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>So what is the amateur person worth $25M to do today? As with all things, you should seek professional advice. There are many nuances of tax efficiency, estate

>So what is the amateur person worth $25M to do today? As with all things, you should seek professional advice. There are many nuances of tax efficiency, estate efficiency, asset protection, personal needs, etc. that a professional advisor should guide you through. While this is true, the problem that most advisors that a $25MM net worth individual has access to are mostly duds and/or salesmen. Identifying true value add advisors is easier said than done, imo.

deleted 12y ago
[deleted]
encoderer 12y ago
Personally, i think that's more of a problem for the guy with the $500k retirement account. You will have no shortage of white gloved managers eager to help you invest your $25M. But anything short of $1MM you're solidly in Edward Jones territory. At that point you're probably better off keeping it stuffed under your mattress. If you're not a multi millionare, IMO it's worth the time to learn how to manage your own money. Because nobody will ever care as much about your money as you will. A good place to start IMO is by subscribing to the TastyTrade podcast. It's the only investing infotainment I've found that treats the listener like an adult and an equal.
- hkmurakami 12y ago
  IMHO, the quality of people you will find at your local retail branch of an ibank (think BoAML, JPMChase, WF/Wachovia, etc.) is still very shoddy and suspect. These are the channels that people have immediate access to and think of visiting, even if you have $25MM. For these retail operations, iirc the threshold is $50MM before you are shipped off to a proper PWM team at HQ. >You will have no shortage of white gloved managers eager to help you invest your $25M. How do you know which while gloved manager is actually any good though, assuming that the $25MM guy is quite naive about investment management? I believe that the small time millionaire must be up to speed on investing basics just as much as the $500k guy, in order to be able to discern the competence of his managers. I generally agree with jhulla's advice of going through a good estate planning attorney or accountant to find decent people. If you have a network of rich friends (which you can probably make in a few years after making your $25MM by plugging yourself into the right circles), but barring this (or even if you do manage this), I insist that even the rich guy needs to know at least the basics.
  - bradleyjg 12y ago
    At a minimum you should get a "fee only" adviser who has a fiduciary duty to you. You can still get bad advice, but at least you won't get corrupt advice.
    - hkmurakami 12y ago
      I have seen very corrupt fee only estate planning advisors. This is unfortunately still not fool proof.
      - jrs235 12y ago
        Can you please explain how one of the corrupt fee only advisors situations worked?
        tome 12y ago
        Perhaps kickbacks?
jhulla 12y ago
You need a good estate planning attorney (ask rich friends), and a good accountant (ask rich friends), and a good financial advisor. Of these three, if you believe in MPT, the financial advisor is simply a coin-operated sales guy. At a 1% fee against $25 million, your business represents $250K/yearly. That is a solid sum of money to any business. But practically speaking, what is that financial advisor going to sell you? Odds are after you get past the glossy color printed custom, just-for-you, spiral bound investment plan, you will see a custom portfolio that will be assembled with MPT. This is the product that sell every day to every other $25 millionaire that walks in the door. Sure, you get to tune the outcome based on your risk threshold, or other biases you may have. But unless you are rolling your own investment strategy based on your own perception of future returns across asset classes (in other words running your own micro-hedge fund) you are buying MPT. Are there managers and funds that beat everyone else year in and year out. Yes there are. Why don't you get the chance to park your $25 million with them? Because even the choice of parking your funds with them is bound by the math of MPT.
- hkmurakami 12y ago
  >Ask rich friends Agreed. This is the only thing I could come up with that would reasonably ensure that I would be talking to someone decent. Offtopic, but it is my belief that one of the strong factors in the perpetuation of wealth and associated wealth disparities in society is exactly this kind of information and knowledge asymmetry in the population, from access to the best advice (networks or simply the funds to gain access) to the osmosis-like uptake of information throughout one's childhood when raised in an affluent family/neighborhood/environment. >the financial advisor is simply a coin-operated sales guy Agreed. this is absolutely the mindset I tell all my friends to adopt, and to not be mislead by the title of "advisor", since they are anything but. >Odds are after you get past the glossy color printed custom, just-for-you, spiral bound investment plan, you will see a custom portfolio that will be assembled with MPT. Partially agreed. Most of the time, I agree that what will be pitched is a cookie cutter MPT set of assets/funds that, while often of somewhat marginally unideal quality, will generally get the job done. However, I have* seen and heard of absolutely horrible plans being thrown at naive new wealth people, and while "odds are" (as you say) this won't happen to you, it's still a non-neglible probability that you get wrapped up with some truly sleazy operations. That being said, your average American PWM firm/team/branch isn't likely to totally come after you like this. I think this is more likely to happen in Asia or Asian firms in the west.

deleted 12y ago

[deleted]

encoderer 12y ago

Personally, i think that's more of a problem for the guy with the $500k retirement account. You will have no shortage of white gloved managers eager to help you invest your $25M. But anything short of $1MM you're solidly in Edward Jones territory. At that point you're probably better off keeping it stuffed under your mattress. If you're not a multi millionare, IMO it's worth the time to learn how to manage your own money. Because nobody will ever care as much about your money as you will. A good place to start IMO is by subscribing to the TastyTrade podcast. It's the only investing infotainment I've found that treats the listener like an adult and an equal.

hkmurakami 12y ago
IMHO, the quality of people you will find at your local retail branch of an ibank (think BoAML, JPMChase, WF/Wachovia, etc.) is still very shoddy and suspect. These are the channels that people have immediate access to and think of visiting, even if you have $25MM. For these retail operations, iirc the threshold is $50MM before you are shipped off to a proper PWM team at HQ. >You will have no shortage of white gloved managers eager to help you invest your $25M. How do you know which while gloved manager is actually any good though, assuming that the $25MM guy is quite naive about investment management? I believe that the small time millionaire must be up to speed on investing basics just as much as the $500k guy, in order to be able to discern the competence of his managers. I generally agree with jhulla's advice of going through a good estate planning attorney or accountant to find decent people. If you have a network of rich friends (which you can probably make in a few years after making your $25MM by plugging yourself into the right circles), but barring this (or even if you do manage this), I insist that even the rich guy needs to know at least the basics.
- bradleyjg 12y ago
  At a minimum you should get a "fee only" adviser who has a fiduciary duty to you. You can still get bad advice, but at least you won't get corrupt advice.
  - hkmurakami 12y ago
    I have seen very corrupt fee only estate planning advisors. This is unfortunately still not fool proof.
    - jrs235 12y ago
      Can you please explain how one of the corrupt fee only advisors situations worked?
      - tome 12y ago
        Perhaps kickbacks?

jhulla 12y ago

You need a good estate planning attorney (ask rich friends), and a good accountant (ask rich friends), and a good financial advisor. Of these three, if you believe in MPT, the financial advisor is simply a coin-operated sales guy. At a 1% fee against $25 million, your business represents $250K/yearly. That is a solid sum of money to any business. But practically speaking, what is that financial advisor going to sell you? Odds are after you get past the glossy color printed custom, just-for-you, spiral bound investment plan, you will see a custom portfolio that will be assembled with MPT. This is the product that sell every day to every other $25 millionaire that walks in the door. Sure, you get to tune the outcome based on your risk threshold, or other biases you may have. But unless you are rolling your own investment strategy based on your own perception of future returns across asset classes (in other words running your own micro-hedge fund) you are buying MPT. Are there managers and funds that beat everyone else year in and year out. Yes there are. Why don't you get the chance to park your $25 million with them? Because even the choice of parking your funds with them is bound by the math of MPT.

hkmurakami 12y ago
>Ask rich friends Agreed. This is the only thing I could come up with that would reasonably ensure that I would be talking to someone decent. Offtopic, but it is my belief that one of the strong factors in the perpetuation of wealth and associated wealth disparities in society is exactly this kind of information and knowledge asymmetry in the population, from access to the best advice (networks or simply the funds to gain access) to the osmosis-like uptake of information throughout one's childhood when raised in an affluent family/neighborhood/environment. >the financial advisor is simply a coin-operated sales guy Agreed. this is absolutely the mindset I tell all my friends to adopt, and to not be mislead by the title of "advisor", since they are anything but. >Odds are after you get past the glossy color printed custom, just-for-you, spiral bound investment plan, you will see a custom portfolio that will be assembled with MPT. Partially agreed. Most of the time, I agree that what will be pitched is a cookie cutter MPT set of assets/funds that, while often of somewhat marginally unideal quality, will generally get the job done. However, I have* seen and heard of absolutely horrible plans being thrown at naive new wealth people, and while "odds are" (as you say) this won't happen to you, it's still a non-neglible probability that you get wrapped up with some truly sleazy operations. That being said, your average American PWM firm/team/branch isn't likely to totally come after you like this. I think this is more likely to happen in Asia or Asian firms in the west.