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.

I’ve done this 2 or 3 times. There was a guy who retired from some high powered investment firm who did this as his retirement gig.

Getting advice isn’t a bad idea but paying thousands year after year doesn’t seem worth it to me

It also helps prevent any tension between me and my brother since we are outsourcing the investment decisions vs trying to agree on each little thing together.

Same for a marriage. That's why it good for a marriage

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.

Anonymous wrote:financial advisors are all frauds. paying for them is a sign of inferior intelligence and lack of basic financial literacy.

Says the guy with a $500k IRA I’m sure

Anonymous wrote:

Anonymous wrote:The best deal is actually for people who have income mainly from a business, SS, or pensions. That 1% is actually a relatively small amount for them due to relatively low investible cash.

You do realize that you are not obligated to commit all your money to an advisor, right? if you have $5M, you could have them draw a financial plan for you but only have them manage, say, $500K or $1M.

This^^^

While our FA manages most of our money, I still keep some in CD/MM that I had years ago (think 10 banks to manage FDIC insurance). And even the large amount of cash (liquid assets) our FA manages without a fee---they only charge a fee on stuff in the market. Even our 529 is "managed" by our FA, but is not included in our fee schedule. That is what a good FA does.

Anonymous wrote:If you haven’t been invested in private credit over the last few years, and are only jumping in now, it’s honestly too late. Once retail investors get in returns are diluted.

LevFin lawyer here.

while private credit is definitely the name of the game for every asset management firm right now, you really need to do your research and know who you are jumping in bed with…not all private credit and direct lending firms are the same or interchangeable.

Diligence and truly understanding the underwriting standards of the firm, their tolerance towards leverage, their market relationships and reputation, and their expectation or demands around additional liquidity support from the sponsor, in case of downsides scenarios, are critical.

If you haven’t been invested in private credit over the last few years, and are only jumping in now, it’s honestly too late. Once retail investors get in returns are diluted.

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Anonymous wrote:I am just trying to see what we are missing. We are in our mid 50s and have a net worth of about $5 million. We have 401k’s, Roth IRAs, allocated generally on the three fund approach from Boglehead. In taxable account, we have VTI and T-Bills. We also have some I-bonds and savings in HYSA. College for kids covered by 529s and a little cash flow.

What are we missing by not having an advisor?

Missed opportunities. you really need about 10 million in investable assets to get the alternative asset allocation opportunities.

And have someone doing great diligence on all of it.

Which alternative assets do advisors have access to that DIY investors don't?

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Private equity funds to name one

They underperform the market, better off with S&P 500.

Not mine. Private credit - 3 top tier funds since 20 dislocation (different vintages). Up btw 35-59%. Best returns in my portfolio last 2 years. It’s fun to dissect the borrowers in their portfolio….really interesting tbh.

But I’ve got over $1m in each of the 3 funds (net worth in 30m range).

financial advisors are all frauds. paying for them is a sign of inferior intelligence and lack of basic financial literacy.

I think it’s better to think about fees as percent of expected returns. If your portolio’s expected return is 10% (it’s not) then a 1% fee gives 10% of that away. More realistically at 5%, that’s 20%.

Reduce fees. Optimize for taxes. Don’t hire an advisor on a % of assets basis.

Or do, whatever.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am just trying to see what we are missing. We are in our mid 50s and have a net worth of about $5 million. We have 401k’s, Roth IRAs, allocated generally on the three fund approach from Boglehead. In taxable account, we have VTI and T-Bills. We also have some I-bonds and savings in HYSA. College for kids covered by 529s and a little cash flow.

What are we missing by not having an advisor?

Missed opportunities. you really need about 10 million in investable assets to get the alternative asset allocation opportunities.

And have someone doing great diligence on all of it.

Which alternative assets do advisors have access to that DIY investors don't?

.
Private equity funds to name one

They underperform the market, better off with S&P 500.

Not the right PE funds. We are in 3 and they all have surpassed the market over time. One is with a small PE company who has only ever had 1 company "fail" in over 30 years. Worth the risk for a higher return with a small portion of our investments.

Anonymous wrote:The best deal is actually for people who have income mainly from a business, SS, or pensions. That 1% is actually a relatively small amount for them due to relatively low investible cash.

You do realize that you are not obligated to commit all your money to an advisor, right? if you have $5M, you could have them draw a financial plan for you but only have them manage, say, $500K or $1M.

The best deal is actually for people who have income mainly from a business, SS, or pensions. That 1% is actually a relatively small amount for them due to relatively low investible cash.

A good advisor can help with financial planning, take care of elderly, invest to reduce risk. Bad advisors charge a 1% fee, sell insurance products, and then dump your money into high fee accounts which give them kickbacks.

I’m not paying someone 40k per year to “manage” my money.