Am I overpaying my financial advisor?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Look up the exact title of the funds he has invested in and see what their load fees and expenses are.

Here is an example of the basic Vanguard federal money market fund:

https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx#performance-fees

Scroll down to where it says "Expense Ratio" and "Fund-Specific Fees"

The Vanguard money market fund:

"VMFXX 0.11%

Average expense ratio of similar funds — (nothing listed as comparable)

Fund-specific fees

Purchase fee None

Fund family redemption fee None

12b-1 fee None"

For your first fund listed earlier (CMNIX)- Class A shares:

"Gross expense ratio: 1.22%
Maximum Sales Charge: 2.75%"

Thank you and PP for explaining! I’ll check tomorrow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our FA is also our CPA. We are paying him .5% annually to manage just under $3M. We have a other assets in other funds (401K, Deferred Comp, Company Stock, Stock Options, 529, donor advised fund, etc.) which he doesn't manage, but still gives advice on allocations and other issues that would have tax implications. Our total investments, including the assets he manages, are about $12M.

He also helped us update our estate plan and made sure we are insured appropriately.

We like the convenience of having a CPA who understands our tax situation manage our funds and advise us on our other funds. My husband is also approaching retirement, so it has been reassuring having someone who can help us plan, which will be in about a year.

+1

Our FA is not our CPA, but they work closely with our CPA and our Estate Planner and everyone involved in our Wealth management team. They are the "glue that holds it all together". Sure I could pay less and manage it myself. But it's nice to just call/email/text and have them manage it for me. That is what you get for your 0.5% for everything they manage (for us it's $~10M). They also advise on our 529, 401K and everything financial even if they are not collecting a fee on that portion. They handle all of our treasury/CD/short term investments with out any fees (that is much more than $10M). Making sure it's all in best options for highest return when they come due. Also follows up when some has been in CDs at banks that have gone under (there have been a few in last 2 years----that happens when you spread it all out to keep FDIC insurance). That means I don't have to have accounts at 20+ banks to manage myself. That part all comes at "no fee" to us. Sure paying $25K+ per year may seem like a lot for most people, but when you are at HNW/UHNW it's just a part of managing your finances. And a great FA makes it all run smoothly. I know, because I used to manage our CD/Treasuries/MM previously and am very happy I don't have to do it anymore.

Thanks for sharing this. You mentioned you were paying approximately $25K in fees for $10M, so is your rate .25%? And do you feel for $3M in assets that .5% is a good rate?

I think that is a good rate for $3M. Especially if they do not charge a fee for your "cash" holdings (Treasuries/CD/MM/etc) or your 529s. And are very responsive to your needs.

We have been with our FA for 20+ years. So since we were only worth $1-2M. We chose to stay with them because we trust them. Even when we made the quick switch to UHNW 3 years ago we stayed---because they showed us they could (and would ) manage everything for us, they had access to wealth management team that is amazing. At that level, most of the FA who want your business are slimy and pushy and I didn't want to work with any of them. We interviewed a few just to see and I couldn't' stomach it. They are just annoying and sleezy to me.

I like that we are most likely our FA top client, not just another UHNW/HNW family.

What in tarnation does a wealth management team do?

Help coordinate your CPA, estate planning, creating a foundation, etc. Not something most people need, but when you hit the UHNW ($30M+) there are many new issues that need to be addressed. We have an estate consultant (not our lawyer) who for no fee will spend hours helping us develop/tweak our estate plans, available for consultation as much as needed. There are also other experts on specific estate subjects/foundation creation/etc that we can consult with as needed. Then we take those ideas to our actual lawyer to draw them up. So basically, rather than paying $400+/hr to discuss complex estate planning (which at that level involves tax planning as well/ tax avoidance for when you die), we do that with him and others from the wealth management team to craft the plan, then just pay the lawyer for 4-5 hours of work. In the last 3 years, we have gotten 50+ hours of consultation for free and only had to pay the lawyer for less than 10 Hours. Given that the main person is actually a lawyer (but not working as a lawyer currently, so not allowed to officially give "legal advice") we are getting top notch consultation for free. It's part of our FA/Wealth management team that becomes available to you when you reach a certain level of wealth. Lots of perks become available at a certain wealth level. They want your business and quite frankly it's much easier to manage it all where everyone works for same company and has access to all your details.

So yes, if you have a net worth of only $2M your estate and wills are very simple. And a simple lawyer familiar with wills will be fine and you can use a good FA. But once you hit $10-15M you typically need more resources available for you.

I hate to break this to you, but you aren't getting any of these services for free.

[Anonymous]

Anonymous wrote:most anti financial advisor people on here probably think they are smarter than they are.

"Markets are going to crash this year."

"We are due for the big one."

"Biden or Trump will end the world."

They probably sell and buy at the worst times. A FAs job is not to try and get you on the cover of Forbes, it's too prevent YOU from making stupid mistakes. That cost is intangible and not necessarily quantifiable.

We happily pay our advisor because they keep up from being emotional with money. The $25k we pay them is a lot but I don't know how I would have reacted without them. For all I care, my assets are at all time highs. Win win.

A good advisor will admit this and provide a ton of other value add service offerings. A bad advisor tries to sell their "outperformance"

Nope, most anti-financial advisor people here know exactly how stupid we are. And how stupid financial advisors/salespeople are. Which is why we buy and hold the market, and rebalance once a year. If you need to pay someone $25 k to stop you being emotional with money, that might be money better spent on therapists.

[Anonymous]

Thanks to my FA, I can now afford to pay an FA and not even blink about it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:most anti financial advisor people on here probably think they are smarter than they are.

"Markets are going to crash this year."

"We are due for the big one."

"Biden or Trump will end the world."

They probably sell and buy at the worst times. A FAs job is not to try and get you on the cover of Forbes, it's too prevent YOU from making stupid mistakes. That cost is intangible and not necessarily quantifiable.

We happily pay our advisor because they keep up from being emotional with money. The $25k we pay them is a lot but I don't know how I would have reacted without them. For all I care, my assets are at all time highs. Win win.

A good advisor will admit this and provide a ton of other value add service offerings. A bad advisor tries to sell their "outperformance"

Nope, most anti-financial advisor people here know exactly how stupid we are. And how stupid financial advisors/salespeople are. Which is why we buy and hold the market, and rebalance once a year. If you need to pay someone $25 k to stop you being emotional with money, that might be money better spent on therapists.

A bit harsh!

I guess I am anti-advisor for myself, but some people are quite allergic to dealing with personal finance. I work around financial economists. One told me she sold all the stocks in her 401k in March 2020, and I don't think she needs a therapist.

I also monitor Bogleheads, the ultimate in DIY investors, and notice many of the older ones get advisors in case they die to provide an off ramp to their nonfinancially-interested spouse.

I have a sister who couldn't even tell me if she had a pension. When her ultra-frugal DH had a recent cancer scare, I learned that he had an FA and has told my sister to do whatever the FA advises should he die.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:most anti financial advisor people on here probably think they are smarter than they are.

"Markets are going to crash this year."

"We are due for the big one."

"Biden or Trump will end the world."

They probably sell and buy at the worst times. A FAs job is not to try and get you on the cover of Forbes, it's too prevent YOU from making stupid mistakes. That cost is intangible and not necessarily quantifiable.

We happily pay our advisor because they keep up from being emotional with money. The $25k we pay them is a lot but I don't know how I would have reacted without them. For all I care, my assets are at all time highs. Win win.

A good advisor will admit this and provide a ton of other value add service offerings. A bad advisor tries to sell their "outperformance"

Nope, most anti-financial advisor people here know exactly how stupid we are. And how stupid financial advisors/salespeople are. Which is why we buy and hold the market, and rebalance once a year. If you need to pay someone $25 k to stop you being emotional with money, that might be money better spent on therapists.

A bit harsh!

I guess I am anti-advisor for myself, but some people are quite allergic to dealing with personal finance. I work around financial economists. One told me she sold all the stocks in her 401k in March 2020, and I don't think she needs a therapist.

I also monitor Bogleheads, the ultimate in DIY investors, and notice many of the older ones get advisors in case they die to provide an off ramp to their nonfinancially-interested spouse.

I have a sister who couldn't even tell me if she had a pension. When her ultra-frugal DH had a recent cancer scare, I learned that he had an FA and has told my sister to do whatever the FA advises should he die.

The FA to protect/guide a spouse who has zero interest or willingness to engage in money management makes a lot of sense.

Also if you are the one in charge of everything money related, you should make a document that guides your spouse to all the accounts info in case you are killed/incapacitated.

[Anonymous]

We paid Lori Atwood 1k/ year ago for advice on how to manage about 4 million. She also gave us advice on managing our regular spending. It was worth it. She went through everything very carefully. She was kind of conservative with our retirement accounts and I may change the allocations. But she was great overall.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our FA is also our CPA. We are paying him .5% annually to manage just under $3M. We have a other assets in other funds (401K, Deferred Comp, Company Stock, Stock Options, 529, donor advised fund, etc.) which he doesn't manage, but still gives advice on allocations and other issues that would have tax implications. Our total investments, including the assets he manages, are about $12M.

He also helped us update our estate plan and made sure we are insured appropriately.

We like the convenience of having a CPA who understands our tax situation manage our funds and advise us on our other funds. My husband is also approaching retirement, so it has been reassuring having someone who can help us plan, which will be in about a year.

+1

Our FA is not our CPA, but they work closely with our CPA and our Estate Planner and everyone involved in our Wealth management team. They are the "glue that holds it all together". Sure I could pay less and manage it myself. But it's nice to just call/email/text and have them manage it for me. That is what you get for your 0.5% for everything they manage (for us it's $~10M). They also advise on our 529, 401K and everything financial even if they are not collecting a fee on that portion. They handle all of our treasury/CD/short term investments with out any fees (that is much more than $10M). Making sure it's all in best options for highest return when they come due. Also follows up when some has been in CDs at banks that have gone under (there have been a few in last 2 years----that happens when you spread it all out to keep FDIC insurance). That means I don't have to have accounts at 20+ banks to manage myself. That part all comes at "no fee" to us. Sure paying $25K+ per year may seem like a lot for most people, but when you are at HNW/UHNW it's just a part of managing your finances. And a great FA makes it all run smoothly. I know, because I used to manage our CD/Treasuries/MM previously and am very happy I don't have to do it anymore.

Thanks for sharing this. You mentioned you were paying approximately $25K in fees for $10M, so is your rate .25%? And do you feel for $3M in assets that .5% is a good rate?

I think that is a good rate for $3M. Especially if they do not charge a fee for your "cash" holdings (Treasuries/CD/MM/etc) or your 529s. And are very responsive to your needs.

We have been with our FA for 20+ years. So since we were only worth $1-2M. We chose to stay with them because we trust them. Even when we made the quick switch to UHNW 3 years ago we stayed---because they showed us they could (and would ) manage everything for us, they had access to wealth management team that is amazing. At that level, most of the FA who want your business are slimy and pushy and I didn't want to work with any of them. We interviewed a few just to see and I couldn't' stomach it. They are just annoying and sleezy to me.

I like that we are most likely our FA top client, not just another UHNW/HNW family.

What in tarnation does a wealth management team do?

Mostly it's about adding detailed tax advice (slash avoidance let's be honest), and estate planning. Those usually aren't a major part of traditional financial planning/management.

Not really. Tax advice and estate planning are literally what a financial planner does. This is nothing special and you don't need a wealth management team to get that advice.

But you do need to pay for this wealth management team's salaries. If you are the caring, charitable type, you could find a firm to do similar and donate the savings to the many non-profits that need your money.

No, typical financial planners do NOT provide estate planning when you are higher net worth. Sure, they know when to harvest tax losses, etc. And they know the basics of when the death tax kicks in at federal and state levels (if applicable). But unless they are also a lawyer, they definately do not know the intricacies of UHNW/HNW estate planning.

As far as "WM team salaries", those are at our investment firm, whether we use them or not. When we only had $5M with them, we didn't need (or really qualify ) for the advanced services. Now that we have more $$$ we still don't pay any higher percentage, if anything, we negotiated lower rates over various tiers. So our FA would still be getting our percentage of investments, whether we use these advanced services or not.

Most do NOT need the wealth management team. But once you hit a certain level, you certainly do. And its easiest to have it all "under one roof". Our FA coordinates it all as needed.

What do you consider higher net worth? Anything under $10M is does not require a special team. Financial planners work with clients under 10M every day. They partner with regular old estate planning attorneys.

You are always paying, with one hand or the other.

Well aware of that. Once you hit $10-15M+, with the ability for it to increase and assuming over $20M eventually, you need a special team. Yes, you pay one way or the other. But it would be stupid to not use the "free" services within our specialized financial management team. We are not paying extra for them, it's the perks of having a large amount invested with them and the likelihood of having more in the future. But we pay our percentage fee no matter what. Might as well save $10K+ per year in consultation fees. And in our case, the lead coordinator/wealth management manager besides our FA is actually someone we already knew who is highly qualified (they were our estate lawyer and then made the switch to Wealth Planning). So we have worked with them in other capacities for over a decade and love them and trust them. Except now, we don't pay $400+/hr to consult with them as a lawyer---it's all included at no additional cost to us. So we go to our lawyer with a well defined plan and only pay for 3-5 hours of work to make changes. Much better than 10-15 additional hours of consulting with the lawyer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our FA is also our CPA. We are paying him .5% annually to manage just under $3M. We have a other assets in other funds (401K, Deferred Comp, Company Stock, Stock Options, 529, donor advised fund, etc.) which he doesn't manage, but still gives advice on allocations and other issues that would have tax implications. Our total investments, including the assets he manages, are about $12M.

He also helped us update our estate plan and made sure we are insured appropriately.

We like the convenience of having a CPA who understands our tax situation manage our funds and advise us on our other funds. My husband is also approaching retirement, so it has been reassuring having someone who can help us plan, which will be in about a year.

+1

Our FA is not our CPA, but they work closely with our CPA and our Estate Planner and everyone involved in our Wealth management team. They are the "glue that holds it all together". Sure I could pay less and manage it myself. But it's nice to just call/email/text and have them manage it for me. That is what you get for your 0.5% for everything they manage (for us it's $~10M). They also advise on our 529, 401K and everything financial even if they are not collecting a fee on that portion. They handle all of our treasury/CD/short term investments with out any fees (that is much more than $10M). Making sure it's all in best options for highest return when they come due. Also follows up when some has been in CDs at banks that have gone under (there have been a few in last 2 years----that happens when you spread it all out to keep FDIC insurance). That means I don't have to have accounts at 20+ banks to manage myself. That part all comes at "no fee" to us. Sure paying $25K+ per year may seem like a lot for most people, but when you are at HNW/UHNW it's just a part of managing your finances. And a great FA makes it all run smoothly. I know, because I used to manage our CD/Treasuries/MM previously and am very happy I don't have to do it anymore.

Thanks for sharing this. You mentioned you were paying approximately $25K in fees for $10M, so is your rate .25%? And do you feel for $3M in assets that .5% is a good rate?

I think that is a good rate for $3M. Especially if they do not charge a fee for your "cash" holdings (Treasuries/CD/MM/etc) or your 529s. And are very responsive to your needs.

We have been with our FA for 20+ years. So since we were only worth $1-2M. We chose to stay with them because we trust them. Even when we made the quick switch to UHNW 3 years ago we stayed---because they showed us they could (and would ) manage everything for us, they had access to wealth management team that is amazing. At that level, most of the FA who want your business are slimy and pushy and I didn't want to work with any of them. We interviewed a few just to see and I couldn't' stomach it. They are just annoying and sleezy to me.

I like that we are most likely our FA top client, not just another UHNW/HNW family.

What in tarnation does a wealth management team do?

Help coordinate your CPA, estate planning, creating a foundation, etc. Not something most people need, but when you hit the UHNW ($30M+) there are many new issues that need to be addressed. We have an estate consultant (not our lawyer) who for no fee will spend hours helping us develop/tweak our estate plans, available for consultation as much as needed. There are also other experts on specific estate subjects/foundation creation/etc that we can consult with as needed. Then we take those ideas to our actual lawyer to draw them up. So basically, rather than paying $400+/hr to discuss complex estate planning (which at that level involves tax planning as well/ tax avoidance for when you die), we do that with him and others from the wealth management team to craft the plan, then just pay the lawyer for 4-5 hours of work. In the last 3 years, we have gotten 50+ hours of consultation for free and only had to pay the lawyer for less than 10 Hours. Given that the main person is actually a lawyer (but not working as a lawyer currently, so not allowed to officially give "legal advice") we are getting top notch consultation for free. It's part of our FA/Wealth management team that becomes available to you when you reach a certain level of wealth. Lots of perks become available at a certain wealth level. They want your business and quite frankly it's much easier to manage it all where everyone works for same company and has access to all your details.

So yes, if you have a net worth of only $2M your estate and wills are very simple. And a simple lawyer familiar with wills will be fine and you can use a good FA. But once you hit $10-15M you typically need more resources available for you.

I hate to break this to you, but you aren't getting any of these services for free.

But we don't get a break on the investment fee percentage if we don't use the services. So yes, in reality they are "free perks". If I'm paying X% of amount invested for my FA, that amount doesn't change if we don't use the extra services. So it would be foolish not to use those services.

[Anonymous]

Anonymous wrote:

Anonymous wrote:most anti financial advisor people on here probably think they are smarter than they are.

"Markets are going to crash this year."

"We are due for the big one."

"Biden or Trump will end the world."

They probably sell and buy at the worst times. A FAs job is not to try and get you on the cover of Forbes, it's too prevent YOU from making stupid mistakes. That cost is intangible and not necessarily quantifiable.

We happily pay our advisor because they keep up from being emotional with money. The $25k we pay them is a lot but I don't know how I would have reacted without them. For all I care, my assets are at all time highs. Win win.

A good advisor will admit this and provide a ton of other value add service offerings. A bad advisor tries to sell their "outperformance"

Nope, most anti-financial advisor people here know exactly how stupid we are. And how stupid financial advisors/salespeople are. Which is why we buy and hold the market, and rebalance once a year. If you need to pay someone $25 k to stop you being emotional with money, that might be money better spent on therapists.

Good plan, when you are only worth $1-2M. Once you have $20M+, a great FA will have access to funds that "most people" do NOT have access to. You are open to a whole new world of PE ventures for example. Choose right (invest in PE ventures from firms that rarely fail) and those can have returns well above market averages. But you need $500K-1M+ to invest in these. hence why they are not available to most people. But when you have $20M+, it's another way to diversify with a some of risk but a huge chance for rewards.

[Anonymous]

The thing the planner provides if your accounts are under scrutiny is plausible deniability that someone else made a mistake. Only you can weight the value of that vs. the price you pay.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our FA is also our CPA. We are paying him .5% annually to manage just under $3M. We have a other assets in other funds (401K, Deferred Comp, Company Stock, Stock Options, 529, donor advised fund, etc.) which he doesn't manage, but still gives advice on allocations and other issues that would have tax implications. Our total investments, including the assets he manages, are about $12M.

He also helped us update our estate plan and made sure we are insured appropriately.

We like the convenience of having a CPA who understands our tax situation manage our funds and advise us on our other funds. My husband is also approaching retirement, so it has been reassuring having someone who can help us plan, which will be in about a year.

+1

Our FA is not our CPA, but they work closely with our CPA and our Estate Planner and everyone involved in our Wealth management team. They are the "glue that holds it all together". Sure I could pay less and manage it myself. But it's nice to just call/email/text and have them manage it for me. That is what you get for your 0.5% for everything they manage (for us it's $~10M). They also advise on our 529, 401K and everything financial even if they are not collecting a fee on that portion. They handle all of our treasury/CD/short term investments with out any fees (that is much more than $10M). Making sure it's all in best options for highest return when they come due. Also follows up when some has been in CDs at banks that have gone under (there have been a few in last 2 years----that happens when you spread it all out to keep FDIC insurance). That means I don't have to have accounts at 20+ banks to manage myself. That part all comes at "no fee" to us. Sure paying $25K+ per year may seem like a lot for most people, but when you are at HNW/UHNW it's just a part of managing your finances. And a great FA makes it all run smoothly. I know, because I used to manage our CD/Treasuries/MM previously and am very happy I don't have to do it anymore.

Thanks for sharing this. You mentioned you were paying approximately $25K in fees for $10M, so is your rate .25%? And do you feel for $3M in assets that .5% is a good rate?

I think that is a good rate for $3M. Especially if they do not charge a fee for your "cash" holdings (Treasuries/CD/MM/etc) or your 529s. And are very responsive to your needs.

We have been with our FA for 20+ years. So since we were only worth $1-2M. We chose to stay with them because we trust them. Even when we made the quick switch to UHNW 3 years ago we stayed---because they showed us they could (and would ) manage everything for us, they had access to wealth management team that is amazing. At that level, most of the FA who want your business are slimy and pushy and I didn't want to work with any of them. We interviewed a few just to see and I couldn't' stomach it. They are just annoying and sleezy to me.

I like that we are most likely our FA top client, not just another UHNW/HNW family.

What in tarnation does a wealth management team do?

Help coordinate your CPA, estate planning, creating a foundation, etc. Not something most people need, but when you hit the UHNW ($30M+) there are many new issues that need to be addressed. We have an estate consultant (not our lawyer) who for no fee will spend hours helping us develop/tweak our estate plans, available for consultation as much as needed. There are also other experts on specific estate subjects/foundation creation/etc that we can consult with as needed. Then we take those ideas to our actual lawyer to draw them up. So basically, rather than paying $400+/hr to discuss complex estate planning (which at that level involves tax planning as well/ tax avoidance for when you die), we do that with him and others from the wealth management team to craft the plan, then just pay the lawyer for 4-5 hours of work. In the last 3 years, we have gotten 50+ hours of consultation for free and only had to pay the lawyer for less than 10 Hours. Given that the main person is actually a lawyer (but not working as a lawyer currently, so not allowed to officially give "legal advice") we are getting top notch consultation for free. It's part of our FA/Wealth management team that becomes available to you when you reach a certain level of wealth. Lots of perks become available at a certain wealth level. They want your business and quite frankly it's much easier to manage it all where everyone works for same company and has access to all your details.

So yes, if you have a net worth of only $2M your estate and wills are very simple. And a simple lawyer familiar with wills will be fine and you can use a good FA. But once you hit $10-15M you typically need more resources available for you.

I hate to break this to you, but you aren't getting any of these services for free.

But we don't get a break on the investment fee percentage if we don't use the services. So yes, in reality they are "free perks". If I'm paying X% of amount invested for my FA, that amount doesn't change if we don't use the extra services. So it would be foolish not to use those services.

You can think of it that way, but it is the wrong way. Critical thinking skills are not required for many jobs in the DC area.


They are overcharging you, so they can throw in other things for "free". If they charge you $30,000 a year, they don't mind giving you $5,000 of free stuff. You can get what they are offering for a lot less with the same quality. You need to determine how much time you want to look for an extra $10,000 -$15,000 a year. Truth!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our FA is also our CPA. We are paying him .5% annually to manage just under $3M. We have a other assets in other funds (401K, Deferred Comp, Company Stock, Stock Options, 529, donor advised fund, etc.) which he doesn't manage, but still gives advice on allocations and other issues that would have tax implications. Our total investments, including the assets he manages, are about $12M.

He also helped us update our estate plan and made sure we are insured appropriately.

We like the convenience of having a CPA who understands our tax situation manage our funds and advise us on our other funds. My husband is also approaching retirement, so it has been reassuring having someone who can help us plan, which will be in about a year.

+1

Our FA is not our CPA, but they work closely with our CPA and our Estate Planner and everyone involved in our Wealth management team. They are the "glue that holds it all together". Sure I could pay less and manage it myself. But it's nice to just call/email/text and have them manage it for me. That is what you get for your 0.5% for everything they manage (for us it's $~10M). They also advise on our 529, 401K and everything financial even if they are not collecting a fee on that portion. They handle all of our treasury/CD/short term investments with out any fees (that is much more than $10M). Making sure it's all in best options for highest return when they come due. Also follows up when some has been in CDs at banks that have gone under (there have been a few in last 2 years----that happens when you spread it all out to keep FDIC insurance). That means I don't have to have accounts at 20+ banks to manage myself. That part all comes at "no fee" to us. Sure paying $25K+ per year may seem like a lot for most people, but when you are at HNW/UHNW it's just a part of managing your finances. And a great FA makes it all run smoothly. I know, because I used to manage our CD/Treasuries/MM previously and am very happy I don't have to do it anymore.

Thanks for sharing this. You mentioned you were paying approximately $25K in fees for $10M, so is your rate .25%? And do you feel for $3M in assets that .5% is a good rate?

I think that is a good rate for $3M. Especially if they do not charge a fee for your "cash" holdings (Treasuries/CD/MM/etc) or your 529s. And are very responsive to your needs.

We have been with our FA for 20+ years. So since we were only worth $1-2M. We chose to stay with them because we trust them. Even when we made the quick switch to UHNW 3 years ago we stayed---because they showed us they could (and would ) manage everything for us, they had access to wealth management team that is amazing. At that level, most of the FA who want your business are slimy and pushy and I didn't want to work with any of them. We interviewed a few just to see and I couldn't' stomach it. They are just annoying and sleezy to me.

I like that we are most likely our FA top client, not just another UHNW/HNW family.

What in tarnation does a wealth management team do?

Help coordinate your CPA, estate planning, creating a foundation, etc. Not something most people need, but when you hit the UHNW ($30M+) there are many new issues that need to be addressed. We have an estate consultant (not our lawyer) who for no fee will spend hours helping us develop/tweak our estate plans, available for consultation as much as needed. There are also other experts on specific estate subjects/foundation creation/etc that we can consult with as needed. Then we take those ideas to our actual lawyer to draw them up. So basically, rather than paying $400+/hr to discuss complex estate planning (which at that level involves tax planning as well/ tax avoidance for when you die), we do that with him and others from the wealth management team to craft the plan, then just pay the lawyer for 4-5 hours of work. In the last 3 years, we have gotten 50+ hours of consultation for free and only had to pay the lawyer for less than 10 Hours. Given that the main person is actually a lawyer (but not working as a lawyer currently, so not allowed to officially give "legal advice") we are getting top notch consultation for free. It's part of our FA/Wealth management team that becomes available to you when you reach a certain level of wealth. Lots of perks become available at a certain wealth level. They want your business and quite frankly it's much easier to manage it all where everyone works for same company and has access to all your details.

So yes, if you have a net worth of only $2M your estate and wills are very simple. And a simple lawyer familiar with wills will be fine and you can use a good FA. But once you hit $10-15M you typically need more resources available for you.

I hate to break this to you, but you aren't getting any of these services for free.

But we don't get a break on the investment fee percentage if we don't use the services. So yes, in reality they are "free perks". If I'm paying X% of amount invested for my FA, that amount doesn't change if we don't use the extra services. So it would be foolish not to use those services.

You can think of it that way, but it is the wrong way. Critical thinking skills are not required for many jobs in the DC area.


They are overcharging you, so they can throw in other things for "free". If they charge you $30,000 a year, they don't mind giving you $5,000 of free stuff. You can get what they are offering for a lot less with the same quality. You need to determine how much time you want to look for an extra $10,000 -$15,000 a year. Truth!

If you are worth $20M+, $20K/year for a financial advisor is really just a blip on the financial radar. We pay more than that in property taxes for Each of our properties in a year. Fairly certain most people worth that much are not doing the investing themselves. Sure they could, but it's a service most are willing to pay for. Did my own until we were worth $3-4M. So totally capable of it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our FA is also our CPA. We are paying him .5% annually to manage just under $3M. We have a other assets in other funds (401K, Deferred Comp, Company Stock, Stock Options, 529, donor advised fund, etc.) which he doesn't manage, but still gives advice on allocations and other issues that would have tax implications. Our total investments, including the assets he manages, are about $12M.

He also helped us update our estate plan and made sure we are insured appropriately.

We like the convenience of having a CPA who understands our tax situation manage our funds and advise us on our other funds. My husband is also approaching retirement, so it has been reassuring having someone who can help us plan, which will be in about a year.

+1

Our FA is not our CPA, but they work closely with our CPA and our Estate Planner and everyone involved in our Wealth management team. They are the "glue that holds it all together". Sure I could pay less and manage it myself. But it's nice to just call/email/text and have them manage it for me. That is what you get for your 0.5% for everything they manage (for us it's $~10M). They also advise on our 529, 401K and everything financial even if they are not collecting a fee on that portion. They handle all of our treasury/CD/short term investments with out any fees (that is much more than $10M). Making sure it's all in best options for highest return when they come due. Also follows up when some has been in CDs at banks that have gone under (there have been a few in last 2 years----that happens when you spread it all out to keep FDIC insurance). That means I don't have to have accounts at 20+ banks to manage myself. That part all comes at "no fee" to us. Sure paying $25K+ per year may seem like a lot for most people, but when you are at HNW/UHNW it's just a part of managing your finances. And a great FA makes it all run smoothly. I know, because I used to manage our CD/Treasuries/MM previously and am very happy I don't have to do it anymore.

Thanks for sharing this. You mentioned you were paying approximately $25K in fees for $10M, so is your rate .25%? And do you feel for $3M in assets that .5% is a good rate?

I think that is a good rate for $3M. Especially if they do not charge a fee for your "cash" holdings (Treasuries/CD/MM/etc) or your 529s. And are very responsive to your needs.

We have been with our FA for 20+ years. So since we were only worth $1-2M. We chose to stay with them because we trust them. Even when we made the quick switch to UHNW 3 years ago we stayed---because they showed us they could (and would ) manage everything for us, they had access to wealth management team that is amazing. At that level, most of the FA who want your business are slimy and pushy and I didn't want to work with any of them. We interviewed a few just to see and I couldn't' stomach it. They are just annoying and sleezy to me.

I like that we are most likely our FA top client, not just another UHNW/HNW family.

What in tarnation does a wealth management team do?

Help coordinate your CPA, estate planning, creating a foundation, etc. Not something most people need, but when you hit the UHNW ($30M+) there are many new issues that need to be addressed. We have an estate consultant (not our lawyer) who for no fee will spend hours helping us develop/tweak our estate plans, available for consultation as much as needed. There are also other experts on specific estate subjects/foundation creation/etc that we can consult with as needed. Then we take those ideas to our actual lawyer to draw them up. So basically, rather than paying $400+/hr to discuss complex estate planning (which at that level involves tax planning as well/ tax avoidance for when you die), we do that with him and others from the wealth management team to craft the plan, then just pay the lawyer for 4-5 hours of work. In the last 3 years, we have gotten 50+ hours of consultation for free and only had to pay the lawyer for less than 10 Hours. Given that the main person is actually a lawyer (but not working as a lawyer currently, so not allowed to officially give "legal advice") we are getting top notch consultation for free. It's part of our FA/Wealth management team that becomes available to you when you reach a certain level of wealth. Lots of perks become available at a certain wealth level. They want your business and quite frankly it's much easier to manage it all where everyone works for same company and has access to all your details.

So yes, if you have a net worth of only $2M your estate and wills are very simple. And a simple lawyer familiar with wills will be fine and you can use a good FA. But once you hit $10-15M you typically need more resources available for you.

I hate to break this to you, but you aren't getting any of these services for free.

But we don't get a break on the investment fee percentage if we don't use the services. So yes, in reality they are "free perks". If I'm paying X% of amount invested for my FA, that amount doesn't change if we don't use the extra services. So it would be foolish not to use those services.

You can think of it that way, but it is the wrong way. Critical thinking skills are not required for many jobs in the DC area.


They are overcharging you, so they can throw in other things for "free". If they charge you $30,000 a year, they don't mind giving you $5,000 of free stuff. You can get what they are offering for a lot less with the same quality. You need to determine how much time you want to look for an extra $10,000 -$15,000 a year. Truth!

If you are worth $20M+, $20K/year for a financial advisor is really just a blip on the financial radar. We pay more than that in property taxes for Each of our properties in a year. Fairly certain most people worth that much are not doing the investing themselves. Sure they could, but it's a service most are willing to pay for. Did my own until we were worth $3-4M. So totally capable of it.

If you are paying $20,000 on a $20 million portfolio, you are down to a 0.1% AUM fee.

I am more on the anti-FA side because of AUM fees digging into your returns, but at 0.1% PP is correct. That's just a blip on the radar.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our FA is also our CPA. We are paying him .5% annually to manage just under $3M. We have a other assets in other funds (401K, Deferred Comp, Company Stock, Stock Options, 529, donor advised fund, etc.) which he doesn't manage, but still gives advice on allocations and other issues that would have tax implications. Our total investments, including the assets he manages, are about $12M.

He also helped us update our estate plan and made sure we are insured appropriately.

We like the convenience of having a CPA who understands our tax situation manage our funds and advise us on our other funds. My husband is also approaching retirement, so it has been reassuring having someone who can help us plan, which will be in about a year.

+1

Our FA is not our CPA, but they work closely with our CPA and our Estate Planner and everyone involved in our Wealth management team. They are the "glue that holds it all together". Sure I could pay less and manage it myself. But it's nice to just call/email/text and have them manage it for me. That is what you get for your 0.5% for everything they manage (for us it's $~10M). They also advise on our 529, 401K and everything financial even if they are not collecting a fee on that portion. They handle all of our treasury/CD/short term investments with out any fees (that is much more than $10M). Making sure it's all in best options for highest return when they come due. Also follows up when some has been in CDs at banks that have gone under (there have been a few in last 2 years----that happens when you spread it all out to keep FDIC insurance). That means I don't have to have accounts at 20+ banks to manage myself. That part all comes at "no fee" to us. Sure paying $25K+ per year may seem like a lot for most people, but when you are at HNW/UHNW it's just a part of managing your finances. And a great FA makes it all run smoothly. I know, because I used to manage our CD/Treasuries/MM previously and am very happy I don't have to do it anymore.

Thanks for sharing this. You mentioned you were paying approximately $25K in fees for $10M, so is your rate .25%? And do you feel for $3M in assets that .5% is a good rate?

I think that is a good rate for $3M. Especially if they do not charge a fee for your "cash" holdings (Treasuries/CD/MM/etc) or your 529s. And are very responsive to your needs.

We have been with our FA for 20+ years. So since we were only worth $1-2M. We chose to stay with them because we trust them. Even when we made the quick switch to UHNW 3 years ago we stayed---because they showed us they could (and would ) manage everything for us, they had access to wealth management team that is amazing. At that level, most of the FA who want your business are slimy and pushy and I didn't want to work with any of them. We interviewed a few just to see and I couldn't' stomach it. They are just annoying and sleezy to me.

I like that we are most likely our FA top client, not just another UHNW/HNW family.

What in tarnation does a wealth management team do?

Help coordinate your CPA, estate planning, creating a foundation, etc. Not something most people need, but when you hit the UHNW ($30M+) there are many new issues that need to be addressed. We have an estate consultant (not our lawyer) who for no fee will spend hours helping us develop/tweak our estate plans, available for consultation as much as needed. There are also other experts on specific estate subjects/foundation creation/etc that we can consult with as needed. Then we take those ideas to our actual lawyer to draw them up. So basically, rather than paying $400+/hr to discuss complex estate planning (which at that level involves tax planning as well/ tax avoidance for when you die), we do that with him and others from the wealth management team to craft the plan, then just pay the lawyer for 4-5 hours of work. In the last 3 years, we have gotten 50+ hours of consultation for free and only had to pay the lawyer for less than 10 Hours. Given that the main person is actually a lawyer (but not working as a lawyer currently, so not allowed to officially give "legal advice") we are getting top notch consultation for free. It's part of our FA/Wealth management team that becomes available to you when you reach a certain level of wealth. Lots of perks become available at a certain wealth level. They want your business and quite frankly it's much easier to manage it all where everyone works for same company and has access to all your details.

So yes, if you have a net worth of only $2M your estate and wills are very simple. And a simple lawyer familiar with wills will be fine and you can use a good FA. But once you hit $10-15M you typically need more resources available for you.

I hate to break this to you, but you aren't getting any of these services for free.

But we don't get a break on the investment fee percentage if we don't use the services. So yes, in reality they are "free perks". If I'm paying X% of amount invested for my FA, that amount doesn't change if we don't use the extra services. So it would be foolish not to use those services.

You can think of it that way, but it is the wrong way. Critical thinking skills are not required for many jobs in the DC area.


They are overcharging you, so they can throw in other things for "free". If they charge you $30,000 a year, they don't mind giving you $5,000 of free stuff. You can get what they are offering for a lot less with the same quality. You need to determine how much time you want to look for an extra $10,000 -$15,000 a year. Truth!

If you are worth $20M+, $20K/year for a financial advisor is really just a blip on the financial radar. We pay more than that in property taxes for Each of our properties in a year. Fairly certain most people worth that much are not doing the investing themselves. Sure they could, but it's a service most are willing to pay for. Did my own until we were worth $3-4M. So totally capable of it.

If you are paying $20,000 on a $20 million portfolio, you are down to a 0.1% AUM fee.

I am more on the anti-FA side because of AUM fees digging into your returns, but at 0.1% PP is correct. That's just a blip on the radar.

My example of a $30K fee is not based on a net worth, just using random numbers.