Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Geez, these guys have $5.8 billion under management with 50-120bps per year fees?

Even that 0.75% average fee that's north of $40 million a year in revenue with only 86 employees. Good job if you can get it but it's crazy to me that a firm with 86 employees total is servicing over 3,000 families.

The employees are either educated salesmen or admin. They outsource the thinking (i.e. models) to research firms to whom they pay a fee. The salesmen meet with clients, interview them, profile them, get them to agree to their profile and map them to one of their existing models. That's it. Beyond that, they focus on touch - making sure the customers don't get scared away when the market jumps around, see if they have additional funds to invest, etc. essentially making sure they have no reason to leave. For someone with limited or no expertise in this area or no time, this is not a bad thing.

I have a family member who used to be an FA at Schwab. He said the bolded was by far the biggest value he brought to his clients. Helping them not get emotional when the market jumps, stay on their course, etc. As you said, for a good number of people, there is some value in this. How much is for them to decide.

This is the # 1 reason people hire advisors. Most honest advisors know their goal is not to outperform the market because many people don’t care to outperform the S&P due to the volatility it creates. Emotional reactions are far more costly than slightly underperforming the S&P

Anonymous wrote:

Anonymous wrote:

Geez, these guys have $5.8 billion under management with 50-120bps per year fees?

Even that 0.75% average fee that's north of $40 million a year in revenue with only 86 employees. Good job if you can get it but it's crazy to me that a firm with 86 employees total is servicing over 3,000 families.

The employees are either educated salesmen or admin. They outsource the thinking (i.e. models) to research firms to whom they pay a fee. The salesmen meet with clients, interview them, profile them, get them to agree to their profile and map them to one of their existing models. That's it. Beyond that, they focus on touch - making sure the customers don't get scared away when the market jumps around, see if they have additional funds to invest, etc. essentially making sure they have no reason to leave. For someone with limited or no expertise in this area or no time, this is not a bad thing.

I have a family member who used to be an FA at Schwab. He said the bolded was by far the biggest value he brought to his clients. Helping them not get emotional when the market jumps, stay on their course, etc. As you said, for a good number of people, there is some value in this. How much is for them to decide.

Anonymous wrote:

Geez, these guys have $5.8 billion under management with 50-120bps per year fees?

Even that 0.75% average fee that's north of $40 million a year in revenue with only 86 employees. Good job if you can get it but it's crazy to me that a firm with 86 employees total is servicing over 3,000 families.

The employees are either educated salesmen or admin. They outsource the thinking (i.e. models) to research firms to whom they pay a fee. The salesmen meet with clients, interview them, profile them, get them to agree to their profile and map them to one of their existing models. That's it. Beyond that, they focus on touch - making sure the customers don't get scared away when the market jumps around, see if they have additional funds to invest, etc. essentially making sure they have no reason to leave. For someone with limited or no expertise in this area or no time, this is not a bad thing.

Anonymous wrote:
I searched and found a WaPo article about it.

https://www.washingtonpost.com/lifestyle/style/is-a-free-dinner-any-way-to-pick-a-financial-adviser/2015/02/11/8aaf7f3a-abb6-11e4-abe8-e1ef60ca26de_story.html

Good find PP. The details in the article are fascinating.

"He does one of these seminars at high-end restaurants just about every week, costing him more than $400,000 a year. About half the people who attend will come to his McLean office for a follow-up consultation, and many will become clients. The firm, which manages $1.6 billion in assets, generates about 40 percent of its new business from these dinners."

"The Chez Francois meal includes an amuse-bouche, salad, a choice of five entrees, dessert and coffee or tea. It’s expensive — about $100 per guest — but he discovered that if he has a carefully curated mailing list, “it’s worth it for us to spend money on dinner at a nice restaurant, because the quality of people coming is higher.” High-quality prospects are the right age (his average client is 62), live in affluent Zip codes and have some other, surprising indicators that Cassaday won’t share. "

"There are, of course, the people who only come for the food — some more than once. Industry insiders call them “plate-lickers”

I do wish I could be a plate licker a couple of times, as we fit the demographic profile, but are definitely in the wrong zip code.

Anonymous wrote:

Anonymous wrote:

Geez, these guys have $5.8 billion under management with 50-120bps per year fees?

Even that 0.75% average fee that's north of $40 million a year in revenue with only 86 employees. Good job if you can get it but it's crazy to me that a firm with 86 employees total is servicing over 3,000 families.

This is what the firm says about investment management. I have bolded the BS langauge.

Translation
We use models so we can service as many people as possible.
Investment Policy Committee over a dozen senior professionals - Makes it sound like they are adding value. They can fire a dozen of them and do just as well.
Market conditions, research studies, economic analysis - all old school broker language that use to and still does fake people into thinking this is important
Ongoing research to ensure strategic decisions...blah blah blah more horse

INVESTMENT MANAGEMENT
IN-HOUSE EXPERTISE

Many advisory firms outsource their investment research. At Cassaday & Company, Inc., we have a robust, analytical process in place to ensure we are in complete control of our investment selections, asset allocations, models, and overall investment strategies. Our Investment Policy Committee (IPC)—consisting of over a dozen senior professionals—regularly reviews our clients’ holdings and asset allocation, market conditions, research studies, economic analysis, and other areas relevant to the investment process. This approach encourages regular collaboration and ongoing research to ensure that strategic decisions are vetted and thoughtfully considered before they can impact your portfolio.

Yep, this is some very expensive handholding via automated processes. For that $6,000 annual minimum you can have a financial planner review your entire portfolio and strategy every year if you wanted. The principals at this place must be making money hand over fist!

Anonymous wrote:

Geez, these guys have $5.8 billion under management with 50-120bps per year fees?

Even that 0.75% average fee that's north of $40 million a year in revenue with only 86 employees. Good job if you can get it but it's crazy to me that a firm with 86 employees total is servicing over 3,000 families.

This is what the firm says about investment management. I have bolded the BS langauge.

Translation
We use models so we can service as many people as possible.
Investment Policy Committee over a dozen senior professionals - Makes it sound like they are adding value. They can fire a dozen of them and do just as well.
Market conditions, research studies, economic analysis - all old school broker language that use to and still does fake people into thinking this is important
Ongoing research to ensure strategic decisions...blah blah blah more horse

INVESTMENT MANAGEMENT
IN-HOUSE EXPERTISE

Many advisory firms outsource their investment research. At Cassaday & Company, Inc., we have a robust, analytical process in place to ensure we are in complete control of our investment selections, asset allocations, models, and overall investment strategies. Our Investment Policy Committee (IPC)—consisting of over a dozen senior professionals—regularly reviews our clients’ holdings and asset allocation, market conditions, research studies, economic analysis, and other areas relevant to the investment process. This approach encourages regular collaboration and ongoing research to ensure that strategic decisions are vetted and thoughtfully considered before they can impact your portfolio.

Geez, these guys have $5.8 billion under management with 50-120bps per year fees?

Even that 0.75% average fee that's north of $40 million a year in revenue with only 86 employees. Good job if you can get it but it's crazy to me that a firm with 86 employees total is servicing over 3,000 families.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I got three postcards in short succession a few years ago and went to all three presentations because free food. One was awful and there’s no way I would have trusted those people with a dime. One was okay, the people were nice and the concepts they were selling were reasonable.

The third was top notch and, after another year or two of research I ended up moving my money over to them. My mom followed suit not long after. I’ve been very, very happy with my returns. We sit down as often as needed but at least annually to check in, they offer estate planning services included in their fees. They did my trust a few years ago and we’re going to tweak it a little in a few weeks. My mom needs expensive care and she’s still making extra money on her money, despite the insane monthly bills. No regrets at all.

It may not be for everyone but I have a very busy life and I’m not an expert in finance so I can leave them to manage my money, they’ve done a great job over the 7-8 years I’ve been with them, and I can basically set it and forget it.

Have to say this is some skillful stealth marketing. I like how they didn’t name the firm and waiting for sock puppet to ask to push their company, skilled.

I’m the PP and I won’t mention the firm. Not sure if I’m allowed to on DCUM anyway.

Someone else asked how they manage my money. They invest it, they do tax loss harvesting, they grow it. They have several investment options of varying risk for different phases of life and circumstances. As I said before I’ve been really happy with them.

If I hadn’t had the crappier presentations I wouldn’t have recognized that theirs was different. They have been around a very long time, are fiduciaries and have a proven track record.

Does DCUM have enough readership for people to target it with this kind of stealth marketing?

I searched and found a WaPo article about it.



https://www.washingtonpost.com/lifestyle/style/is-a-free-dinner-any-way-to-pick-a-financial-adviser/2015/02/11/8aaf7f3a-abb6-11e4-abe8-e1ef60ca26de_story.html

the L'Auberge website mentions a "specially prepared five course meal" for these presentations

https://www.laubergechezfrancois.com/march-2015-newsletter/

which, I'm guessing, means I can't get chateaubriand haha so for anyone who has attended one, what was the menu? It's too long a drive out there for some watered down take it or leave it meal.

Anonymous wrote:

Anonymous wrote:I got three postcards in short succession a few years ago and went to all three presentations because free food. One was awful and there’s no way I would have trusted those people with a dime. One was okay, the people were nice and the concepts they were selling were reasonable.

The third was top notch and, after another year or two of research I ended up moving my money over to them. My mom followed suit not long after. I’ve been very, very happy with my returns. We sit down as often as needed but at least annually to check in, they offer estate planning services included in their fees. They did my trust a few years ago and we’re going to tweak it a little in a few weeks. My mom needs expensive care and she’s still making extra money on her money, despite the insane monthly bills. No regrets at all.

It may not be for everyone but I have a very busy life and I’m not an expert in finance so I can leave them to manage my money, they’ve done a great job over the 7-8 years I’ve been with them, and I can basically set it and forget it.

Have to say this is some skillful stealth marketing. I like how they didn’t name the firm and waiting for sock puppet to ask to push their company, skilled.

+1. Do not fall for the marketing.

Anonymous wrote:I just got my first one.
Dinner for 2 at Ruths Chris.
Retirement planning presentation..
Is this like timeshare sales?

Yes. There will be a hard sell. I always throw those cards out. BogleHeads.org has better advice on retirement planning than 99% of these "professional" money managers - and Bogleheads is free. The professional money managers' fees eat into any investment gains, which is why they are such a bad deal.

If any of these companies are watching this I have $500 in a brokerage account and love L’Auberge Chez Francois

I get these postcards a lot too, but never attended one. Question for those that did, do they nag you with anything at all during or after the presentation? If it's zero, I'd go and eat a free dinner.

For those asking how they can afford to do this, all it takes is for them to get one or two new clients at that session to more than recover the cost of that 'investment'.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I got three postcards in short succession a few years ago and went to all three presentations because free food. One was awful and there’s no way I would have trusted those people with a dime. One was okay, the people were nice and the concepts they were selling were reasonable.

The third was top notch and, after another year or two of research I ended up moving my money over to them. My mom followed suit not long after. I’ve been very, very happy with my returns. We sit down as often as needed but at least annually to check in, they offer estate planning services included in their fees. They did my trust a few years ago and we’re going to tweak it a little in a few weeks. My mom needs expensive care and she’s still making extra money on her money, despite the insane monthly bills. No regrets at all.

It may not be for everyone but I have a very busy life and I’m not an expert in finance so I can leave them to manage my money, they’ve done a great job over the 7-8 years I’ve been with them, and I can basically set it and forget it.

Have to say this is some skillful stealth marketing. I like how they didn’t name the firm and waiting for sock puppet to ask to push their company, skilled.

I’m the PP and I won’t mention the firm. Not sure if I’m allowed to on DCUM anyway.

Someone else asked how they manage my money. They invest it, they do tax loss harvesting, they grow it. They have several investment options of varying risk for different phases of life and circumstances. As I said before I’ve been really happy with them.

If I hadn’t had the crappier presentations I wouldn’t have recognized that theirs was different. They have been around a very long time, are fiduciaries and have a proven track record.

Thanks for sharing. Mind sharing what your ages were at the time you went to these meetings, your net worth at that time and how much this company charges you for their services?

I get these postcards, too, probably because of my zip code. Never been to one, but our local high school offered a presentation about the "Secrets of Paying for College" or something like that put on by one of these money managers. I did attend the HS presentation and the advice was basically "don't put your money in a 401(k) (except for whatever you need to get matching), let us manage it for you." The only specific thing that I remember them saying is that FAFSA doesn't exclude your retirement savings in its calculations. That's probably true; FAFSA predicts that I am full pay. But DC's school offered us aid. My understanding is that the schools get the information from FAFSA, but the school may look at your post-retirement-savings income (or adjusted gross) instead of your gross. Hard to believe that the HS keeps inviting them back.

Anonymous wrote:The irony is that it's these types of expenses that drive up their "management" fees, where I would never use one of these companies.

+1. The reputable companies invite you to their office for a presentation and offer you a cold beverage.