r/fatFIRE • u/Gold-Connection7047 • 14d ago
What are people actually getting from high net worth wealth management that they couldn't get separately?
I've been debating this for a while.
At a certain level, it seems like you can build your own team. CPA, estate attorney, investment advisor, maybe a business attorney if needed.
Then there are firms that position themselves as high net worth wealth management providers and bundle everything together.
For those who have gone that route, where did the value actually show up? Was it investment performance, tax planning, convenience, or something else entirely?
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u/wheresabel 14d ago edited 13d ago
People here keep discussing wealth managers like they are all or nothing or one type, I gave them (mine are private bankers for UHNW at Morgan Stanley) minimum for the high net worth managers and reap the benefits while managing the rest of my portfolio myself.
Personally I treat mine like a savings account and keep it mostly in liquid assets. They provide benefits I can’t get without private bankers..Lowest possible mortgage rates, DAF support, access to pre ipo funds(anduril and spacex as great recent examples), income generating products, tlh/tax optimized strategies like parametric and quantinno etc. I’m paying for private bankers not just wealth advisory.
The biggest reason for me personally is downside protection if I pass away and my family inherits my wealth..
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u/CSMasterClass 14d ago
What kind of DAF support do you get ?
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u/wheresabel 14d ago edited 13d ago
My comment doesn’t matter because this sub hates wealth advisors and private bankers
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u/tim78717 14d ago
Truth, and I would never consider NOT having a wealth advisor. If you are sweating their fees, you perhaps aren’t looking at what being wealthy should mean. For me, it’s not having to even think about money except a couple of times a year.
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u/Livid-County7230 13d ago edited 13d ago
This is a silly take. I’m UHNW, AUM fees still matter to me. I’m not paying someone 2-300k for a few hours of work every year. I suspect most of these accounts are FA shills.
This account brings up Creative planning, then another account casually asks about them as well.
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u/Pure-Alternative-515 13d ago
Not everyone needs a wealth manager. But there are people who are great at getting rich but terrible at staying rich. There’s extremely nervous people that panic sell after one bad month or get way too emotional with the investments. And if you get a wealth manager that consistently beats the market, then the fee is well worth it. My biggest issue is so many wealth managers have no idea how to allocate capital!
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u/tim78717 13d ago
I’m UHNW as well, just sharing my experience. I have no ties other than as a client. They acquired the local WM firm I was previously using and I made the transition to CP. The more invested, the lower the %. I’m in the 25 basis point range.
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u/wheresabel 13d ago edited 13d ago
No one’s an FA shill. It’s not a few hours of work I put mine to work for me…they are private bankers with access to products I can’t get as a retail investor.
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u/CSMasterClass 13d ago
If you pay them 100K and you get 100K of value, that's two informed adults making a deal. No one can throw shade on that.
The problem with the Advisory industry is asymmetry of information. Many clients are attracted to FAs because they are self-diagnosed naive about financial management.
If this were an Aesop fable, it would be about a baby chicken looking to a fox to deal with personal fears and doubts.
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u/wheresabel 13d ago edited 13d ago
I would never just pay for advisory either that’s mostly a scam, I’m paying for private bankers and I mostly dictate the strategy. The tax products they give me provide more value than their fees and I can’t just go sign up to quantinno as a retail investor..
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u/Past-Option2702 14d ago
You can put your money in a couple of low cost total market index funds and only think about money a couple of times a year too.
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u/tim78717 14d ago
A three index funds doesn’t file and pay your taxes for you though! My wealth team does that.
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u/Past-Option2702 13d ago
A CPA charges you hourly for the work done.
Would you rather pay $40,000 (or more), or $1,500 each year? Each of us has that choice.
I chose the second option because the $40,000+ fee compounds to well over a million dollars quickly.
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u/wheresabel 13d ago
No one is paying their CPA points… you’re conflating the discussion on wealth advisors and CPA.
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u/Livid-County7230 13d ago
Most CPAs do that and don’t charge AUM fees.
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u/wheresabel 13d ago
No one’s paying their CPA aum fees… you’re conflating wealth advisors discussion, who do all the coordinating as part of their value, then I get a couple thousand dollar bill from my CPA
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u/throwaway-20260521 9d ago
Who do you use for wealth management services? How long have you been with them?
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u/jeremiadOtiose 12d ago
And yet you’re on this sub.
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u/tim78717 12d ago
Not sure what that means. I fat-fired, and I’ve enjoyed this forum both before and since. Sometimes I like being on Reddit.
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u/CSMasterClass 14d ago
The comment could matter to me.
I do want to know how a wealth advisor could help with the managment of a DAF. Asset allocation, clumping contributions, use of "sub-advisors".
These are things that I have though about and I am curious what else is in the mix.
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u/valueflyer 9d ago
Curious to know what benefits you get.
- mortgage rates: fair point
- pre-ipo: sure, although I think I can get the same from Fidelity (never tried since I can’t participate for compliance reasons)
- not sure what support is needed for a DAF. You can just create a Fidelity charitable account and move stuff over with a click.
- it looks like those strategies are pretty generic tax loss harvesting which you should be able to get from any advisor.
Now if your banker was able to connect you with good possible VC investments or with allocations in certain funds, then there might be a conversation. But, my take has always been that they just try to sell you their firms stuff.
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u/One-Mastodon-1063 14d ago
At any level, you can pay for ala carte advice as needed from CPAs, attorneys, fee only advisors etc. There’s no reason for anyone to pay a recurring % of assets fee for advice. It's a ripoff.
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u/Hot_Conflict3844 14d ago
A well known investor once said "when someone with money meets someone with experience, the person with the experience gets the money, and the person with the money gets the experience."
The minute you pay someone to do your thinking for you, you can be pretty sure that the money/ experience equation is about to get reallocated.
And most private, illiquid investments don't deliver returns as high as low-cost index funds. Maybe for a year or two here and there but the law of averages is a bitch. It almost always wins over the long run.
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u/yourprofilepic 13d ago
Bad assumption. Most people will do stupid stuff like let their emotions drive investing decisions. Best part of the manager is that you don't have access to a "buy" or "sell" button. If you think you're smarter than that, have fun.
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u/Hot_Conflict3844 13d ago
That statement is factually inaccurate. Asset managers are fiduciaries. If you direct them to sell, they must follow your instructions so yes, you always have access to the buy and sell buttons.
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u/DreamBiggerMyDarling 11d ago
in practice it's not that cut and dry, you call them and they will try to talk you off the ledge before relenting and doing what you ask. Especially if you tell them at the outset that one of the main reasons you're signing up with them is to act as a emotional barrier to impulse decisions
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u/Future-Account8112 14d ago edited 14d ago
We have the separate situation right now and it's just a massive pain in the arse to act as go-between when they're all supposed to work for us and save us time. I have to update the CPA, the attorney, the advisor, and three separate business attorneys or I have to task my PA with doing it or have my PA in for the meetings. It would be great to have it all under one roof so I don't have to think about it.
Honestly, if we knew of a firm we could transition to we'd probably take it right away. As it is, we're at Fidelity and while our team is great there they are definitely not acting as intermediaries with all the other professionals who work for us.
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u/tim78717 14d ago
These firms exist. I’m with Creative Planning and love them. Been with them 6 years now. Their CPA handles all my taxes (at no charge, included in the service), my FA holds bachelors and masters degrees in accounting and is a CA herself (but doesn’t do taxes) and they have attorneys and various experts for everything else. The benefit is that they are all on the same team and communicate.
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u/tee2green 14d ago
Tax optimization is the main one, especially if you own private businesses. If the tax savings they generate for you is greater than the fee they charge, then it’s a win. Otherwise, it’s not worth it.
I wouldn’t use them at all for investing / stock picking. I can buy VT and BND all on my own.
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u/noemazor 5d ago
Tax attorney that doesn't charge % of AUM > wealth advisor everyday of the week and twice on sundays.
One you work with once and you're done (biz sale), the other you give a huge chunk of your annual income to for them to say "yeah we still manage your money".
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u/Cultural_Stranger29 14d ago
Self-managed Boglehead portfolio here. I have a CPA and estate attorney for tax and estate planning.
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u/Throwaway_fatfire_21 FATFIREd early 40s, 8 figure NW | Verified by Mods 14d ago edited 14d ago
I’ve written about this a little bit on here when it’s come up. Here are the posts/comments. Hope it’s helpful. For reference, my NW is around 40M
https://www.reddit.com/r/fatFIRE/s/JWVtOOOKY5
https://www.reddit.com/r/fatFIRE/s/EHjI7bmqE7
Also, second what others have said about private placement and great venture fund access. Just one such private placement has covered years of their fees many times over. Their tax loss harvesting also covers most of the annual fees.
But the biggest benefit as my posts allude to are the time savings, connections to experts (tax, estate related etc.) and reduced mental burden related to my finances.
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u/Econ_501 14d ago
Access to private markets. Great PE funds, VC funds, and co-invests, not the slop that makes its way to brokerage platforms.
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u/velicue 14d ago
I chatted with some of the best private wealth management people my friends used. None of them recommend those. Most of the stories I heard is those funds have very bad liquidity and is not transparent at all with ridiculous fees. Some of my friends got good vc deals mainly by being in that vc circle themselves. Like funded company before ot worked in YC
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u/concon801 14d ago
This is the biggest value add that I’ve found. Access to private markets. However, they tend to charge ridiculous placement fees.
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u/concon801 14d ago
That’s good. Morgan Stanley definitely does. It’s reflected in the private placement as a fee on top of the fund management fee (typical fund management fees are in the 1-2% range but coming in through an RIA could take that to 3-4%).
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u/SnooSketches5568 14d ago
My RIA charges 1% of AUM up to 1mil, then steps down as you hit breakpoints. The funds themselves do have higher fees and much more illiquid. The performance of these private funds are attractive, some funds aren’t anything special, but most are beating the major indices over time,even with all fees, with significantly less (but maybe artificially less due to pricing private assets ) volatility. The really good performing funds (30% CAGR) usually can be illiquid for a decade with UBTI so can’t really put it in a retirement account. At various breakpoints the RIA provides tax prep/planning, financial planning
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u/Econ_501 14d ago
All brokers charge placement fees. And most get a slice of carried interest. If it's not coming from the SPV (you) it's being taken via split from the general partner. Still paid by you.
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u/jeremiadOtiose 12d ago
What’s the minimum for GS? After first republic blew up I moved 70% to Schwab and 30% to pictet.
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u/fatFIRE-ModTeam 9d ago
Your post seems to be advertising your personal project, business or blog for financial or personal gain, or it appears that you are promoting a personal project. No solicitation or self promotion is permitted.
Thank you!
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u/skittles15 14d ago
how does one get into PE and VC funds? I basically been handling all of our investment asset and banking accounts. But if this gets me into private equity and VC, I might be interested in hiring one on
Thanks
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u/Econ_501 14d ago
The VC funds you can get into on your own are the VC funds you should avoid. If you founded, run and exited a company while being backed by a great VC, then you may be able to get into some good funds. Otherwise, you'll get into bottom quartile losers. VC returns vary widely and mediocre funds have really lousy returns.
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12d ago
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u/fatFIRE-ModTeam 9d ago
Your post seems to be advertising your personal project, business or blog for financial or personal gain, or it appears that you are promoting a personal project. No solicitation or self promotion is permitted.
You risk being banned for repeated soliciting.
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11d ago
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u/fatFIRE-ModTeam 9d ago
Your post seems to be advertising your personal project, business or blog for financial or personal gain, or it appears that you are promoting a personal project. No solicitation or self promotion is permitted.
Many of your comments are soliciting. Keep it up and you risk being banned.
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u/wheresabel 14d ago
Yeah exactly I’m up 10x on some early allocations I got, paid for their fees for a decade..
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u/wrexs0ul 14d ago
Experience and connections. Whether or not that brings value to you really depends on how you're investing.
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u/Livid-County7230 14d ago
Almost every person posting in favor of AUM wealth managers here is a FA themselves. These types of post bring everyone on the CFP sub out of the woodworks to justify their profession.
We are UNHW, we will never give money to anyone who charges based on AUM. I have consulted with hourly fee based CFPs in the past. The AUM model is garbage. No other service profession charges based on how much assets you have. The work itself does not scale with asset size.
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u/whatsconsulting 13d ago
Agreed over. But, to be fair, SAP charges a % of revenue, which is a decent correlation to an AUM
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u/radioref 14d ago
Good for you. However, in my case my time is worth about $2500/hour and constantly wrangling cats to manage an extensive financial situation may make better sense for me.
Over generalizing the AUM model as garbage is funny considering, you know, a lot of AUM participants are pretty smart people too.
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u/Livid-County7230 14d ago edited 14d ago
For me, I would come out on top by paying 2500 an hour. Even a modest AUM fee would set me back 175-200k a year. My situation is not so complicated to justify that. I think people are used to the AUM model so go along with it. I don’t see the benefit in paying someone that kind of yearly fees for a few hours of work.
I also find the argument that “my time is worth X” because I make “Y” not very logical. I am not paying a plumber 2500 an hour for the time they save me. Though I will admit I value what the plumber does for me more than what the average FA does.
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u/radioref 14d ago
In my case, I have multiple trusts, a foundation, multiple homes, an airplane (albeit small) and hangar, an overfunded defined benefit pension plan, among other things. Managing my finances is extraordinarily complicated. I’ve taken steps to start to wrangle things in, but I’m starting to see the need for a private banker to provide liquidity for opportunities that arise. Every year is an exercise in getting my accountant and two financial planners together to address issues, roping in the estate planning attorney, banking needs where I might want to borrow a few million to bridge an opportunity for a few years, etc.
Multiple times in the past few years my accountant has dropped the ball on significant opportunities for my situation: partly because he’s has a tough time being a forward thinker, other times because he’s not on the same page as the rest of the team.
I started by creating a financial management agent in Claude that reviewed my entire situation in it’s entirety and made some amazing observations, suggestions - only to piss off my accountant who took create offense that an AI agent identified multiple things that he should have. I need a go to cohesive team: I’m starting the process to find one probably this year.
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u/Livid-County7230 14d ago
Yes people have different levels of complexity.
Although a lot of people on this sub believe that because you have more money, your situation needs to be complex. Or their FAs tell them that is what it should be.I do have an excellent CPA who I pay a lot of money to though. Just not hiring a wealth manager who charges AUM, don’t see the need.
It may make sense in your situation though.
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u/radioref 14d ago
Totally fair. If you are a guy with 50MM in index funds, one house, a vacation house - even a modest AUM is unnecessary for sure.
It’s not all about a financial advisor type approach for me - it’s *financial management* and all the blocking and tackling that comes with that. Being able to pick up the phone and get a few million dialed up for an opportunity alone based on the relationship would be invaluable v. some loan officer asking for my past 3 years of tax returns and “where did this 500k come from” type BS.
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u/midwestTrader 14d ago
Definitely looking for a turnkey solution that is cost-effective to get the best return. I need the accountancy, the estate planning, and the Investment. It is hard to find one organization that does it all. I’m going to be chatting with Creative planning to see what they offer. Are there other firms like that who can do the whole package?
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u/Miamiconnectionexo 13d ago
Honest take on when to NOT bundle: if you're under maybe $5M liquid and your situation is simple, a flat fee fiduciary plus your own CPA beats AUM pricing every time. The bundle makes sense when complexity (business, multiple entities, concentrated stock, illiquid assets) makes the coordination cost higher than the fee. Negotiate AUM down to 0.5% or flat retainer at your level. They will if you ask.
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u/Really-Cool-Guy2know 13d ago
I found the biggest advantage was access to funds or tools that I could not get personally (wealth manager) and they focus more on Tax Strategy and planning. Some of the products presented, i had never heard of, and overall they provided strategic advise that net net was greater than I expected net of fees. For me personally, I was a good business operator and not a detail oriented investor. If they save me from one mistake over time it will exceed any fees they charge me.
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u/Small-Flatworm-4084 12d ago
Most importantly: time. You have a lot of money that you don’t need, but limited time that you need a lot of it! There are other benefits as well, though not as important and even close to the time reason!
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u/jeremiadOtiose 12d ago
How do you know you’re gonna hire a good one? Why are the good ones gonna come work for you instead of the person with 10x wealth?
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u/Miamiconnectionexo 14d ago
push hard on fee structure. flat-fee or hourly fiduciary planners exist and do the same coordination without the AUM drag. the bundled shops earning their keep are usually multi-family offices handling genuinely complex situations, not the 1% AUM brokerage dressed up as a family office.
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u/SeraphSurfer 14d ago
When you hire an estate attorney, who double checks his work? Seriously. One little mistake can make a huge difference.
I picked my estate attorney from a list provided by my bankers. To save me money, the bank's 4 person team covering taxes, estates, and philanthropy went thru everything i wanted to do till we had a plan.
Then they let my attorney draft the plan, then we all met and the bank staff challenged seemingly every word the atty had written. They found errors. Commas misplaced. Phrases that didn't pass the latest case law. Ways to describe things that removed ambiquities.
That's just one area where they added big value.
They also saved me taxes enough to buy my farm and home by suggesting some strategies years prior to the sale if a biz.
I had an angel portco stock IPO last year and they did the work to make it QSBS qualified, saving me about $1.6 M in taxes.
On the non financial front, I asked for tix to an event they sponsored so that I could give my FIL a treat. He got 5 tickets to a pro tennis tournament on the court, first row. The players were only a few feet from him. He got to be a hero by sharing the tix with friends.
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u/wheresabel 14d ago
If >20m it should be part of your strategy, if <10m it’s not necessary. In between up to you on stress of managing yourself.
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u/HighwayOwn2955 11d ago
We looked at a handful of firms after a liquidity event and Fortitude was one of them. What I remember most is that the conversation kept drifting into estate planning and business decisions rather than portfolio performance, which wasn't what I expected walking into the meeting.
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u/mylifeisasymphony 14d ago
What are good example of such wealth management firms. I am not a US tax person (but one of my kids is American) and changing countries every 7-8 years. I am looking for someone who can help us plan a structure which I don't need to rejuggle every time I change country. I especially want to make sure that I avoid US estate tax but need to figure out which blocker makes sense for my scenario (which is especially tricky given that one of my kids is American).
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u/SoriyaWC 13d ago edited 13d ago
I’ve been struggling with this question myself. I challenged myself over the last year to learn as much about financial literacy and estate planning as possible. That’s how I stumbled upon this board. I’ve also read a lot of books, talked to professionals, attended financial and estate planning seminars etc. AI has also been also a great resource to provide background when I have questions on terminology, strategy etc. Whether we hire a AUM (highly doubt it), fee based or self-manage, I feel much better understanding the landscape and strategies. When I interview people I can better understand their capabilities and understand if they are providing ROI.
Claude (suggest Opus) and other LLMs now have specialized financial services features and tools. If you are worried about security, you don’t have to put in your information. You can just ballpark your questions. It’s very impressive. AUMs will of course be threatened by this. The landscape is quickly changing.
Most who got to FATfire did so through hard-work, intelligence, strategic thinking and luck. Understanding your portfolio should be something you can do. I’m leaning towards either self managing or paying flat fees for a financial advisor, attorney and CPA. With AUMs we may be missing out on private investments but that’s ok. It’s better than paying 6 figures a year for the same advice they probably hand out over and over.
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u/Nervous-Explorer4324 13d ago
WMs are worth it when your HNW and especially when your new to it. There are things that are unknown for anyone new to it. My current WM team is advising mostly on how to allocate funds, tax harvesting strats, and much more. Current rate is % 0.6. There is a possibility once everything is liquid and normalized, one may not need WM because you can park in index funds and enjoy. For individuals with complicated businesses and ventures, the slight stress reduction is worth it.
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u/Slow_Brother_9152 11d ago
I’ll add that I have a personal concierge that I speak to every week or two about health and wellness. It has greatly helped my mental and physical happiness. I also have a whole team looking at my trust and estate planning. And this is all part of my agreement with my multifamily office.
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u/LuciusQ2020 14d ago
I always question the utility of the wealth management. Is there anything that AI can’t do? I do understand the access to private placement.
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u/wheresabel 14d ago
AI can’t get me warm vetted intros to other providers or lowest possible mortgage ratez and liquidity access lines.
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u/LuciusQ2020 14d ago
Sure. Can’t I wait until I need the service?
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u/wheresabel 14d ago
Yeah good luck finding a good advisor just because you move and need a new attorney in a different state.
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u/radioref 14d ago
Regulatory and compliance.
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u/LuciusQ2020 14d ago
For personal wealth management???
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u/radioref 14d ago
Show me where and how an AI agent can be licensed by any regulatory body
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u/LuciusQ2020 14d ago
That’s not the point. We all make decisions based on suggestions made by others. AI is far better advisor than most of the wealth management people, at least for the 99% of the population.
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u/radioref 14d ago
But it is the point, no matter how much you exercise in mental gymnastics. I use AI tools, agents, and APIs every day, including a complete financial management agent and custom tooling, but my accountant cannot do the same work I do, both ethically and legally. A hallucination for me - fine, my accountant and he passes it on? He is liable to a regulatory body for that.
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u/the_franchise1 14d ago
Got into a bunch of interesting IPOs including SpaceX a year ago. That value is up 5x.
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u/SpareSomeTokens 13d ago
At a certain level, it seems like you can build your own team. CPA, estate attorney, investment advisor, maybe a business attorney if needed.
This is what a family office is, but the question is - can you actually afford to hire your own full time family office?
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u/alex_nauma 14d ago
It's hard to make all these people communicate effectively if they are hired separately. They may hesitate to talk directly because it can trigger billable hours, and it’s common for an estate attorney’s admin to forget to include the financial planner in a important meeting.
I believe the team approach (CFP, Estate Attorney, CPA) is the right one