Is this a fair price for a wealth manager financial advisor?

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Ykcor
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Is this a fair price for a wealth manager financial advisor?

Post by Ykcor » Sat Nov 16, 2019 5:45 pm

Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.

HEDGEFUNDIE
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Re: Is this a fair price for a wealth manager financial advisor?

Post by HEDGEFUNDIE » Sat Nov 16, 2019 5:49 pm

What exactly do you get for the $15k?

Trader Joe
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Trader Joe » Sat Nov 16, 2019 5:51 pm

Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.
Is there a reason why you cannot follow the recommendations provided on this site, so that you can do it yourself?

We are in no way investment experts, but we are never in need of a "Wealth Manager Financial Advisor" and their associated costs/fees.

We do everything ourselves, in large part to this site.

HornedToad
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Re: Is this a fair price for a wealth manager financial advisor?

Post by HornedToad » Sat Nov 16, 2019 5:52 pm

Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.
I don't see how that classifies as a fee only financial advisor? Is it a financial advisor or a wealth manager? For a financial advisor its very expensive. For a wealth manager, that's a very cheap rate.

6Pack
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Re: Is this a fair price for a wealth manager financial advisor?

Post by 6Pack » Sat Nov 16, 2019 5:52 pm

A “fair price” is in the eye of the beholder. What I think is fair might be different than what you think is fair. For example, I don’t think paying a mechanic $800 for brakes and rotors is fair when I can do it myself for $200. But if you aren’t handy with tools or comfortable with doing the work, then $800 is a fair price.

Personally, I won’t pay 0.1% AUM plus $10,000/year because I’d rather pay myself the $10,000/year to manage my own finances and save the 0.1% fee.

If you think it’s a good deal and the advisor would bring real value, then only you can decide if it’s a fair price.

Ocean77
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Ocean77 » Sat Nov 16, 2019 6:02 pm

I would find one who charges an hourly fee, i.e. $200 or $300. Then create your own plan beforehand, based on what you know, read and discuss on this forum. Then schedule the hour, show your plan, have the advisor review it, ask your questions, and hear his recommendations. Then if needed, repeat the next year. Or maybe you will be good.

If after this exercise it turns out you have a lot of complicated things that cannot be handled this way and in one hour, then at least you haven't paid much yet and can still look at more expensive options.

capran
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Re: Is this a fair price for a wealth manager financial advisor?

Post by capran » Sat Nov 16, 2019 6:14 pm

I am curious, if you arrived at 5 mil investable assets with the help of an advisor, or on your own? And are you not happy with where you are now, and doing what you have been doing? If you joined this site in 2018, seems like you have read quite a bit. What does Vanguard say? We're less that half that and it seems like we are always getting e mails from Vanguard Flagship Services.

drawpoker
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Re: Is this a fair price for a wealth manager financial advisor?

Post by drawpoker » Sat Nov 16, 2019 6:15 pm

HornedToad wrote:
Sat Nov 16, 2019 5:52 pm
Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
I don't see how that classifies as a fee only financial advisor? Is it a financial advisor or a wealth manager? For a financial advisor its very expensive. For a wealth manager, that's a very cheap rate.

I, too, would be asking just what you getting for the money. For ex, for someone with close to $5 mil to invest, it seems to me expert tax advice would be foremost. Someone highly experienced with both federal and state issues.

Does this so-called wealth manager/financial advisor also have that expertise?

MathIsMyWayr
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Re: Is this a fair price for a wealth manager financial advisor?

Post by MathIsMyWayr » Sat Nov 16, 2019 6:24 pm

There are areas where experts may be invaluable such as tax planning, trust/estate planning, SS strategy, etc. I am no match against well trained and experienced CPAs or attorneys. However, retail investment is completely different. If you do not commit dumb mistakes and stay prudent, you may be as good as any "experts."

retiredjg
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Re: Is this a fair price for a wealth manager financial advisor?

Post by retiredjg » Sat Nov 16, 2019 6:24 pm

That is about what Vanguard's PAS would charge you. Maybe some more because I think their price lowers as you get into the higher $ numbers.

The question is, what do you get for the money? The answer to that could mean you are getting a good deal or you are getting a bad deal.

What we do know about Vanguard is they will not sell you expensive stuff you don't need. This other provider is an unknown on that front, but there is a fair chance they will not be thinking of you first and their company second.

I do not believe (but don't know for sure) that Vanguard provides other services like estate planning and extensive tax advice. Maybe this other provider does provide those things.

It all boils down to what you get for the money.

tibbitts
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Re: Is this a fair price for a wealth manager financial advisor?

Post by tibbitts » Sat Nov 16, 2019 6:35 pm

Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.
I don't think it's high but I know it's not fee-only if they charge AUM.

You could ask for an hourly fee but I wouldn't be surprised if the net result would be you paying the same $15,000.

retiredjg
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Re: Is this a fair price for a wealth manager financial advisor?

Post by retiredjg » Sat Nov 16, 2019 6:37 pm

tibbitts wrote:
Sat Nov 16, 2019 6:35 pm
I don't think it's high but I know it's not fee-only if they charge AUM.
I believe that the term "fee only" includes a service that charges an AUM fee.

If that is so, and I think it is, this "fee only" terminology is full of misunderstandings.

drawpoker
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Re: Is this a fair price for a wealth manager financial advisor?

Post by drawpoker » Sat Nov 16, 2019 6:41 pm

capran wrote:
Sat Nov 16, 2019 6:14 pm
....curious, if you arrived at 5 mil investable assets with the help of an advisor, or on your own? And are you not happy with where you are now, and doing what you have been doing?
I hope the OP returns to answer that. I may be wrong, but my hunch is that most of that $5mil is result of an inheritance, maybe proceeds from a lawsuit. Lottery jackpot?

Ergo, the OP is new to the game, inexperienced, unsure of how to invest.

Gill
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Gill » Sat Nov 16, 2019 6:56 pm

drawpoker wrote:
Sat Nov 16, 2019 6:41 pm
capran wrote:
Sat Nov 16, 2019 6:14 pm
....curious, if you arrived at 5 mil investable assets with the help of an advisor, or on your own? And are you not happy with where you are now, and doing what you have been doing?
I hope the OP returns to answer that. I may be wrong, but my hunch is that most of that $5mil is result of an inheritance, maybe proceeds from a lawsuit. Lottery jackpot?

Ergo, the OP is new to the game, inexperienced, unsure of how to invest.
Looks like you’re wrong. Based on earlier posts by OP, he appears to be a 70 year old professional who earned it all.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

tibbitts
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Re: Is this a fair price for a wealth manager financial advisor?

Post by tibbitts » Sat Nov 16, 2019 7:14 pm

retiredjg wrote:
Sat Nov 16, 2019 6:37 pm
tibbitts wrote:
Sat Nov 16, 2019 6:35 pm
I don't think it's high but I know it's not fee-only if they charge AUM.
I believe that the term "fee only" includes a service that charges an AUM fee.

If that is so, and I think it is, this "fee only" terminology is full of misunderstandings.
You're absolutely right, somehow I was confused because normally I've seen either an hourly or fixed fee OR an AUM not both.

drawpoker
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Re: Is this a fair price for a wealth manager financial advisor?

Post by drawpoker » Sat Nov 16, 2019 7:21 pm

Gill wrote:
Sat Nov 16, 2019 6:56 pm
..................Based on earlier posts by OP, he appears to be a 70 year old professional who earned it all.
Well, if you are culling through earlier posts, aren't you overlooking the sale of his lake house? :wink:

Gill
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Gill » Sat Nov 16, 2019 7:33 pm

drawpoker wrote:
Sat Nov 16, 2019 7:21 pm
Gill wrote:
Sat Nov 16, 2019 6:56 pm
..................Based on earlier posts by OP, he appears to be a 70 year old professional who earned it all.
Well, if you are culling through earlier posts, aren't you overlooking the sale of his lake house? :wink:
Missed that.😀
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

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CAsage
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Re: Is this a fair price for a wealth manager financial advisor?

Post by CAsage » Sat Nov 16, 2019 8:01 pm

Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple.
I wonder, generally, what would be so complex? Warren Buffett seems to think his heirs should use index funds. You might get better advice both from this forum and your paid advisers if you could narrow down exactly what problem you think needs solving. Maybe a focused lawyer or CPA might be better....
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

inbox788
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Re: Is this a fair price for a wealth manager financial advisor?

Post by inbox788 » Sat Nov 16, 2019 8:36 pm

Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.
That's expensive. Plus, chances are you're going to pay more fees for whatever funds they put you in and when they underperform, you won't gain as much. That's a triple loss in my book. What do they do that's "wealth manager" that other investment houses don't do? Financial planning? Retirement planning? Tax planning? Estate planning? Gift planning? And are all those services included in the fee?

Vanguard PAS charges less up to 5M and I would expect better performance after fees.
ttps://investor.vanguard.com/financial-advisor/financial-advice
Gill wrote:
Sat Nov 16, 2019 6:56 pm
Looks like you’re wrong. Based on earlier posts by OP, he appears to be a 70 year old professional who earned it all.
OP, what's your continuity plan?

Topic Author
Ykcor
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Ykcor » Sat Nov 16, 2019 8:53 pm

inbox788 wrote:
Sat Nov 16, 2019 8:36 pm
[quote=Ykcor post_id=4843606 time=<a href="tel:1573944315">1573944315</a> user_id=142154]
Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.
That's expensive. Plus, chances are you're going to pay more fees for whatever funds they put you in and when they underperform, you won't gain as much. That's a triple loss in my book. What do they do that's "wealth manager" that other investment houses don't do? Financial planning? Retirement planning? Tax planning? Estate planning? Gift planning? And are all those services included in the fee?

Vanguard PAS charges less up to 5M and I would expect better performance after fees.
ttps://investor.vanguard.com/financial-advisor/financial-advice
Thanks, but until I retire and roll over my Profit Sharing Plan to an IRA, I cannot use the Vanguard PAS or the Schwab program.
[quote=Gill post_id=4843699 time=<a href="tel:1573948576">1573948576</a> user_id=865]Looks like you’re wrong. Based on earlier posts by OP, he appears to be a 70 year old professional who earned it all.[/quote]
OP, what's your continuity plan?
[/quote]
capran wrote:
Sat Nov 16, 2019 6:14 pm
I am curious, if you arrived at 5 mil investable assets with the help of an advisor, or on your own? And are you not happy with where you are now, and doing what you have been doing? If you joined this site in 2018, seems like you have read quite a bit. What does Vanguard say? We're less that half that and it seems like we are always getting e mails from Vanguard Flagship Services.
Look, I'm 70'years old (still working because I want to). Have a wife who has no interest in financial manners. I've never had a paid financial advisor, though Charles Schwab did give guidelines for my profit sharing plan until some new law was passed by Congress (Erisa, I think). Now I have a plethora of stocks, bonds mutual funds and money mkt with a large cash component. I need someone in the fiduciary fee only category to sort things out and be available if I die or develop dementia to help DW. Sad to say I've burned out on following the markets and reading Barron's and the likes of Wall Street Journal. Looks like I probably need a wealth manager with a holistic approach. Of course I am a little hesitant to let some stranger have complete control. Also, dang sure I'm not going to pay a 1% AUM that most financial advisors want.

Topic Author
Ykcor
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Ykcor » Sat Nov 16, 2019 9:03 pm

HEDGEFUNDIE wrote:
Sat Nov 16, 2019 5:49 pm
What exactly do you get for the $15k?
They were on the recommended White Coat Investor list And yes I know that these groups pay to be on the list but I did have an introductory phone call with one of the advisors. Basically they are wealth managers with a conservative "preservation of capital" approach; which I like. Also one of the few in my state within easy driving distance from my home.

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Ykcor
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Ykcor » Sat Nov 16, 2019 9:10 pm

Trader Joe wrote:
Sat Nov 16, 2019 5:51 pm
Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.
Is there a reason why you cannot follow the recommendations provided on this site, so that you can do it yourself?

We are in no way investment experts, but we are never in need of a "Wealth Manager Financial Advisor" and their associated costs/fees.

We do everything ourselves, in large part to this site.
It would take two pages and an hour of typing and generate a lot of "What the h*** were you thinking buying this" responses...but I might try as soon as I get time.

GoFish
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Re: Is this a fair price for a wealth manager financial advisor?

Post by GoFish » Sat Nov 16, 2019 9:20 pm

Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.
Works out to 0.3%. I’d be (pleasantly) surprised if they will come down.

The important questions are do you trust them to do a good job, or is there someone else you think is better? The cost is almost irrelevant in your situation.

If it lets you sleep at night knowing your wife is in good hands when you cannot continue to manage your investments, then 0.3% is a bargain, IMO.

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Toons
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Toons » Sat Nov 16, 2019 9:25 pm

If they won't accept your offer
Move On

:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

JOEVANDAL
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Re: Is this a fair price for a wealth manager financial advisor?

Post by JOEVANDAL » Sat Nov 16, 2019 9:31 pm

Hire an advisor that charges by the hour if you want help. You can get a lot of hours and still stay below $10-15k.

inbox788
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Re: Is this a fair price for a wealth manager financial advisor?

Post by inbox788 » Sat Nov 16, 2019 9:41 pm

Ykcor wrote:
Sat Nov 16, 2019 8:53 pm
Look, I'm 70'years old (still working because I want to). Have a wife who has no interest in financial manners. I've never had a paid financial advisor, though Charles Schwab did give guidelines for my profit sharing plan until some new law was passed by Congress (Erisa, I think). Now I have a plethora of stocks, bonds mutual funds and money mkt with a large cash component. I need someone in the fiduciary fee only category to sort things out and be available if I die or develop dementia to help DW. Sad to say I've burned out on following the markets and reading Barron's and the likes of Wall Street Journal. Looks like I probably need a wealth manager with a holistic approach. Of course I am a little hesitant to let some stranger have complete control. Also, dang sure I'm not going to pay a 1% AUM that most financial advisors want.
LOL. I was under the impression the advisor was 70 and asking what you'd after he quit. But continuity is always an important, often unplanned and ill-prepared. I'd be open to paying these fees to a well recommended solo advisor with only a few clients and provided other valuable services on an ongoing basis (i.e. coordinating with brokerage, CPA, lawyer, etc.) beyond investment advice and financial planning.

Anyway, investing is easy, and you don't need to follow markets or ready any rags. The whole idea is that with low cost passive index investing in the total market is that the strategy often beats half the other guys who are paying higher fees, and those fees are a constant drag to their performance. Also, you are probably looking more for a financial planner more than an investment advisor, but finding a good trustworthy one is challenging. I'm guessing anyone who wears the title wealth manager charges a higher fee whether they provide good comprehensive services or offers a good value proposition.

https://www.bogleheads.org/wiki/Financial_planner

Don't recall where I came across this site (might have been here or from one of the written articles). You might look at some of the articles or their services and how they compare (they're high, but I assume comparable to big bank wealth management).
https://www.marottaonmoney.com/service-levels/

NewMoneyMustBeSmart
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Re: Is this a fair price for a wealth manager financial advisor?

Post by NewMoneyMustBeSmart » Sat Nov 16, 2019 11:57 pm

Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.
0.1% AUM is not 'fee only.' Ensure they are RIA else don't use them. 0.1% is a very low rate for an RIA. 0.5% is general rate for ~$20M; I know of many RIAs that charge 1% up to $2M, and get down to 0.5% above $5M - many different schedules out there.

Your strategy of wanting a copilot for a few years is reasonable, although you probably could do it yourself, in my case, I am happy to pay for the counsel.

I will be shocked if they accept your offer of $5k and 0.1% AUM. If they did accept it I'd question why they're so much lower than market.

cameljockey
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Re: Is this a fair price for a wealth manager financial advisor?

Post by cameljockey » Sun Nov 17, 2019 2:58 am

Prior to my becoming self-educated on fairly basic 3 and 4 fund portfolios, I had met with a "financial advisor" who had relatively low fees for AUM. His plan was to put a lot of my money in high-cost hedge funds an oddball oil stocks, not to mention shorting the market. So while the AUM fee was relatively low, he'd be getting a significant portion of my money for the costs of the hedge funds and making money elsewhere. I decided not to use him nor anyone else.

So if for some reason you are set on using a financial advisor, bear in mind they have a lot more ways to get your money than just the AUM fee.

If you really have some sort of complex situation, with that much in assets Fidelity or Schwab will give you a dedicated advisor at no cost.

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nedsaid
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Re: Is this a fair price for a wealth manager financial advisor?

Post by nedsaid » Sun Nov 17, 2019 9:28 am

Ykcor wrote:
Sat Nov 16, 2019 8:53 pm


Look, I'm 70'years old (still working because I want to). Have a wife who has no interest in financial manners. I've never had a paid financial advisor, though Charles Schwab did give guidelines for my profit sharing plan until some new law was passed by Congress (Erisa, I think). Now I have a plethora of stocks, bonds mutual funds and money mkt with a large cash component. I need someone in the fiduciary fee only category to sort things out and be available if I die or develop dementia to help DW. Sad to say I've burned out on following the markets and reading Barron's and the likes of Wall Street Journal. Looks like I probably need a wealth manager with a holistic approach. Of course I am a little hesitant to let some stranger have complete control. Also, dang sure I'm not going to pay a 1% AUM that most financial advisors want.
I think you are on the right track seeking a lower cost advisory firm to manage your assets. My parents are still living, they don't have dementia but I have noticed that they get anxious when trying to deal with more complex situations. Sort of a sound mind in a sound body sort of thing, when you have less and less energy, the old noggin gets tired just like the body. It is something that we all face, the prospect of getting old, and something about which most of us are in denial. We should all be making plans do deal with this. I also have in recent years seen a pretty blatant case of elder abuse. Better to prepare while the brain and body have the energy to think these things through.
A fool and his money are good for business.

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Re: Is this a fair price for a wealth manager financial advisor?

Post by Dottie57 » Sun Nov 17, 2019 9:39 am

Hi OP,

If you are worried about your spouse (continuity), wouldn’t it be a decent idea to put your money into an all in one fund?

Something like Vanguard life strategy funds, balanced funds? I have thoughts about doing this in my 70’s if managing becomes a burden.

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Stinky
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Stinky » Sun Nov 17, 2019 9:39 am

Ykcor wrote:
Sat Nov 16, 2019 8:53 pm

Look, I'm 70'years old (still working because I want to). Have a wife who has no interest in financial manners. I've never had a paid financial advisor, though Charles Schwab did give guidelines for my profit sharing plan until some new law was passed by Congress (Erisa, I think). Now I have a plethora of stocks, bonds mutual funds and money mkt with a large cash component. I need someone in the fiduciary fee only category to sort things out and be available if I die or develop dementia to help DW. Sad to say I've burned out on following the markets and reading Barron's and the likes of Wall Street Journal. Looks like I probably need a wealth manager with a holistic approach. Of course I am a little hesitant to let some stranger have complete control. Also, dang sure I'm not going to pay a 1% AUM that most financial advisors want.
An approach might be to use someone for a "financial tune-up", to deal with your "plethora of stocks, bonds, mutual funds, and money market with a large cash component", on a short- to medium-term basis. It sounds you need a plan, and might need some help getting the plan off the ground.

Maybe the advisor you're interviewing will fit the bill for you. Could you retain that advisor for a year or two to get things sorted out, and then plan to move away from that advisor to a lower-cost advisor? It sounds like you don't need long-term help at the fee level you're talking about here, because you've managed your investments yourself to date.

Or maybe there's another advisor who could deliver the same type of services, for a little lower cost.

I understand your desire for some short-term help. But maybe you can take over steering the ship once the ship is put onto the proper course.
It's a GREAT day to be alive - Travis Tritt

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Re: Is this a fair price for a wealth manager financial advisor?

Post by Katietsu » Sun Nov 17, 2019 10:03 am

If I understand the complexity of your portfolio, the potential tax consequences and the likely transitions looming in your future, the price you were quoted seems reasonable. You might have some room to bargain, I don’t know. But if I were a financial planner and you proposed $5000 for the initial plan and 0.1% thereafter, I would just kindly tell you that you were not an appropriate client for my services. Again, I am basing this on trying to read between the lines as to the complexity of the situation.

Did you consider the other option using one of the planners who would do your initial plan and implementation on an hourly fee and be available for on an hourly basis for future updates or to help your wife transition to full service? You would need to watch over it on a day to day basis. I am not sure which would actually less expensive since it sounds like you might require a fair amount of time.

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Re: Is this a fair price for a wealth manager financial advisor?

Post by Bmac » Sun Nov 17, 2019 10:13 am

As a counterpoint to most of the above responses, in truth $15k per annum is on the low end of fees for boutique wealth management. It’s in the ballpark of fees charged by all the other curated financial advisors on the WCI site. Whether or not the advice and management obtained for that is worth it is a separate issue. But those fees for managing $5M are hardly an outlier.

tibbitts
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Re: Is this a fair price for a wealth manager financial advisor?

Post by tibbitts » Sun Nov 17, 2019 10:17 am

CAsage wrote:
Sat Nov 16, 2019 8:01 pm
Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple.
I wonder, generally, what would be so complex? Warren Buffett seems to think his heirs should use index funds. You might get better advice both from this forum and your paid advisers if you could narrow down exactly what problem you think needs solving. Maybe a focused lawyer or CPA might be better....
We see a lot of these Buffett references, but how is Buffett handling taxes vs. what the OP is or isn't doing now? I guess I've only read about Buffett's instructions in terms of asset allocation and not mechanically how it's going to be executed.

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Ykcor
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Ykcor » Sun Nov 17, 2019 10:49 am

cameljockey wrote:
Sun Nov 17, 2019 2:58 am
Prior to my becoming self-educated on fairly basic 3 and 4 fund portfolios, I had met with a "financial advisor" who had relatively low fees for AUM. His plan was to put a lot of my money in high-cost hedge funds an oddball oil stocks, not to mention shorting the market. So while the AUM fee was relatively low, he'd be getting a significant portion of my money for the costs of the hedge funds and making money elsewhere. I decided not to use him nor anyone else.

So if for some reason you are set on using a financial advisor, bear in mind they have a lot more ways to get your money than just the AUM fee.

If you really have some sort of complex situation, with that much in assets Fidelity or Schwab will give you a dedicated advisor at no cost.
Not until I roll over my profit sharing plan plan to an IRA

NotWhoYouThink
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Re: Is this a fair price for a wealth manager financial advisor?

Post by NotWhoYouThink » Sun Nov 17, 2019 10:56 am

NewMoneyMustBeSmart wrote:
Sat Nov 16, 2019 11:57 pm
Ykcor wrote:
Sat Nov 16, 2019 5:45 pm
Scheduled to meet with a fee only financial advisor next week. Their group's fee is 10k per year plus 0.1% AUM. On investable assets of almost $5 million would be close to $15,000 per year. This seems high to me. What would be fair? I know you guys will say do it yourself using a three fund portfolio but my situation is not that simple. I'm thinking that telling them $5k first year for initial set up then only 0.1% AUM thereafter.
0.1% AUM is not 'fee only.' Ensure they are RIA else don't use them. 0.1% is a very low rate for an RIA. 0.5% is general rate for ~$20M; I know of many RIAs that charge 1% up to $2M, and get down to 0.5% above $5M - many different schedules out there.

Your strategy of wanting a copilot for a few years is reasonable, although you probably could do it yourself, in my case, I am happy to pay for the counsel.

I will be shocked if they accept your offer of $5k and 0.1% AUM. If they did accept it I'd question why they're so much lower than market.
Maybe the wiki needs something to link to regarding the term "fee only." Because someone who charges an Assets Under Management (AUM) FEE but does not charge commissions on transactions is "Fee only".

There are other advisors who charge hourly fees only but do not manage assets. "Advice only".

I am not aware of any that offer hourly advice and also manage assets but do not charge fees, commissions, 12-b or other payments to manage the assets. I can't see how that business model would work.

But somehow on the board the concept of "advice only" and "fee only" have gotten conflated, which leads to people talking to financial professionals, sharks, and charlatans in the real world and getting confused because they think "fee only" is safe.

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Re: Is this a fair price for a wealth manager financial advisor?

Post by dbr » Sun Nov 17, 2019 11:26 am

0.3% is not egregious. Vanguard PAS charges that. It is not clear to me what service is actually delivered for this price. In my opinion VPAS is expensive for what they do, but this firm may do more. Also missing is what investments one end up in. They could market higher cost funds and any variety of expensive "deals" or they could put their investors in very low cost diversified funds.

What exactly are you buying for $10,000 + .1%. Also, how much of that service is one time planning that should not be paid for year after year. With Vanguard VPAS some investors might benefit from one year service and then drop it. How easy will it be to extract your assets from this firm. Where is the custody. Do they have authority to trade.

It is legitimate to be concerned about how assets will be managed after your demise. It is also possible for someone in charge of your assets after you die to take advantage of your survivors.

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Re: Is this a fair price for a wealth manager financial advisor?

Post by aristotelian » Sun Nov 17, 2019 11:56 am

Planvisionmn.com does $100/year. You might try that first and see if it is good enough for your spouse.

If you already have funds at Schwab, they are rolling out a discount advisory service for $300 + $30/month. (There is a hidden cost in that they require a cash allocation that will earn less than market rate).

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Re: Is this a fair price for a wealth manager financial advisor?

Post by themuse » Sun Nov 17, 2019 12:36 pm

Rick Ferri and others on BH offer hourly consulting. They will manage the clean up, set up of your portfolio and will also have discussions and negotiations with advisory firms etc. At least based on what I heard in some BH/WCI podcasts. Might be a good option if you want to do that. You should have peace of mind knowing that they will be working on your behalf, and you will not get hosed.
--themuse-- | | Investing should be boring

scooter
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Re: Is this a fair price for a wealth manager financial advisor?

Post by scooter » Mon Nov 18, 2019 10:51 am

Maybe you should hire Taylor and Mel as a team from this site if they are willing.

They have helped many of us thru the years

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Re: Is this a fair price for a wealth manager financial advisor?

Post by deltaneutral83 » Mon Nov 18, 2019 11:52 am

Pretty sure you can get cream of the crop investing/tax advice for $400 an hour from a fee only guy who is a CPA. The tax side of things I'm going to guess will be the complicated part, not the investing. Highly doubt these hourly guys would need more than 20 hours to wrap their heads around OP situation upon initial meeting. Then after that, maybe a few hours a year if changes are made. $15k (and up) a year is unnecessary unless you want to make the adviser's Tesla payment.
Rick Ferri and others on BH offer hourly consulting. They will manage the clean up, set up of your portfolio and will also have discussions and negotiations with advisory firms etc. At least based on what I heard in some BH/WCI podcasts. Might be a good option if you want to do that. You should have peace of mind knowing that they will be working on your behalf, and you will not get hosed.
ETA - Yes, this.

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Re: Is this a fair price for a wealth manager financial advisor?

Post by Mel Lindauer » Mon Nov 18, 2019 11:57 am

themuse wrote:
Sun Nov 17, 2019 12:36 pm
Rick Ferri and others on BH offer hourly consulting. They will manage the clean up, set up of your portfolio and will also have discussions and negotiations with advisory firms etc. At least based on what I heard in some BH/WCI podcasts. Might be a good option if you want to do that. You should have peace of mind knowing that they will be working on your behalf, and you will not get hosed.
Excellent suggestion. I responded with a similar suggestion (buying a few hours of Rick Ferri or Allan Roth's time) that somehow got lost.

The gremlins are at work again!
Best Regards - Mel | | Semper Fi

remomnyc
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Re: Is this a fair price for a wealth manager financial advisor?

Post by remomnyc » Mon Nov 18, 2019 1:04 pm

+1 for hiring Allan Roth to do a personal investment review. He is a true fee only advisor and will look at insurance, taxation, social security, as well as portfolio issues. He will advise and then let you execute and keep your AUM fee.

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Mel Lindauer
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Re: Is this a fair price for a wealth manager financial advisor?

Post by Mel Lindauer » Mon Nov 18, 2019 6:41 pm

remomnyc wrote:
Mon Nov 18, 2019 1:04 pm
+1 for hiring Allan Roth to do a personal investment review. He is a true fee only advisor and will look at insurance, taxation, social security, as well as portfolio issues. He will advise and then let you execute and keep your AUM fee.
I should have mentioned that in addition to being a CFP and MBA, Allan is also a CPA.

However, I understand that because he's so popular, he's not able to handle new clients for a while. Check with Allan to confirm, though.
Best Regards - Mel | | Semper Fi

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