thousand dollars per year. We meet with him quarterly, and work through any type of financial topics ranging from retirement planning to charity to taxes to college planning to insurance to fund selection/allocation to house financing decisions etc. We've paid him a total of $10K in the last few years, and he has provided us value at that cost.

Not for everyone, but it's worked well for us.
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HueyLD
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Re: Anyone use a Wealth Manager?

Post by HueyLD » Fri Nov 09, 2018 4:55 pm

I have seen enough on both sides of money management debate to see the merit of either option.

There are very few good hourly advisors around because the simple harsh fact for such a model is that they cannot make a living being an hourly advisor without a steady revenue stream from AUM fees.

In addition, not everybody can DIY. Just look at numerous threads on this forum about disinterested spouses and concerns expressed by DIY spouses over their post mortem strategies.

If asset management plan is not set up before the DIY spouse either becomes incapacitated or dies, the very likely outcome is that the surviving spouse will be swamped by smooth talking and charming salesperson and you can guess what the likely investment plan could be.

MikeG62
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Re: Anyone use a Wealth Manager?

Post by MikeG62 » Fri Nov 09, 2018 7:30 pm

Meg77 wrote:
Fri Nov 09, 2018 3:11 pm
There are lots of threads on this (search "financial advisor" and you'll get more hits). The term wealth manager can mean a lot of things, but the consensus seems to be that they are useful if you have no interest/aptitude in managing your own affairs or if your situation is extremely complex. But in general they aren't always worth what they charge, particularly for the average affluent investor.

Lots of people on here are adamantly against ANY financial planning or wealth management or investment management services, but many people do need and will happily pay for those sorts of services. They just probably aren't hanging out on this forum.
^This is well said Meg77. I share your views.
Real Knowledge Comes Only From Experience

random_walker_77
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Re: Anyone use a Wealth Manager?

Post by random_walker_77 » Fri Nov 09, 2018 11:19 pm

Before the dot-com crash, when I was a young engineer at a hot little company known for stock options, I was approached by a UBS wealth advisor w/ a VP title, who listed a who's who of senior engineering leaders among his clients. I'd been a vanguard customer since my first summer job (thanks Dad!) and was highly skeptical, but the wealth manager was charismatic, and a really good salesperson. He talked me into putting half with him, and I now think of that as an expensive tuition. I do recall him getting visibly jolted when I told him my money was with vanguard, but he recovered and kept up his pitch.

The sales pitch was something: he talked up their research capabilities and resources, the importance of independent advice, the potential to do better than indexes during down markets, the value of ancillary services for future home buying/financing, and his connections for silicon valley networking. That he listed many highly respected senior executives as clients was also persuasive. There was some ego-stroking, and some ego grooming. That I was small potatoes, but they'd be doing me a favor in the hopes that I became a sizeable customer in the future. That they could offer exclusive perks to their big customers. There were allusions to special funds that their best customers could get in on, some "friends of so-and-so fund" that had exceptional returns. In retrospect, I wonder if that referred to Bernie Madoff. There was also oblique references about special tax-minimization schemes through their Swiss parent office offered to their biggest customers, which I now think might be referencing the infamous UBS tax-evasion scheme.

Bottomline, he constructed a "customized" portfolio of over 12 funds. All with 5% front end loads, hefty expense ratios, 12b-1 marketing fees, and more than a few of the funds were later sued by customers for improprieties, which I saw as a letter attached to the annual report, explaining settlement payments. There was a fair bit of overlap too -- the cynic in me thinks they keep the number of funds high to make it look more complicated. The half that I kept at Vanguard performed much, much better.

I should have known better, but I was young, and they are *really* good at sales. It was an expensive lesson, but at least I didn't have that much money then. If you had to get help, I'd strongly suggest you look to Vanguard's PAS. At least with vanguard, I believe you can safely trust that they won't be ripping you off.

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GerryL
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Re: Anyone use a Wealth Manager?

Post by GerryL » Fri Nov 09, 2018 11:31 pm

random_walker_77 wrote:
Fri Nov 09, 2018 11:19 pm
Before the dot-com crash, when I was a young engineer at a hot little company known for stock options, I was approached by a UBS wealth advisor w/ a VP title, who listed a who's who of senior engineering leaders among his clients.

That he listed many highly respected senior executives as clients was also persuasive.
I would be very wary of anyone who named his clients. How do you know he is telling the truth? Would you call them up and ask? If they really are his clients, does he have permission to use their names?

carolinaman
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Re: Anyone use a Wealth Manager?

Post by carolinaman » Sat Nov 10, 2018 6:53 am

I have no desire to make a manager wealthy! I would much prefer to increase by wealth instead.

afan
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Re: Anyone use a Wealth Manager?

Post by afan » Sat Nov 10, 2018 6:33 pm

If someone convinced me that Warren Buffet was using them for financial advice I would be fascinated. I would not hire them as an investment manager for me, but I would be fascinated.
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Re: Anyone use a Wealth Manager?

Post by wabash_sphinx » Sat Nov 10, 2018 10:02 pm

I have told several wealth managers/advisors that I'm willing to work with them if they only charge me a percent of my earnings that beat the S+P 500 index.

So far no one has been willing to do this.

I think managers/advisors have their place, but its not for me. I would just want to make sure they are providing value, whether that's charge in annual percent or time-based costs, I would want to make sure something of value is being returned.

What is amazing about Bogleheads is that I think we get more resources in aggregate than any advisor could provide alone, and at a cost that no one can compete with!

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sleepysurf
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Re: Anyone use a Wealth Manager?

Post by sleepysurf » Sun Nov 11, 2018 8:37 am

Before becoming a Boglehead, I had a number of Financial Advisors over a ~25 yr period, paying from 0.6% - 1% AUM, with a typical portfolio comprising 10-20 higher E.R. active funds +/- individual stocks and bonds. In retrospect, I consider what they cost me the "expensive tuition" I paid for my financial/investing education. Unfortunately, I'm still trying to unwind from many of those legacy holdings in my Taxable account that have significant unrealized cap gains. Fortunately, my "post-grad" education at BH has been tuition-free!

The only one that offered any real value was the last one (0.6% AUM), who provided a comprehensive annual financial plan, insurance review, retirement projections, etc., and most importantly, reassured my DW that I knew enough to manage our financial future without needing the Advisors services! We took full control ~2 year ago, and my DW has (slowly) gained confidence.

For those just learning, or otherwise uninterested in fully self-managing, I would just use Vanguard's (0.3% AUM) Personal Advisory Service, plus a good Estate Planning Attorney (+/- CPA for tax advice). One can always take over themselves if/when they feel able, without having to worry about unwinding from a complex portfolio like me (which you could still end up with, even if using other lower cost Robo-Advisors or Fidelity/Schwab offerings).
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obgraham
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Re: Anyone use a Wealth Manager?

Post by obgraham » Tue Nov 13, 2018 6:48 pm

Just listen carefully to the pitch by that "advisor" guy who advertises on TV: "We do better when you do better". Of course. When your assets rise, his amount rises, as it is a fixed percentage of your assets. What he fails to add is that he does just fine when your assets decline, also. Meanwhile he's badmouthing the fee-only FP's.

No wonder he's been nailed by the fraud police.

Mike Scott
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Re: Anyone use a Wealth Manager?

Post by Mike Scott » Tue Nov 13, 2018 7:31 pm

If I had enough money to interest a wealth manager, I would "retire" and pay myself to do it.

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GerryL
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Re: Anyone use a Wealth Manager?

Post by GerryL » Tue Nov 13, 2018 7:57 pm

Mike Scott wrote:
Tue Nov 13, 2018 7:31 pm
If I had enough money to interest a wealth manager, I would "retire" and pay myself to do it.
That's what many of us here have done. :wink:

Bir48die
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Re: Anyone use a Wealth Manager?

Post by Bir48die » Tue Nov 13, 2018 9:54 pm

Ok. I'm going to take a stab at this. Can we all try and get the nomenclature correct? There are FA's which don't necessarily understand the total nuances of all aspects of investing. They could be converted insurance people with a license. You might throw wealth managers in there but they could be bankers that have moved through the system. Many use funds and you can pay both the fund management cost plus the FA cost.

Then there are managers who can be very specific in what they deal with. Some don't use funds and but specific sectors that they know and research well. you can call them what you want. Those in my case are experts in midstream MLP's and other small parts of the energy sector that doesn't include exploration.

I have a hybrid of self management and paid management. For those who manage their own portfolios or are committed to three of four fund portfolios, that's great. I have a different philosophy and it works for me. I average my few bases so it's not one big nut to pay.

As people give advice, think outside the one box. There are many ways to skin a cat.

LovingLife
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Re: Anyone use a Wealth Manager?

Post by LovingLife » Tue Nov 13, 2018 11:46 pm

Where are the customers’ yachts?

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Re: Anyone use a Wealth Manager?

Post by AlphaLess » Wed Nov 14, 2018 12:28 am

ThankYouJack wrote:
Fri Nov 09, 2018 2:39 pm
Am curious if anyone has used one in the past, what did they charge and do and do you think it was worth it?
I would assume that in order to use a Wealth Manager, one ought to be wealthy.

I would consider myself wealthy once I hit $26MM. Until then, I am my own money manager.

When I hit $26MM, I won't need a wealth manager.

Either way, the position of the Wealth Manager in my household has been pink-slipped. No need to file a report with the Labor Department for that RIF.
"You can get more with a kind word and a gun than with just a kind word." George Washington

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