Are wealth advisors worth it?

[Anonymous]

Wife and I have roughly $10 million, mostly in Vanguard and Fidelity Index Funds (ETFs), retirement accounts, and our paid off home in NoVA. I do it myself (JD/MBA) since it really is pretty easy, and we can handle a downturn, so we stay invested and do not sell. We are both late 40s, W2 salary with 3 kids who have not started college yet (about $300K in each 529 so far).

Thinking about a fee only advisor to round out financial planning along with updating our trusts. But paying someone $50K to $75K yearly is insane.

[Anonymous]

Anonymous wrote:No. Absolutely not. We've had a strategy that has worked for us for the past decades and the "wealth advisors" we've consulted have always told us to do very stupid things, so we just thanked them and walked away, and kept doing exactly what we thought was right.

Also note that these people are not wealthy themselves... which should tell you everything you need to know!

What are the stupid things they said to do?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It absolutely makes sense for us. Several benefits, including estate planning.

How much are you paying per year?

Estate planning will likely cost 5k, NO MAS!

Okay we’ll just use LegalZoom and you’re fine. You don’t have to use an advisor just because someone else finds it useful.

How much is your potential estate? 15 million? Anything complicated? If so do not ever use legal zoom.

[Anonymous]

Anonymous wrote:Have them manage $500k and just copy every move they make with the rest of you monkey on your own…

What moves? I have one and there are no moves to make. I would still rather have one than not.

[Anonymous]

DH and I currently manage money by ourselves with the help of an estate attorney & accountant but once we turn 65 or so, we'll turn it over to an investment advisor. We have multiple brokerage accounts, private investments, trusts, charitable contributions etc and it all takes time to manage. I don't want to make mistakes as we age and I also want to free up our time, eventually.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not to me.

It strikes me as another rip off of the rich and gullible (or lazy, who farm out most non-fun aspects of their lives).

My friends swear by them, but I am more frugal (and have super simple finances).

They are not worth it if you stay on top of everything. $15 million is a lot. Not your 200k - 400k index fund portfolio.

But if you stay on top --- great.

99.9% of people will not stay on top of anything -- ever. Most people who say they would -- do not. Why? Forget, not interested, lazy, work like 80 hrs a week (looking at you biglaw). In those cases it is mandatory.

You know you.

If you have 15 million ---- is it tax efficient? Is it really diverse? Do you take you required inherited IRA distributions when you are supposed to. Are you saving enough? What about college?

Can you do all this -- yes. Will you?

This. NW around $12. HHI $4-5M. Cash flow is all over the place, estimated taxes, multistate filings, capital calls for work and personal investments, RE income/management, small DAF/foundation. So for us, it is a requirement because DH and me are busy earning it and living our lives with our young kids. But TBC, this a not someone picking stocks or (egads) mutual funds/ETFs for us. It’s a quarterly meeting.

[Anonymous]

Anonymous wrote:Wife and I have roughly $10 million, mostly in Vanguard and Fidelity Index Funds (ETFs), retirement accounts, and our paid off home in NoVA. I do it myself (JD/MBA) since it really is pretty easy, and we can handle a downturn, so we stay invested and do not sell. We are both late 40s, W2 salary with 3 kids who have not started college yet (about $300K in each 529 so far).

Thinking about a fee only advisor to round out financial planning along with updating our trusts. But paying someone $50K to $75K yearly is insane.

Put $1 millon in with them, and keep the rest where it is. That's $10k/year then lean on them for all the services they offer.

[Anonymous]

We have $2 million with our financial advisor. I think it’s worth the annual fee not to have to think about investments, etc.

[Anonymous]

Anonymous wrote:Let's say you had something like $15 million and aren't an investment expert but know some of the basics (i.e., diversification to protect against major losses). should you use a wealth advisor? The fees can be between 0.5% - 1.0% annually regardless of whether the portfolio goes up or down. That can range between $75k - $150k per year in this example!

Wealth Advisors are completely unnecessary unless you like giving your money away. If you earned $15M (assuming no inheritance, legal or divorce settlement , etc) you certainly should know how to manage your own money. The internet is filled with financial blogs that will provide the same advice as a wealth manager for free.

[Anonymous]

Open a Schwab, Merrill Edge, or similar account. Have a monthly scheduled transfer from checking to there. Schedule 60% to an S&P500 ETF, 20% to a state bond fund (tax-free), and 20% to whatever else. Forget. Leave 10-20% in cash to accrue money market rates. Buy term life insurance. You're done--and no fee.

[Anonymous]

Anonymous wrote:We have one. I have an MBA and could do a lot of this, but I don't have time. I also don't mow our lawn, wash our car, or pull weeds. I know how to do all those tasks also.

If you're in it just for returns, you can do it on your own. Just figure out your risk profile.

If you want financial planning advice, that is when it gets helpful. We have a lot going on -- estate planning, planning for college, private school, trusts, and some complicated tax stuff. That's worth it to us.

Yes, I could have hired a CPA and lawyer for each task, and spent a few hours every month rebalancing our portfolio, doing tax loss harveting, and doing the paperwork for donation of appreciated stock to charities we give to. But if that fell on me, it would never get done and I know it.

Why do people say they have an MBA like that’s something that gives them credibility on financial management. It doesn’t. I don’t have an MBA and have managed my own household’s wealth, investments, estate, etc. Our NW is north of $10M+ not from salary but from investing our capital myself.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Let's say you had something like $15 million and aren't an investment expert but know some of the basics (i.e., diversification to protect against major losses). should you use a wealth advisor? The fees can be between 0.5% - 1.0% annually regardless of whether the portfolio goes up or down. That can range between $75k - $150k per year in this example!

Wealth Advisors are completely unnecessary unless you like giving your money away. If you earned $15M (assuming no inheritance, legal or divorce settlement , etc) you certainly should know how to manage your own money. The internet is filled with financial blogs that will provide the same advice as a wealth manager for free.

I didn’t earn it by managing it. It’s more cost efficient for me to be out here making rain and allowing someone else to manage it.

[Anonymous]

Not to me, especially because it makes me uneasy to sign any type of power of attorney over to a complete stranger. It is rare but it does go wrong sometimes.

[Anonymous]

If you're comfortable and effective doing it yourself, have at it. To me it's worth it for the emotional counseling. My advisor has talked me off the ledge more than once, most recently as the pandemic was dawning, and that's saved me. I also want assurance that my spending in retirement is sustainable. And I don't want to have to pay attention to markets and asset allocation.