I am relatively savvy with my money but feel like I can do so much more if I were to be focused on it every day. As an example, I keep a large sum of cash for just in case situations whereas I could be earning interest over it or invest it while the market is crashing.
I am 28 – never met or even spoke to a financial advisor. Sounded a bit scary always to pay someone a portion of my wealth – my net worth around 100k to 250k. Let alone most advisors (I found out recently) don’t even take you in as a client if you are below $1MM or $500k at least.
Has anyone used a financial advisor/wealth manager? Are you satisfied with the services? What kind of services did you get? Do you have any recommendation who to hire or where to find one?
Comments
At that net worth you’re better off just learning personal finance by yourself imo.
Unless you’re over $10M, you can learn the basics yourself and invest in indexes, etc.
It’s estate planning and business taxes that get trickier.
I have them. The team mainly exists to manage some assets and reduce tax burden. The bank I work with also provides other exclusive investment opportunities (PE and VC, mainly) that wouldn’t otherwise be pitched to me.
I also can’t actively trade securities because of my job so they manage part of my blind trust alongside my FO.
I don’t think a financial advisor makes sense unless it’s getting far too hard for you to manage your assets yourself.
At that net worth, you’re probably better off handling your own finances.
However, if you DO go to find a wealth manager or financial advisor, for the love of all that is good and holy and sacred and decent in this and any other world…
MAKE SURE THEY ARE REGISTERED AS A FIDUCIARY!!!
If they are not registered as either a Registered Investment Advisor (RIA) or a Certified Financial Planner (CFP) with the SEC, they do not have any fiduciary duty to you and do not have to act in your financial best interest. Not all financial advisors are fiduciaries, and people who don’t know this can get SUPER fucked-over.
The finance/insurance and investment industry can feel pretty insular. I have a broker who can navigate the industry the way an outsider can’t. I know enough that he doesn’t have to dumb it down to explain it to me, but he is fluent in the insider’s language in a way that I am not.
I use an advisor (and money manager) for two reasons: because it helps enforce discipline and it gives me access to investments I wouldn’t otherwise have access to. If you can be disciplined not to redo your entire portfolio when the markets are going crazy like now, and don’t care about alternative investments, then there isn’t much point. Oh, I also like the forecasts they provide about how much money I’d need to have in order to retire at a given age.
At your level of wealth you aren’t going to get anything from paying fees that you can’t do yourself with a bit of research. You really should find some way to make your investments align with your goals over the next 10, 20, 30 years. If that’s something you can’t, won’t or are afraid to do, what would otherwise be unreasonably high fees for a wealth adviser would start to make sense.
At about one to two orders of magnitude higher net worth (accredited and qualified investor according to the SEC), an adviser can offer access to non-registered securities like private placement deals and funds that you wouldn’t otherwise know about. These can have excellent returns.
Most people are not willing to do the bare minimum of homework even when it comes to their life savings. An advisor does your homework for you. For people who don’t have so many assets they’re impossible to keep track of they’re not really necessary but then again you could say that for a lot of things and yet they are because again, people don’t like putting in any effort at all.
My thought is, the more EIN’s (business) SSN’s (you+dependents) you have to manage, the more options there are for various tax breaks or other line items that can be used and present significant savings to you. If you are a standard W2 earner, then there’s pretty much nothing you really need one for on a regular basis. Have a chat once a year or less depending on how old you are regarding tax efficiency and estate planning.
However, once you start with a business, things can get more interesting, or more problematic if you get them wrong. At the bare minimum, get a good CPA ASAP and learn the very basics of accounting. Once your finances hit certain levels, you’ll want to bring in a lawyer who will work with the CPA/financial advisor to set up trusts and estates that will have to get examined every so often and during major life events (getting married, having kids, deaths, starting college, etc).
Most of them nothing. The better ones, everything.
OP: This is not an appropriate post for this sub. It’s starts as ‘explain this’ and then ends with ‘what are your personal experiences’.
You can easily search for this information online based on your post title and details.
Mostly their job is to understand the markets and advise you based on your stated goals.
In practice, the markets are irrational and in at least n=1, an old boss of mine who’s retirement age just lost 20% because his advisor recommended he stay exposed to the market instead of mostly being in bonds and other safe investments since he should not be looking to grow his retirement portfolio anymore.
I am 71 and dropped out of high school. I have friends who are financial advisors and I have done VASTLY better than they have, both in the market and IRL.
Read Warren Buffet stuff. Read J. Bogle. Then……do those things. If you can do it, don’t even buy single stocks….just buy indexes (and Berkshire if you like Buffet).
You will do better than the vast majority of money managers…..
BTW, It is actually an advantage to NOT have the time to look closely. The best thing is to plot a course and stay with it for a decade or two.
The best advice in finances is free……
Oh, if you are a little old lady (or little old man, or little old couple) or one of those people who has absolutely NO idea of what money is and all that – YES, get a financial advisor. Depending on the person, this could be at the brokerage or independent.
Investment management, Retirement/Estate/Business planning, personal financial plan, and tax strategies are just a few to name for the “value” that a good advisor try to bring. Banks usually also couple this offering with private banking (credit cards, mortgages, private insurance, etc)
Effectively, they become the client’s go-to for everything finance-related, and oftentimes, good advisors become friends with most of their clients. Clients will also get access to different specialists within the firm who can advise on things like selling a professional practice/firm, or setting up a group savings plan for your employees.
Clients are usually professionals/top earners with HH income >$300k or >1mm networth, or those with estates/inheritance/trust funds, think doctors, business owners, senior execs. At that level of net worth, you will get access to preferred rates and investments not accessible to the general retail investor. People who find value are those who don’t have the time, need sophisticated financial plans, lack emotional control, or just want peace of mind. The fees are not cheap by any means, but a certain group of people will find a lot of value.
Try Edward Jones or Thtivent. Both are low fee fiduciaries.
There are two benefits to getting a financial advisor.
The first is a human benefit – they help you figure out what you want to save up for. At what points in life are you going to need more money than you have in your bank account? (Eg maybe a wedding or holiday, or if you get sick, or when you retire). How do you figure out how to prioritise saving for each of them? This is a real art.
The second is the technical advice on how to save for these goals. For instance, some types of investments are better for short term savings goals, others are better for long term ones. Sometimes it’s better to hold assets in your own name, sometimes it’s better to hold it in a trust or retirement account. They can help you figure out how big of a cash cushion you really need, what insurances you need, and what tricks there are to make it cheaper.
The real benefit you get is from the first type, even though it sounds fuzzy and less important. The biggest risk when investing isn’t really about having a sub-optimal investing strategy. It’s that you’ll buy when the market is most hyped and sell when it’s in the middle of a crash. That’s a human problem, not a technical problem. There’s a bunch of studies that show that people who see a financial advisor regularly are more likely to actually reach their financial goals than those who rely on their own technical skills.
I’m glad I found the CFP I have. He set up my daughters 529 when the guy I did have (who was nothing but a broker making me broker, I’d love to drop his name) had a UTMA for her, he had me in funds with loads, fees, wasn’t managing nothing and I got $12k fucked in taxes when I dropped his ass. My new guy looked at my insurances, my funds, switched me over and he reaches out to me when he sees something that needs to be done. You want fee based and see CFP in their names, not commission based. Ignore any title that’s “investment executive”, “investment adviser” or similar. Check them out on brokercheck.finra.com. I honestly wish I found my CFP earlier, to each their own.
At your level of money and knowledge? Probably Nothing. If you start a business someday, they’ll help you avoid unnecessary taxes, fees, and expenses. If you trip down the stairs and hit your head really badly, or get lazy, they can file your taxes for you the exact way you’ve been doing your entire life thus far. They’ll also help you invest sensibly, which is not as easy as the latter but not nearly as hard as the former – so if you have the time, you should learn to do that yourself, but some people feel more comfortable having a professional handle it, and that’s fine.
Some folks do all their work, maintenance and mechanical, on their vehicles. Others use the services of a mechanic.
It’s all about comfort levels. My tax accountants tell me my investment team does a fantastic job for me tax wise, my investment team has someone I can contact almost 24/7. They have done nothing but make me money since I went with them. I’d rather spend my time looking for a river cruise through Croatia, Montenegro and area.
Do you buy vehicle insurance or go it alone?
Do you buy life insurance or go it alone?
Same decision as far as I’m concerned,
They sell you whole life insurance/annuities and make their money off commission.
Obviously not all, but a huge chunk of them are just salesman. You don’t have to find one who’s a fiduciary, just one who isn’t a scammer.
Advisors you can find some who charge a flat rate for a session.
For ones who manage your accounts, they charge an annual fee that is a % of your balance, most common is 1%. So if you have $50k in stocks, then you pay them $500 that year.
EDIT: 1hr old post about these kind of salesmen/advisors, just to show how common it is.
Unless you are a high net worth individual, you really don’t need these services.
> I am 28 – never met or even spoke to a financial advisor. Sounded a bit scary always to pay someone a portion of my wealth – my net worth around 100k to 250k.
That’s a wide range, are you a home owner and the difference is if counting equity or not? I just turned 30 and my net worth is around $250k-$300k, and I would never consider a financial advisor/manager. The average person shouldn’t be “doing stocks” every day or investing into private companies, just follow or at least be aware of common personal finance guidelines (contribute at least 15% (including employer match) towards retirement utilizing low cost broad index-funds, save 20% of your paycheck, save 1% your home’s current market value for repairs, pay your credit card in full, don’t be paying food/grocery delivery constantly unless you have the cash, etc.). Head over to r/personal
finance and other applicable subs for advice/input.
The Retirement Nerds spent 90 minutes breaking down the different kinds of financial advisors there are.
https://youtu.be/8uC1lgkZUWE?si=ouACNojOV2DGkW7P