Reasonable Fee Rate for Assets Under Management

[Anonymous]

I am paying 0.75 for having over 2 million. I don’t know how much more I need for a further reduction, but it sounds like you’re getting a good deal.

[Anonymous]

Bogleheads would be a better place to ask at that net worth.

[Anonymous]

Anonymous wrote:Bogleheads would be a better place to ask at that net worth.

They’ll just say “don’t pay for AUM do it yourself bro”.

[Anonymous]

We had deep dive interviews with Bernstein and then less so with Edelman about 8 years ago. We were 5M at the time. Bernstein was 1%. Edelman was minimum of 1% + assorted other things. We didn't go with either.

What is your ROI on the 2M? How much of your increase is due to additional monies invested? Is your person's ROI better than what you're getting with the 401K you're considering bringing over?

I would just ask your person what he can do % wise if you bring over the 401K. .5 is very good, provided you are paying other fees on individual investments the person has you in.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Bogleheads would be a better place to ask at that net worth.

They’ll just say “don’t pay for AUM do it yourself bro”.

Exactly.

[Anonymous]

I would really like to know what kind of ROI you are getting.

[Anonymous]

We rejected a financial advisor our family uses. IT was a $10K Minimum and 1%. It was for managing a $1M account, but it was a 10 year declinung RMD Inherited IRA. I was fine with 1%, not $10K minimum. Our overall wealth is $17M. Yes, I'm cheap, but have done well on W2 income for 30+ years.

[Anonymous]

Anonymous wrote:I would really like to know what kind of ROI you are getting.

Negative

[Anonymous]

Anonymous wrote:We've been working with an advisor for about 5 years. During that time, our portfolio has grown from $2M to $5.2M due to performance and some additional investments made from our money market account.

At what point should we expect a rate adjustment based on investments? We are currently paying .5%. Please, I am not looking for advice on whether or not to use an advisor...just whether a rate adjustment is warranted, or if we are already paying a reasonable rate for that level of assets under management.

Thank you in advance.

This is a good rate. You might get a better rate by switching to vanguard, fidelity or Schwab but you won’t get all the services you are getting now.

I believe Vanguard publishes their rate on the high net worth section of their website. You would need to call Fidelity and Schwab to get their rates.

[Anonymous]

You are all idiots. What you pay does not correlate to value.

The OP said they are getting the following:

Retirement planning
Tax planning
Holistic management of portfolio considering other assets not under his management (401K, deferred comp, money market)
Assistance with estate planning
Miscellaneous

These are generic terms and mean nothing. Exactly what services are you getting for your money?

Retirement planning
1.
2.
3.
4.
5.
6.
7.
8.

Tax planning
1.
2.
3.
4.
5.
6.
7.
8.

[Anonymous]

Anonymous wrote:You are all idiots. What you pay does not correlate to value.

The OP said they are getting the following:

Retirement planning
Tax planning
Holistic management of portfolio considering other assets not under his management (401K, deferred comp, money market)
Assistance with estate planning
Miscellaneous

These are generic terms and mean nothing. Exactly what services are you getting for your money?

Retirement planning
1. Modeling cash flow and projected growth based on current situation
2. Planning Social security payments and when to start
3. Roth conversion strategy
4. RMD strategy
5. Help with allocation of funds in other accounts (deferred comp and 401K)
6. CPA is in the firm so good coordination for tax planning
7.
8.

Tax planning
1. See above 👆
2.
3.
4.
5.
6.
7.
8.

[Anonymous]

All-in with a fee only advisor should be 2-3k and maybe a little extra for ongoing CPA advice.

[Anonymous]

Anonymous wrote:All-in with a fee only advisor should be 2-3k and maybe a little extra for ongoing CPA advice.

Have any recs? The ones I spoke with in the DC area wanted a minimum $10K/year retainer

[Anonymous]

Anonymous wrote:.5% is very very competitive for an AUM under 10 Million; to the point where I would be looking at the fees for the products they have you in with a fine tooth comb.

I wouldn't expect any fee decreases without bringing 2-3x more to the table. Even then I'm going to be looking at how long we have been working together and how easy/hard you are to work with. Keep in mind I'm getting ~.3% for $50+ Million from institutional investor that I have to do zero for outside of send statements and tax documents yearly.

And this post describes exactly why I don't use a financial advisor. $150K+ that this PP does "zero for". What a racket if you can get it. And I guarantee I have better returns than this person doing all of this myself. And using AI with specific knowledgeable prompts can provide the other services.

On that note, 0.5% is about average for the FA industry for those amount assets. But seriously consider doing it yourself. You're getting ripped off.

[Anonymous]

Anonymous wrote:Why would you give this advisor your 401k to manage? That doesn't make sense to me. Isn't it managed by whoever manages the 401k?

I agree. This doesn't make sense. The OP posts come across as a brag. Do you really need to pay someone to decide which low cost S&P 500 index you need to put your 401K contributions into? 96% of FAs can't beat the S&P 500 over the long run and none can beat it consistently unless you are Bernie Madoff.