Are wealth managers valuable to Gen Z and Millennial DIY’ers

[flowful]

@mark45 They're worth it in general if

1) you have money to manage

And

2) You don't have the time or effort necessary to learn about managing it yourself.

Gen Z and Millennials don't really have either 1) or 2) in most cases.

 

[fl269fl269]

@mark45 You will probably do better using the investment recommendations in r/bogleheads. The fees for a wealth manager will really sap portfolio returns over many years. For young folks I recommend having 80% of capital invested following a simple index fund asset allocation model.

For the rest (not more than 20%) get very aggressive with crypto, single stocks, alternative investments, etc. Go crazy and try for the huge win. If the 20% goes to zero, big deal. You have many years to get it back.

 

[gregoryabby16]

@mark45 I think you hire a manger when you dont know what youre doing, cant control your emotions, or dont want to deal with it. None of these things apply to you and your friend so its natural for you to self-manage. I do as well and I simply view it as all funny money until I'm retired whether thats tomorrow or in 30 years.

 

[brknight]

@mark45 No they never were valuable to any generation.

 

[balkan]

@mark45 Taxes.

Wealth managers that charge you a % is worthless as they’re not going to beat the sp500 every year. With that said some do charge a flat fee and it could be worth it if they can advise you with lowering tax liability with how you manage your money.

However I wouldn’t consider a professional until I hit the 5 million liquid mark. 2 million+ could be 3/4 real estate holding in California. No need for a professional there.

 

[peabody]

@balkan The goal rarely if ever is asking simply to beat the S&P for most.

 

[interventionist]

@mark45 No.

Betterment has .25% fees and does fine. SP500 will beat just about any wealth management. Why would I pay some person when they've been AI'd out of the job and I can pay betterment .25% to do better than they would do anyway? (Vanguard pay structure is about the same, but it's more complicated in terms of net assets and blah blah blah, but flip a coin. Not trying to advertise for betterment, but they're the ones i used to use so i know them a bit).

 

[joegoldbergswifey]

@interventionist Depends where that money is likely in a taxable which means your SP500 has done great now you owe uncle Sam a huge bag one day. What does betterment do about active tax management of the portfolio? Any taxable gains at a high income level is going to be 35-40% taxed on gains.

 

[momonthego]

@mark45 I could write a long comment but it really boils down to this:

Do you need help with this? If so, get help. It will cost money but will probably be worth it.

Do you not need help? Then don’t pay for help. It will never be worth it.

I foresee with AI and improving tech that DIY will continue to get easier and easier for those willing to go that route.

But also, there will always be people, companies, institutions who need help with these things.

I think Redditors underestimate the number of people who just don’t want to learn about investing, taxes, tax-advantaged accounts, retirement planning (especially for those without pensions), estate planning, etc.

It’s easy to imagine a world where everyone just follows Bogleheads and gets rich but I don’t think that’s how it works

 

[resjudicata]

@mark45 I'm a big DIY person myself but I still pay for some of my portfolio to be handled by a wealth manager. I'm also a self-made high-net family.

Approximately 40% of my portfolio is handled by a wealth manager in Fidelity's SMA. I use them for wealth structuring, financial planning, and cash investments. I pay ~0.4% annually, which is a fee that's lower than most aggressive indexes.

In my opinion, as you grow your wealth, you need to find people to partner with so you're not doing everything yourself. Property managers, business managers, wealth managers, all help you manage your revenue streams and assist with your efforts.