Why would you pay 1% to a financial advisor?

[Anonymous]

Anonymous wrote:My advisor is a fiduciary and worth every penny (under 1%). He outperforms my own attempts at investing so he basically pays for himself. Tax loss harvesting as others have mentioned is something I don’t even understand but one year I had huge gains but losses on paper. It was like magic, I have no idea how they pulled that off. Mine also has an in-house CPA and estate lawyer whose services are included as part of their fees. I’ve been very pleased.

Sounds risky to be signing tax returns that you “don’t even understand.”

I don’t think the, “it was like magic “ defense will hold up in court.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you had one, you probably have 7 mil today. So, in that case, missing 2 mil.

How? Would they have recommended some investment that would beat a low fee index fund?

We paid 1% until our guy switched firms and we asked him to lower it to .75% to follow him. Yes, he did get us into a long/short hedge fund that’s made us way more than he charges.

[Anonymous]

Anonymous wrote:For those that don’t use advisors, what do you do as a “sanity check” on your finances?

I do it all myself and feel pretty good about my allocations, etc. However I don’t trust myself. I have always wanted an advisor to review it, charge me an hourly fee, then let me take it from there.

We have someone who we pay an hourly fee. It’s $330/hour and they go over our investments but also all other aspects of our financial lives.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For those that don’t use advisors, what do you do as a “sanity check” on your finances?

I do it all myself and feel pretty good about my allocations, etc. However I don’t trust myself. I have always wanted an advisor to review it, charge me an hourly fee, then let me take it from there.

We have someone who we pay an hourly fee. It’s $330/hour and they go over our investments but also all other aspects of our financial lives.

Are you comfortable sharing their details here?

[Anonymous]

You can get even better advice for 2-3% a year, I hear.

[Anonymous]

Anonymous wrote:You can get even better advice for 2-3% a year, I hear.

I pay 10% and the guy guarantees a return of 8% regardless of what the market does! Ain't that amazing! Mernie Badoff is his name.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For those that don’t use advisors, what do you do as a “sanity check” on your finances?

I do it all myself and feel pretty good about my allocations, etc. However I don’t trust myself. I have always wanted an advisor to review it, charge me an hourly fee, then let me take it from there.

We have someone who we pay an hourly fee. It’s $330/hour and they go over our investments but also all other aspects of our financial lives.

Where do you find a person like this?

[Anonymous]

Anonymous wrote:

Anonymous wrote:The more money you have, the smaller percentage you have to pay or you can negotiate to do so. All of you should not be paying 1 percent if you have anything worth being managed. That is an old way of thinking in investment services. We use an investment firm and our money along with extended families money all is considered under the same umbrella. So we get investment services for far less than 1% because of the large amount total but our personal direct money is just a percentage of the larger pot. We still get the same services. It is very much worth it to us. Speak to investment firms and see what they can do for you. Or pool with extended family members like we did. They want your business but you have to make it worth it to them.

+1
By the time we were at a million, we were paying less than 0.5%. A good financial advisor is worth it. We do get better returns than the index market funds, have more diversity, and ours manages most financial issues for us. so they play the game of keeping our "cash" in CD/MM so we have FDIC insurance for all of it (there is a lot of it)---I don't have the time to be opening 20+ bank accounts and managing the 3-6 month CDs that come due (that has been the best returns in last year). My FA also gets access to CDs that are at higher rates than even I can get at most good online banks.

Fidelity's cash management accounts does this automatically, ie spreads the money around to different banks so it is all FDIC-insured. All you do is deposit with Fidelity.

[Anonymous]

One of the worst financial decisions is getting divorced. Anyone know someone who made that stupid financial mistake. A financial planner can help avoid making stupid decisions like that.

[Anonymous]

OP asked:

Why would you pay 1% to a financial advisor ?

Because he is my son-in-law.

[Anonymous]

“ My advisor is a fiduciary and worth every penny (under 1%). He outperforms my own attempts at investing so he basically pays for himself. Tax loss harvesting as others have mentioned is something I don’t even understand but one year I had huge gains but losses on paper. It was like magic, I have no idea how they pulled that off. Mine also has an in-house CPA and estate lawyer whose services are included as part of their fees. I’ve been very pleased”

So you don’t know very much about finances?

[Anonymous]

Ramit Sethi says absolutely do not pay 1%. Pay hourly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The more money you have, the smaller percentage you have to pay or you can negotiate to do so. All of you should not be paying 1 percent if you have anything worth being managed. That is an old way of thinking in investment services. We use an investment firm and our money along with extended families money all is considered under the same umbrella. So we get investment services for far less than 1% because of the large amount total but our personal direct money is just a percentage of the larger pot. We still get the same services. It is very much worth it to us. Speak to investment firms and see what they can do for you. Or pool with extended family members like we did. They want your business but you have to make it worth it to them.

+1
By the time we were at a million, we were paying less than 0.5%. A good financial advisor is worth it. We do get better returns than the index market funds, have more diversity, and ours manages most financial issues for us. so they play the game of keeping our "cash" in CD/MM so we have FDIC insurance for all of it (there is a lot of it)---I don't have the time to be opening 20+ bank accounts and managing the 3-6 month CDs that come due (that has been the best returns in last year). My FA also gets access to CDs that are at higher rates than even I can get at most good online banks.

You're paying someone tens of thousands of dollars to ladder CDs and handle a cash sweep that most brokerages do for free. Congrats.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The more money you have, the smaller percentage you have to pay or you can negotiate to do so. All of you should not be paying 1 percent if you have anything worth being managed. That is an old way of thinking in investment services. We use an investment firm and our money along with extended families money all is considered under the same umbrella. So we get investment services for far less than 1% because of the large amount total but our personal direct money is just a percentage of the larger pot. We still get the same services. It is very much worth it to us. Speak to investment firms and see what they can do for you. Or pool with extended family members like we did. They want your business but you have to make it worth it to them.

+1
By the time we were at a million, we were paying less than 0.5%. A good financial advisor is worth it. We do get better returns than the index market funds, have more diversity, and ours manages most financial issues for us. so they play the game of keeping our "cash" in CD/MM so we have FDIC insurance for all of it (there is a lot of it)---I don't have the time to be opening 20+ bank accounts and managing the 3-6 month CDs that come due (that has been the best returns in last year). My FA also gets access to CDs that are at higher rates than even I can get at most good online banks.

You're paying someone tens of thousands of dollars to ladder CDs and handle a cash sweep that most brokerages do for free. Congrats.

+1 The CD ladder makes me suspicious since 3-6 month T-bills have generally been outperforming CDs, until perhaps very recently. And they are not taxed at state level.

[Anonymous]

Our financial advisor helped get a loan secured by our investments. It was about the easiest thing in the world. We inquired only after we ran into a nightmare of call center bureaucracy at Truist even though we are very high net worth. Also, they have done a great job balancing our portfolio because we are conservative investors. This paid off during the recent downturn. Taxes are a big deal too. At our request, we try to have most realized gains offset by losses. It doesnt always work but it helps.