Agree. I also think some of the robos from the larger firms do a sufficient job. I like Schwab but the value tilt and cash drag annoy me.

I personally think the RIA space is either ripe for AUM fee compression or updated pricing. If someone has $2-3MM in assets I'm not sure why they should be paying $25K in fees when they're not getting much more in value for the additional $1-2MM once the FP is setup on the original $1MM.

I understand everyone needs to eat but $10-15K in cash drag over a period of time adds up.

Not my brother In law. That was someone else's bro in law.

It would be have to be the mother of all bad timing.

One can't look at annual returns to gauge it. You'd have to look at rolling returns.


Jan1 2010- dec31-2010.
Jan 2 2010-jan1 2011
Jan 3 2010- Jan 2 2011

Etc etc.

I guess I just have a hard time seeing how I could pay someone 28-30 K a year to manage my money. Seems like there should be a better way....

Cyp0111 said:

---

Agree. I also think some of the robos from the larger firms do a sufficient job. I like Schwab but the value tilt and cash drag annoy me.

I personally think the RIA space is either ripe for AUM fee compression or updated pricing. If someone has $2-3MM in assets I'm not sure why they should be paying $25K in fees when they're not getting much more in value for the additional $1-2MM once the FP is setup on the original $1MM.

I understand everyone needs to eat but $10-15K in cash drag over a period of time adds up.

---

You're making the typical mistake of treating an AUM fee as a dollar amount instead of a percentage of the account.

As the value in the account grows, the consequences of the decisions and the adjustments to the FP (which is extremely fluid) grow as well. Again, insurance on a $2M home costs proportionally more than it does on a $500k home, because of the same reason.

If the fee is, say, 1% per year. You can ask yourself a few things:
-Will the wealth manager/financial planner perform 1% or more better than I would myself.
-Will the wealth manager/financial planner save me 1% per year by stopping me from making behavioral/planning/tax mistakes that every investor makes.
-Will the wealth manager/financial planner save me 1% per year in headaches, record keeping, time, or effort that I would otherwise be exhausting on my own.


If the answer is yes to any of them, then financially it's an easy decision. If yes to all 3, well......

Bigsteve said:

---

I guess I just have a hard time seeing how I could pay someone 28-30 K a year to manage my money. Seems like there should be a better way....

---

Guessing you're working with $3 million. If so, take $2 million and put it at 2-3 brokerage firms, like Fidelity, Schwab, Vanguard, TD Ameritrade, etc. Usually when you deposit over $500,000 they will give you a free financial advisor. They will setup the standard portfolio for a person your age based upon your assets and objectives. Then take your remaining million to a wealth manager. This will lower your fees from $28-30k down to $10k.

Make sure the wealth manager is not investing your money in the traditional stuff, which you already have covered at the other brokerage firms. The wealth manager should be investing your money in things available to accredited investors, like pre-IPO offerings for example.

You don't need a wealth manager to invest your money in a s&P 500 etf is my advice. Good luck!

Bigsteve said:

---

I guess I just have a hard time seeing how I could pay someone 28-30 K a year to manage my money. Seems like there should be a better way....

---

Anyone paying that much is getting raped and needs to shop.

All A&M said:

---

YouBet said:

---

All A&M said:

---

My brother-in-law made zero return from 2008-2016 managing his portfolio himself. The fees would have been well worth it for him if he had used a wealth manager.

So everyone's situation is different. If you have a complicated tax situation you don't understand, then hire a wealth manager. Also if you don't understand investing or can't remain disciplined, then hire a wealth manager.

As for me, I understand my tax situation and investments (and control my emotions) so I do it myself, but many if not most people with assets would be better off with a wealth manager.

---

How is that even possible? Was he all cash?

---

He was actively trading his entire portfolio. Just one bad move after another. After listening to what he told me, I think it is amazing that he broke even.

---

Why you gotta make me look bad??

I've had friends that have used PAS from Vanguard and the Schwab Intelligent Portfolios Plus and have been fairly happy with results. For most it should be enough. Thoughts ?