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[quote=Anonymous]I manage a $15M portfolio for myself, spouse, and our kids.  Spouse and I are in our early 50s.  We're both still working, although we could afford to retire now.  We've never used financial advisors, although we once signed up for a "managed separate account" program with one of the big brokerages that was a disaster.  It was essentially a mutual fund except that our brokerage account bought and sold individual stocks, resulting in lots of securities transactions that had to be reported at tax time.  In exchange for this service, the brokerage and the stock picking advisor collected an annual fee of about 3% as I recall.  It underperformed every benchmark so we got rid of it pretty quickly.  One important takeaway from the experience is that it is critical to keep your investment-related expenses low because they detract from your returns.  Nowadays, with all the brokers offering commission-free trading, you can get your expenses down to almost zero.  In fact, this year we had several brokers pay us large bonuses to move accounts to them (where we would continue to get commission-free trading).  Another broker paid us a large "retention bonus" not to move some accounts away from them to a competitor.

I probably spend about three hours a week on average managing our accounts.  Most information that you need is readily available for free on the internet, including calculators for how much you will need to retire, whether it makes sense to convert a traditional IRA to a Roth, whether it makes sense to convert a 401k plan from an old employer to an IRA, best custodians for a 529 college savings plan, etc.  I like making my own investment decisions, so it is not a painful chore for me to spend time on this.  If it were a burdensome chore that I disliked, then I would simply put all of our funds in a basket of index ETFs and watch the paint dry.

If I had questions that I could not find a satisfactory answer for on the internet, then I would consider hiring a financial advisor, on an hourly fee basis, to provide advice about discrete topics.  I would never pay somebody 1.5% of our assets to manage them.  That's a lot of money, and I don't see anyone doing a better job.

Jack Bogle and others demonstrated a long time ago that most actively managed funds and most stock pickers and money managers cannot consistently outperform the S&P500, year after year.  Before hiring an asset manager on a percentage fee basis (or continuing to employ one), I would take a look at the returns delivered by the financial advisor and see whether they are superior to the 5-year (or 10-year) return of the S&P500, after deducting whatever fees you are paying.  If they aren't, ETF index funds would be the way to go.[/quote]

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