Should I use a robo advisor? Or a real financial advisor?

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705740)

Otherwise just put your money in Vanguard index funds

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705767)

https://www.bogleheads.org/wiki/Two-fund_portfolio

——

What I advise here is essentially identical to certain instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s benefit. (I have to use cash for individual bequests, because all of my Berkshire shares will be fully distributed to certain philanthropic organizations over the ten years following the closing of my estate.) My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers

https://www.berkshirehathaway.com/letters/2013ltr.pdf

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705805)

so basically invest in SPY?

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705820)

I use VTI to capture small/mid caps too

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705832)

And would you put anything into BND?

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705849)

I rebalance quarterly

Timing ended up being really fortuitous this year

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705887)

On performance: I don't have a crystal ball, man. But it's not a nominal loss. I'm up 8.49% (not including dividends) in the time I've had it (since 2014). I'm up 60.6% on VTI over the same time. 🤷‍♂️

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40712177)

how long for you to return 15-20

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705798)

Ideally paid back as a producer fee at start of principal of the first production - 12 months hopefully, 18 months as an outside date. Will give a point or 2 on the backend to make up for the spread.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40706999)

keep in mind, most advisors are retards. if you find someone with a CFA (rare for an advisor), he's probably not retarded. ideally you want someone with a CFP, too. most of the expected value of a good advisor is helping you optimize your portfolio to reduce taxes and, in cases like yours, getting you to take more risk appropriate for your circumstances.

if you go with a roboadvisor, betterment is probably the best as their portfolios are the most index-like. wealthfront does a highly active strategy that has done atrociously since inception (loading up on natural resources, emerging markets, and even their home-rolled risk-parity mutual fund).

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705812)

would betterment really be better than just investing in SPY?

I have money in VDE, VWO, and BND

along with AMZN (up 500%), GOOG (up 150%), INTC, KO, MGM, MDLZ, MSFT, NGD, NTDOY, LULU (up 600%).

My problem is that I don't invest enough money because I'm a pussy. I would have made so much money with Lululemon or Amazon but my cost basis on both was only like 8k. So I made 40k on Amazon instead of 400k. :*

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705847)

betterment has two useful functions: tax location (putting funds in the right accounts to optimize for taxes) and tax-loss-harvesting (useful for deferring taxes, particularly if you are in the highest tax bracket).

i think the main value for something like betterment is it gets your invested in the market.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40705917)

https://www.barrons.com/articles/the-best-robo-advisors-for-2020-according-to-barrons-exclusive-ranking-51596243960?redirect=amp

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40708322)

never even heard of SigFig.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40711979)

A CFA will see a situation with a 97% chance of a positive outcome occurring as a low risk investment while a veteran investor won’t risk principle in that situation.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40708206)

It works like this, the TOTAL amount in all your accounts = what fee % you will be charged. So, if you have $5mil, it's at .65%.

However, the fee is only charged on the actively managed accounts. So, if you have $4mil in a trading account you manage and $1mil in a managed account, you pay .65% on the $1mil.

FA looks at my accounts on a weekly basis, adjusts my 401k positions more frequently than I would on my own, and Chase will now give me loans against my equity meaning I don't have to dick around with debt:income nonsense if I want a mortgage.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40706037)

- Pay off a 0% car loan

- Sell a metric ton of stock and ended up with 50%++ equity in a $2m++ home

- Pay $ up front to buy down the interest rate

All that to satisfy some underwriters loan:income ratio requirement. This completely fucks people like me who if given the choice opt for extremely low salaries (the highest base salary I've EVER had was $200k) in exchange for equity.

Now I don't have to deal with all that noise. I send an email to my banker, so far he's called me back within minutes for any request I've had, and he just makes things happen. If I need to sign something, it's been either docusign or he'll Fedex along with a return envelope the docs.

It's just an order of magnitude level up in terms of service, responsiveness and respect. I get it, it's a charade because they want to hold my $, but it also does have real benefits for someone like me who doesn't want to waste a breath fiddling with putting assets into the Trust, having to prove my income, etc.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40710639)

Second, anyone whose concept of investing is "beating the S&P" is pretty unsophisticated. Maybe over time various indexes tend to perform on some trend line, but look at that line, is it smooth or choppy? Let's say you need your $ during a 2-3 year period of significant decline, did investing in that ETF really pay off if you have to sell at that time? The goal of a managed account isn't to "beat the S&P", it's generally to have a consistent amount of growth regardless of the ups, downs, and volatility of the market.

STCG/LTGC I'm going to incur that whether he does the transaction or I do. If anything, he's being proactive about how he manages my account better than I would be re: tax. Right off the bat he put me into a bunch of nicely rated tax-free munis. Was it rocket science to do that? No. But fuck if I'm ever going to find the time to research XYZ local county's bond offering and buy that shit on my own. Should I superfund my kid's 529 this year or not? Again, no clue, he runs the numbers and tells me. He also has point with my tax advisor and estate attorney on tax avoidance, future wealth transfers, etc. All that just automatically happens; I occasionally get a Docusign to put something into/out of the Trust.

My FA gets a report on my account every Monday and will either make adjustments based on guidelines I've established (e.g. I requested him to continue my heavy allocation in gold / precious metals / mining and technology but NOT to put money into retail, reits, etc) or if you give them no guidelines, they manage it to the risk profile you establish. At best I would toy with my 401ks 2-3x a year, the resolution he's adjusting them at is way higher than mine.

If I want to invest in alts, they do considerable due diligence before an alt is added to the menu. If I bring an alt in that I want to invest in, they'll look at the numbers and advise my decision.

If I want a mortgage, I just get a mortgage. I no longer have to sell assets to buy more equity in a home because some stupid income:debt underwriting rule forces me to.

If things go as planned and no merger rejection, I have $4mil+ mostly tax already paid coming my way this November. However, if I want to collar (I don't, but say I did) the risk on the stock based portion of that future event, they'll write that. You don't get million dollar collars with your Robinhood account.

If we want to quit working and live off of $XXXXX/month while preserving capital, he figures out if it's possible and how to make that happen.

You're completely welcome to Warren Buffet your way with some Vanguard SP500 ETF, dollar cost average it over time, and never do anything else. More power to you.

I have money with WAY higher fees than .65%. $250k/$250k in the Long-Short (my hedge) and Precious Metals SMA.

https://www.crescat.net/wp-content/uploads/CPMC-2020-06-1.pdf

https://www.crescat.net/wp-content/uploads/CLSC-Report-2020-06.pdf

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40708027)

I'm not paying the fees for him to put me in 5 stupid ETFs and then jerk me off once or twice a year during a "financial checkup".

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40708228)

The majority of his client base are smaller family offices. He took us on basically because we have a high up connection at Morgan Stanley and they kicked us down to him since we're not as MS's level.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40708300)

https://imgur.com/a/CDNpVl9

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40710671)

Google lazy portfolios on bogleheads and just pick one.

It’s more helpful to have a good cpa or tax lawyer to do overall estate planning.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40707429)

Active management isn't to "beat the market" it's to ensure that whatever your financial goals are, you achieve them. For most, having less volatility such that they don't have -50% dips like many people had this year is worth more than an index fund that will presumably recover and outperform at some future date.

Example, I should be receiving a portion of my acquisition in stock. At one point, that stock was down such that I had a paper loss of $1mil++. I remember waking up and telling my wife "we've lost a million dollars....how cool is it that we can lose a million dollars"? In my case, I didn't care that I was in the negative because I didn't need the money and I'm in a position to chill and let it recover. Now, it's currently $10/share ABOVE what I will be receiving my stock at, so at the moment I'm about $75k+ above my original acquisition amount.

Not everyone is in a position that they can ride out big volatility swings. Active management offers someone in the above situation to collar my gains/losses. That comes at various costs, but like any risk management decision, based on an individual's tolerance, in some cases that cost makes sense.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40714669)

I've also been offered things like a collar for the millions coming my way in a few months. I passed on it, but something like that is generally only possible with a relationship with a financial institution. I can't call up fucking Vanguard to do something so "off book" given I haven't even received the equity yet and in theory the transaction could be blocked by the DOJ/libs.

I was "sold" on going this direction by talking to three people I know who all are in the $10m-100m net worth and asked them what they would have done differently when they got their first checks. Every single one of them regretted not going with an FA and following their advice early on.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40714717)

Typical churn. Stupid. There is no evidence to support this approach at all. Tax and estate planning strategies are available elsewhere for less.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40714751)

While you're at it, why don't you look at the performance of the Crescat funds I'm in and posted above. Those are super high fee, I was a real idiot to put money there since there is no evidence to support that approach at all, right?

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40714770)

If that doesn't matter to you, and it sounds like it doesn't, then proceed. The odds that you will be the exception in the long run is not impossible but it is improbable..

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40714789)

https://www.crescat.net/wp-content/uploads/CPMC-2020-06-1.pdf

Geez, I really fucking wish I wasn't paying that 2% fee...

I know exactly what I'm paying with Chase because it's explicit and transparent.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40714803)

You bought the pitch. Being a fiduciary means nothing. Nobody should be doing weekly churns in taxable and non taxable accounts. If you need a FA to give you the “option” to superfund a 529 or find tax free munis (all readily available on vanguard, Schwab, fidelity in muni funds etc), then you obviously need some very basic handholding.

Better to get tax advice on 529 v UTMA and how you can realize 0% LTCGs up to $4800/year (and then 15% up to $12k) by gifting stock to your child in the UTMA. Has your FA weighed that against superfunding? No because a CPA or lawyer knows more about that.

Institutional investors are moving overwhelmingly toward passive investing. Managers are scrambling trying to justify their fees when the performance just isn’t there. It’s ignorant and naive to think otherwise when it comes to retail investing, which has always been much more predatory than institutional investing. Take it from someone who understands the industry a lot better than you.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40715145)

Yes, gifting is also part of that 529 conversation, and my FA has saved me off my tax advisory fee by not having to run everything by that firm. I'm sure you got a great deal by coupon clipping that H&R Block discount, but my CPA/Esq. (he's both) is, on average, a $5-7k expense.

Sure, I can run my own math to see if it makes sense to superfund this year based on if/if-not scenarios when I'll be receiving a large capital gain that's mixed between cash (which I have to realize now) and stock (which I have the option to sell in a future year) and to also run those #'s based on 2020 where I resided in two states versus 2021 where I'll just be residing in one. OR, I can just say, "tell me what to do depending on A, B and C and have someone give me an answer". Option A makes sense to career worker-bee's who have been running analysis for others their whole like. Option B is what people who have been in strategic, decision making roles tend to prefer.

They're not blowing coke, throwing darts, and making trading decisions on their own. They leverage strategies that are formulated by armies of CFA/PhDs who grind away push them out to the FA teams. I was given examples to review prior to signing on and can see a current one at any time. It's a serious amount of analysis that no individual would ever be able to do on their own. It resulted in my metals portfolio getting into PSLV several weeks in advance of the market taking it from $6.XX-$9.XX.

You are an attorney at fund. You report to another attorney. I was a C-Level at a RIA, who had a GC report to me, who had the CCO report to them, who had someone like you report to them. You do not know the industry more than me.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40715266)

That's ridiculous given the numbers you mentioned. And it's indicative of your approach to investing.

"They're not blowing coke, throwing darts, and making trading decisions on their own. They leverage strategies that are formulated by armies of CFA/PhDs who grind away push them out to the FA teams. I was given examples to review prior to signing on and can see a current one at any time. It's a serious amount of analysis that no individual would ever be able to do on their own. It resulted in my metals portfolio getting into PSLV several weeks in advance of the market taking it from $6.XX-$9.XX."

Even people managing far more than your people haven't consistently beaten the indexes over the long run. It's a rare, and perhaps nearly non-existent talent. It's unlikely that the team at Chase managing piddly 6-7 figure accounts has such a rare gift for active management.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40715427)

Also, whether active investing works has nothing to do with “reporting lines” (and you don’t know how that works at my firm, but that’s irrelevant). What your FA and “army” of CFAs behind are doing barely even amounts to active investing. It literally exists to provide the illusion of “adding value” when googling it yourself suffices.

Yes you know better than everyone. Good luck lol.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40715576)

Only 1 appeared to be holistic in the sense that they discuss trusts, look at your insurance (life, disability, etc.), estate planning, tax shelters and tax loss harvesting, and of course all the usual stocks/bonds shit.

The other 2 were just all about stocks/bonds only. They didn't even discuss shit else.

All 3 charge 1% (at least for the first million).

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40712035)

1 percent AUM fee seems kind of high

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40712278)

Can I sell you life insurance?

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40712859)

Ask for their scaled fees, 1% is market for $1mil or less but it should go down as the account increases in size. What I like about Chase is that I can have money untouched by fees that counts toward the account size to get the fee discount.

Key question to ask is if ALL the money gets charged at the reduced fee or if it's 1% for the first $1mil, then $1mil-$2mil is at .85%, etc.

With Chase, as soon as you cross the next threshold the lower fee applies to ALL the money being managed.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40714331)

i'm up $700k+ from june 15 to today: http://www.xoxohth.com/thread.php?thread_id=4560383&mc=81&forum_id=2

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40715166)

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40728290)

I am in JMIA cause of xoxo.

Also in XBI (biotech ETF), SPY, QQQ and lots of gold ETFs already.

(http://www.autoadmit.com/thread.php?thread_id=4597509&forum_id=2#40728326)