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JLeslie's avatar

If you use a money/wealth management service, did you give them most of your money to manage?

Asked by JLeslie (65561points) 1 month ago from iPhone

Just looking for a percentage. If you have money in cash, investments, and retirement combined, did you give them 80% to manage, just 30%? Don’t include all wealth like real estate, I’m only asking about money.

If you can find by googling the average percentage I would be interested in that too. I didn’t come up with it.

Also, can’t people just give a relatively small amount to manage and then copy the investments the manager makes with the rest of their money without paying a fee?

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14 Answers

elbanditoroso's avatar

no, no, no. I don’t trust them to work on my behalf. And in my research (I have considered financial managers in the past), their fees – a couple of percent per year – are not commensurate with the gain that they would bring. (and you pay them whether their advise is good or not).

Investment managers are good for people who don’t have the time or inclination to do their own research and thinking, or who don’t understand finance (big picture).

I’m fortunate in that I have the time to do these things. Am I more successful than the professionals? I don’t know, but I am happier that I am controlling things, not them. And definitely not one of those computer-based investment advisors.

JLeslie's avatar

@elbanditoroso This is my thoughts too, but my husband seems hell bent on doing it.

I don’t know what computer based is?

JLeslie's avatar

Wow. I never even heard of that.

gorillapaws's avatar

About 70% is in a managed 401k account. Once can definetly do better by just dropping it into an index fund or a target date fund and then walk @elbanditoroso correctly points out. I’ve been so busy lately though and the market/geopolitical landscape has been so bizarre since COVID that I currently feel safer with my life savings mostly being watched by someone who has the time to keep up with the market.

Caravanfan's avatar

Yes, I have a fiduciary who manages my non 457 accounts. When I reitre I will roll over my 457 into a 401K that he will manage for me. They have me in a diversified portfolio that I am comfortable with.

JLeslie's avatar

@Caravanfan Are they managing some retirement funds and some non-retirement and all the accounts are allotted exactly the same whether retirement or not? Like if you have an IRA account separate from what you mentioned. Not sure I am explaining my question well.

Caravanfan's avatar

@JLeslie I have my work 457b (like a 401k for a government employee) that I manage, although he advised me on what to put it in. Once I retire, I will take it out of the 457 and roll it over into a 401k for him to manage, but while I am working I’m in the 457. The rest is managed with him, both retirement and non-retirement. So yes, the other IRAs are managed by him.

JLeslie's avatar

@Caravanfan Does he have the IRAs invested exactly the same as the non-IRA? The person my husband talked to was going to basically put both accounts the same, and I feel like this might be ignoring what is best for us regarding taxes on our income. Like it’s not really tailored to us enough. I have no experience with a money manager so I am not sure what to expect. If we do it I know I won’t give all of my money over to him, not yet. I need to see what it’s like.

Caravanfan's avatar

@JLeslie Of course not, and they shouldn’t. A non-retirement account is subject to tax and should be in a tax-friendly investment. IRAs and other retirement vehicles are tax sheltered.

JLeslie's avatar

@Caravanfan Right, that’s why I think the money that I do pay taxes on should be in stocks that I won’t get lots of dividends and not traded a lot, and my retirement fund can be throwing off all sorts of gains and it doesn’t matter.

Caravanfan's avatar

@JLeslie Or not stocks. There are other types of tax friendly investment tools. IN any case, your retirement funds only get taxed when you withdraw. But yes, you get the gist.

JLeslie's avatar

I know about the taxation, that’s why I have the IRA, so I think this particular guy or company maybe isn’t adjusting for what I need. He’s treating all the different types of accounts the same.

Tropical_Willie's avatar

@JLeslie get out of there – - Find someone that knows the difference between retirement and normal investments !!

Probably charging above average management fees too.

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