Do I need a “wealth manager”
![[Post New]](/jforum/templates/default/images/icon_minipost_new.gif){kind=icon}
Anonymous
Personally I don't think it's worth the effort to parse things out like that. To me there are 3 big categories: US stocks- use a Total Stock Market index International stocks- use a Total International index Bonds- Use a Total Bond Market index Sure you could try to parse out what sectors/sizes/etc among stocks, and terms/ratings among bonds (as well as how to include Treasuries/i-bonds/etc), but all that stuff is so marginal. Figure out a risk/return balance that makes you feel comfortable, allocate to those 3 based on that, and set it and forget it. Target Retirement type accounts do this pretty well, although your risk preference may not align perfectly to whatever target year you may fall into. That's why a lot of people use those, because they wrap it all into a single fund/plan. But it's really not that complicated to do a 3 fund portfolio. |
Anonymous
https://www.bogleheads.org/wiki/Three-fund_portfolio |
Anonymous
We have $10 million managed by a Merrill wealth team and we have access to market linked investments with 3x accelerator notes and high return/downside protected instruments that enhance a bond ladder. These have done very well for us. Combined with their proactive tax loss harvesting, selective shopping for solid municipal bonds, and adjusting ratios of equites vs cash based on the economic outlook, and other things I would have a hard time doing on my own has made it worth it. Plus access to a low interest equity backed line of credit (up to several $million) another benefit so you can always access $ if needed without selling assets at an unfavorable time. Another good thing you dont get managing on your own. |
Anonymous
Reading this boglehead thread does not make me want to invest in Merrill’s 3x accelerator notes. https://www.bogleheads.org/forum/viewtopic.php?t=56279 Nor do I have any interest in changing my asset allocation based on someone’s assessment of the short term economic outlook (aka market timing) |
Anonymous
Yes, and note how they didn't give any actual numbers. Just "done very well for us". The total stock market is up around 10% annually since 2004. Pretty easy to "do very well" in that environment. I guess the access to the line of credit is useful,.but how often would that provide substantive value versus say a HELOC? And how often would a normal person actually need to take advantage of a line of credit up to several million? |
Anonymous
You are paying someone $10k per year to [checks notes] buy and hold? It's hard to think of a bigger waste of money. |
Anonymous
Target retirement accounts are terrible. They under perform. I had one, then switched. |
Anonymous
Does the wealth manager not "manage" the account, as in, buy/sell based on OP's preferred strategy and risk? I thought that's what they did. That's what mine does for us. My spouse is about to retire, so we met with the wealth manager yesterday. They have access to tools and programs that can more easily determine how much we should be taking out, keeping in mind taxes, having a largish cash reserve for down markets, how much we might get in social security, and what are expenses are (I'm still working, but don't make enough to cover all expenses without changing our lifestyle). |
Anonymous
If you really don’t want to DIY this you shouldn’t be paying more than $1000/hour for this. |
Anonymous
This is a Merrill salesperson. These big firms have suckered people into thinking that complexity equals value. They do tax loss harvesting because the investments they recommend lose money, so they harvest the losses. Buy an investment grade muni fund, no need to pay extra fees for this service. Line of credit, another money maker, if you have a balanced portfolio, you can access low basis alternatives if you need cash. A real financial planner does not get involved in these charades and is worth paying for. You have to spend some time to find them, since they do not have million dollar ad budgets. |
Anonymous
DP here. The timing is not really short term market timing. Rather as assets return cash through dividends or convert to cash like muni bonds in the bond ladder maturng and paying back principal, managing the process of holding in high yield cash accounts or buying another quality muni at an attractive price to maximize and lock in yield or buy a step up instrument tied to an index like S&P or a sector basket like financial stocks if the economic outlook for that basket has a higher probability of increasing vs decreasing over a time window. (A real example is when to shift a bit toward R2000 small caps which are depressed and more sensitive to higher interest rates but may outperform as rates start to decrease). The accelerators are relatively small investments (maybe 3-5% of AUM) but the 3x upside to 1x downside is worth it to enhance gowth. Only rarely does the underlying peg outperform the cap. The tax loss harvesting does save money. PP was silly to say its because of losses generated by our wealth manager. Some parts of a diversified portfolio may be down while something like an ARN pays out capital gains. TLH is complex for me to do on a large portfolio and I wouldnt do it well or at all but it saves $, often enough tax savings to offset a good part or all of wealth manager fees. No I'm not a sales rep for Merrill our manager team manages VHNW/UHNW families and we have been happy with them. I'm aware of the stuff above but don't have to deal with any of it, just make decisions based on recommendations every once in a while. There also is an underlying strategy they stick to based on our risk guidance, retirement income target, etc. and i can see the ratios of equities, fixed income, and cash. |
Anonymous
We talked with the free financial advisor at Schwab many years ago. Her advice: “Just keep doing what you’re doing.” Which was to put everything in no-load index mutual funds. This is the way. |
Anonymous
|
I will never pay fees. “Wealth Managers” do not outperform a low-fee S&P-500index fund from Fidelity or Vanguard.
|
Anonymous
This is a crock of sh**, no client would write something like this. If you are a client, post your December 31, 2019 statement so we can see your investments. You will NEVER do this. |
Anonymous
What, you don't track trends in small cap stock pricing, relative to interest rates? I thought everyone did that. |