Last year I sold a portion of my shares for about $6.5M. In the meantime, two other things happened that I didn't anticipate:
- My company granted me a significant amount of additional shares
- The share's value increased dramatically
Now, I don't plan on selling the rest of my shares in the short term (definitely not this year at least), but it'll happen at some point, and I want to be prepared.
I'm currently managing some of my funds at Schwab and Vanguard, while Morgan Stanley manage the rest. As I'm starting to think about estate planning, I'd like to consolidate my portfolio in just one place in order to avoid overwhelming my heirs with multiple brokerage accounts and investment strategies. Vanguard would be my favorite option, but I'm a little bit worried about the DIY approach with this level of funds (anecdotally, one comment I saw yesterday in another post was discouraging someone to go the DIY route with a smaller portfolio than mine).
I'd like to understand what's radically different between managing $30k and $30M in typical Bogleheads fashion. I realize I need to find an estate planning lawyer (I should already do that actually), and work with a good tax advisor (I already have one) but, aside from that, is there really something that would prevent me from managing the funds by myself at Vanguard? It'd presumably save me around $300,000 per year in fees so, I'm sure you understand I'd prefer to avoid Morgan Stanley.
I tend to think that I know what I'm doing and that I have a pretty good understanding of asset allocation, tax efficiency, etc. but Morgan Stanley do a good job at convincing me about the opposite. Here's for example the portfolio I'd do if I was consolidating all my funds at Vanguard:
- 15% Tax-Managed Capital Appreciation Fund (VTCLX)
- 5% Tax-Managed Small-Cap Fund (VTMSX)
- 10% Developed Markets Index Fund (VTMGX)
- 20% Intermediate-Term Tax-Exempt Fund (VWIUX)
- 15% California Intermediate-Term Tax-Exempt Fund (VCADX)
- 20% Intermediate-Term Treasury Index Fund (VSIGX)
- 15% Short-Term Inflation-Protected Securities Index Fund (VTAPX)
- This asset allocation is inspired by the All Weather Portfolio, although I replaced the gold and commodities by short-term TIPS.
- I don’t invest in emerging markets on purpose. This is a personal preference.
- I tilt slightly to small caps because I believe there's potential for a higher risk-adjusted return.
- I realize the 35% treasury bonds aren’t particularly tax efficient, but I’m not comfortable holding more muni bonds (I follow Bernstein's recommendation to have a maximum of 50% of the bond portfolio in munis). Since treasuries are exempt from state taxes, they look acceptable to me given the safety they provide.
- Speaking of treasuries, I hesitated between VFIUX and VSIGX as they look very similar, but ended up going for the latter as I assumed it could be slightly more tax efficient.
- Does this allocation look reasonable, and do you think I'm capable of managing ~$30M by myself?
- Is there really anything else than proper estate planning that I should be doing?