Do you have a financial planner if your HHI is $250-300K, and, if so, why or why not?
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Anonymous
| We dont have the time to do the analysis that is need to maintain our portfolio. Our Financial planner will look at our investments across all investment types (personal, 401K, gov retirement, etc) , and make sure the mix is apprpiriate across all of them. So we aren't looking at them individually. He also helps us to rebalance when needed. We also know if we are overinvested in certain companies by looking at the mix of companies in each mutual fund. We have financial goals that we review each year to see if we are meeting. There is no way I have the time to do this. |
Anonymous
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My brother is a financial planner. When I was in my early 30s and had a husband but no children yet, he sat down with me and had me fill out a questionnaire or financial goal of sorts. It really helped to show me what expenses we'd have coming down the road - things we hadn't thought of. Did we plan on having children? How many? Would one of us take off work? For how long? What large expenses are involved with children that we'd pay for such as braces, childcare, college, etc. What age did we expect to retire? Would we move out of DC to a cheaper COL area?
I think he does this with his clients and they update it every so often. Of course, not everything goes according to plan, but it's easier to make adjustments when you have the big, ideal picture laid out. I hadn't even thought of saving for braces, but they are expensive! We didn't even discuss where to invest money we'd be saving - more what we would be saving for and how much we'd need to save. This is obviously something you can do yourself. It's really financial planning/goal setting. Once that is done, you can do the next step which is where to invest/how much risk to undertake, etc. I think as long as you are fairly knowledgeable about personal finance (and it sounds like you are) and what's available, such as 401k, IRAs, 529 plans, life insurance, you can do fine without a financial planner. |
Anonymous
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"I think they are good for people who inherit money. People who are intelligent enough to accumulate substantial sums can usually handle it themselves - websites like bogleheads are very helpful for some strategies like tax loss harvesting. I think the main role of advisers is to enrich themselves."
I agree with this. Getting and dealing with a lump sum is different from accrual over time. I think if you read enough over time, you can set and refine sensible goals and a good path to get to them. Like right now, I know that I will have to decide on long-term care insurance before I turn 50 (in my early 40s, so I have time) and that I'll have to learn more about bond funds (especially muni-bonds) and think about tax strategies as my savings that is outside of retirement/529s accrues. |
Anonymous
| Oh, and before anyone beats me up, I meant to type muni-bonds as well as bond funds, not bond funds that contain muni-bonds . . . . |
Anonymous
| We have used on in the past but not currently. It can be helpful to meet with someone to get a sense of what they would recommend -- some will do a plan for a fixed fee. Whether you want someone to manage your money really depends on how comfortable you are doing it yourself and whether you have the time to do it. With this kind of money to invest, it is going to be choosing among mutual funds for the most part, and there is a ton of readily available information on mutual funds. You can also figure out relatively easily how you should distribute your portfolio for age-based risk. When you have a lot of money to invest, an advisor can come in handy because they can do more things with the money but at this level, most advisors would be pretty conservative. Last time I met with one, it was clear that the chances his advice would cover his fees was low and I do not mind doing it myself. |
Anonymous
| It depends heavily on the advisor and your income. North of $1M investible assets and/or 250k income you can start doing private equity, etc. Some of the trades ours makes are not replicable by a non institutional investor, particularly the illiquid ones. |
Anonymous
Does your financial planner do volunteer work for you? |
Anonymous
I totally agree with this PP. We met with a financial planner when our income was around that in the subject line. My husband is a litigator who travels constantly, and I run my own business when I'm not in charge of two kids, one with special needs. We do not have time for this stuff, so we chose to delegate it to an expert. The one percent is well worth it in our estimation. |
Anonymous
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I don't think it could hurt. I make way less money than you and met with a financial advisor through Northwestern Mutual, where I have disability and life insurance. They did it for free. It was helpful because they have some fancy software that projects your financial situation if you do what you're doing now or if you do XYZ. They also calculate inflation and complicated things like that, and I wouldn't even know where to begin. You don't know what you don't know. An outside opinion could open your eyes to any blind spots you might have.
I also want to take this opportunity to recommend that anyone with an income and dependents gets disability insurance. When my relative became disabled and unable to work, he now has income until he turns 65. Otherwise, his family would have been SOL with no one else able to earn any income. |
Anonymous
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Once we crossed $200 million in assets we hired one. Before that it seemed like waste of money.
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Anonymous
I agree, especially if you have $50 million tied up in real estate, between all the houses. But I always get confused-- do you include the G5 in net worth? Things get so complicated now. |
Anonymous
1% annual fee on your whole portfolio means around 20-35% of the profits you will ever make. You give that away in order to get third-class and probably biased advice - your husband and you would probably make equally good if not better decisions if you just spent 10-20 hours per year. Very interesting estimation you're making. |
Anonymous
Or they might, like most retail investors, sell when the market crashes and buy back in when it's high. It's really not so simple as there are emotions and spouses.... |
Anonymous
| I have one and I only make $100,000.00. |
Anonymous
| Oooh, can I be the adviser for the $200 mil portfolio? At 1 percent, that's $2 mil a year for me. Sweet! |