This has probably been asked before but I was wondering how many of you millionaires use a investment advisor to manage your portfolio?
I hear that you don’t need one/ some people like having them.
If you have any personal experience and are willing to share please do so
Investment advisors do you use them or no
byu/Toeholdz_ ininvesting
Posted by Toeholdz_
7 Comments
No. Low fees index or direct management yourself is the way to go.
The highest purpose of an investment advisor is to keep you from selling when the market falls. If you can hold, you really don’t need one and almost all of them will in some way destroy your long term compound gains.
The best thing most people can do is put money in the market and forget about it. That doesn’t require active management.
“investment advisors do you use them?”
you dont need to make statements then say no, you can ask questions.
Absolutely not, I set myself in broadly diversified index funds and keep chucking money at them.
When I get a little closer to retirement I will hire someone on a project basis to come up with a game plan for withdrawals and Roth conversions and sequence of return risk, but I don’t need anyone to tell me to invest in index funds and not panic sell.
I’ve got one, gives me access to someone who has seen a ton of different scenarios.
Pretty common for Reddit to tell you to never get one and they’re a waste of money, just depends on your situation at the end of the day.
Usually by that stage in life you’re prepping for retirement, which would require retirement planning, estate planning, tax planning, new asset allocation strategies, etc. So most people end up utilizing an advisor because strategies at that stage of life can be confusing. It’s also the most important time in your life to have a solid plan. I’d say depending on the fees/advisor it pays off in the end.
For younger individuals who are millionaires (rare but let’s hypothetically say you have a cash windfall), this is where this sub and other subs will say “VOO and chill” and my personal opinion is that they’re right. Your time horizon is longer, you’re in your capital accumulation years, and the advice you’d get from an advisor aside from acting as a psychologist when the market dips so you don’t pull your money or invest too conservatively won’t really benefit you for the cost of having an advisor.
For people in the middle ground (high net worth individuals who are in their 40s-50s) I think having an advisor is worth it, but really just for a financial planning session which might run like $2k. Keeping assets with an advisor at that age to invest I still feel isnt worth the cost over time. Again, this depends on the amount of money your have and the advisor/fee structure.
Take this with a grain of salt as I am an investment advisor, but I work with companies on their retirement benefits and not individuals.
no
if you are someone that needs an advisor, use a roboadvisor instead
Yes I used them. It was a college friend of my wife who was working at Morgan Stanley so we gave her a portion to manage. Did that because I have to declare and subjected to pre trade compliance, but not if advisors takes it over.
The selection was fine, for asset less than 100K they only buy funds for you. If you have like 500K+ they might design something that is single stocks. Even just using funds/etf is generally decent. The mandate is not to beat the market but just risk aware and aligned to our lifestyle change etc.
Issues
– hard to do tax planning especially tax loss harvesting because it’s hard to project it.
– they laid off our friend, then portfolio moved to another MS advisor then again, so I don’t know who to talk to
Eventually we closed the account when we needed money for down payment.
Do I really need it? Probably not I don’t need it now, but back then it was kind of helpful….1.2% is a pretty painful high hurdle for being helpful though.