(M/23) Inheriting $400,000, what should I do with the money? (8 Month UPDATE)

[adebola]

@maeflower Definitely get a 2nd opinion, shop around and ask straight up what their trailing fees are for investment recommendations provided. Very few are cost per session or on a time basis, so what they recommend to you may have a fat % trailing fee which comes out of your money, ongoing for years down the track since your most recent meeting. This is often in addition to the fees of the fund itself. Now this is not exactly against this model, people have to be paid somehow for their work, yet it helps demist any well done sales pitches. Just they may not have put in as much effort and just happen to be connected to a strong product.

 

[nurseir]

@maeflower Damn shame you didn't / weren't able to listen to /@salita in your original post.

50% BITCOIN, 50% SMALL-CAP STOCKS ON THE ASX.

You would have looked like a genius today. Maybe not tomorrow, but today...

 

[maeflower]

@nurseir I do remember seeing this... hopfully someone was taking notes!

 

[samm831]

@maeflower There's probably no immediate need to pull the money out of the testamentary trust (you may find that the deceased left some openings on what you can do with the assets inside the trust). This would give you a bit of that "prenup"...

With the fin. planner's fee. Pay attention to what you'll be put in. My money's on your allocation to be put in managed funds, which surprise surprise have their own fees (ranging from 0.5% to 2% generally).

Things you should also be considering are: tax and insurance.

 

[danil999]

@maeflower how much is the financiual planner charging?

 

[maeflower]

@danil999 Currently, I've paid him $500 to prepare a statement of advise which includes all data collection, personalised advice, strategy planning, detailed design & calculations, tax calculations, etc.

Then, if I was to move forward with this advise, he then charges an on-going fee of 0.66% p/a.

 

[danil999]

@maeflower

Then, if I was to move forward with this advise, he then charges an on-going fee of 0.66% p/a.

haha, he is fucking you

 

[alyblake]

@danil999 A little harsh I would say! While I don't believe in Asset Based fees, 0.66% is below the industry standard 1%.

No fee is too high, only the value too low. If OP is paying 0.66% and getting all the help he needs to meet his goals which he isn't capable of doing by himself, then that's 0.66% very well spent!

 

[danil999]

@alyblake fair points

 

[extraordinary]

@danil999 So for every million dollars the fee will be $6,600? That sounds reasonable to me.

 

[wowdarling]

@maeflower That ongoing fee is going to bite.

 

[maeflower]

@wowdarling Yeah, I've relised... but would you think it's worth it considering I'm not quite competent enough to invest in shares on my own just yet?

 

[wowdarling]

@maeflower that ongoing fee is over $2500/year (possibly tax-deductible, but still). I suggest you reassess at the end of 12 months whether you derived any value from it, given you already have a statement of advice prepared, and could probably get another one each year for about the same price.

 

[anna1234]

@wowdarling OP said he doesn't plan on investing the full inheritance with the planner so it won't be a full $2,500 per annum. With that in mind, I would say 0.66% is pretty fair for ongoing service/review, assuming the planner provides auxiliary services and advice, and doesn't charge extra one-off fees for any further advice.

In any case, if OP is unhappy with the planner at any point in time, he can just terminate the adviser service fee.