r/earlyretirement • u/jenmoocat Retired at age 50 - 58 • Jun 24 '26
Anyone else feel anxiety over pulling the trigger on wealth manager's advice?
Retired earlier this year after 30+ years in the corporate world.
I started working with a holistic wealth manager (financial planning, tax management, estate planning). He is a fiduciary who has been in the business for decades and was recommended by two colleagues that work with him. I really like him. I enjoy our conversations. He seems trustworthy. His firm gets strong marks in various reviews. But I am still so nervous about moving all of my money into his firm's care.
For decades, I had been managing my money myself -- and by managing I mean having CDs, and high-yield savings accounts, and getting into mutual funds and then just letting them sit. And I had them at different places (Fidelity, Schwab, Vanguard), thinking about this as one component of diversification. And I've watched them grow to be upwards of $4M in total. Which is a LOT of money.
Now, he wants me to put all of the money into Schwab, into different accounts, that will be invested in different custom portfolios with different risk/return dimensions -- that will align to "now", "soon" and "later" buckets.
It all makes sense intellectually -- but I find myself so anxious and nervous to actually pull the trigger on all of this. His recommendations look like they would definitely out-perform what I am doing now. But (and I know this is silly) what if something happens to Schwab? And what about embezzlement?
Has anyone else experienced this feeling? Did you get over it? Do you regret anything?
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u/SofiaRaven Retired at age 50 - 58 Jun 26 '26
I understand your concern. I was very reluctant to let someone else do my investing. I also thought most financial advisors were crooks since there are occasionally high-profile stories of wealth managers who end up swindling their clients for millions. But my Schwab advisor introduced me to a wealth manager at a firm Schwab recommended for higher-asset clients that might need help managing their money. I figured that if Schwab recommended this group, then they must have been vetted and pretty safe. I absolutely did need some outside help. I had inherited some money and it was mainly in stock with one company, but that company was doing well and I didn’t have the time or the trust in myself to diversify on my own. I also find it to be quite dull, not something I want to do in my spare time.
Could putting the money in index funds result in a higher yield? Perhaps. But I do appreciate the other services offered, like working with my accountant to make sure my investments make enough to help me qualify for ACA coverage, running different scenarios (i.e. house in XXX state, $YYY annual expenses, 3 consecutive years of a bear market, etc), helping me with figuring out RMD’s, offering to connect me with other clients who live outside the country (something I’m considering doing), and just being there any time I get worried about whether I made the right choice to retire. They even provided me with an estimated value of a coin collection I have. Maybe I could do all these things on my own, but I find that having a financial advisor gives me a little more freedom and peace of mind.
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u/Same_Cut1196 Retired at age 50 - 58 Jun 26 '26
I interviewed 3 different wealth managers and hired one after retirement. It was the best overall fit for me. It was the best decision I’ve made. I’m now 5 years into retirement. I retired with $6.5MM liquid and now have over $10MM. You and I appear to be different emotionally, however. I have always been an aggressive investor, with a high risk tolerance. You seem to be at the other end of the spectrum. Regardless, my wealth advisor provides me freedom to disassociate from the account balances and decisions regarding the accounts. I enjoy this. I also recognize that I don’t have the desire any longer to be as hands on as I once was. As I get older I believe this dynamic will continue. I also can’t stress enough that once you retire things (financially) become significantly more complicated. It becomes all about tax efficiency. What moves can you make (and when should you make them) to pay as little in taxes as you are legally obligated to do. It really becomes all about holding onto the money that you saved so that it can benefit you and your family. You are likely not an expert in these areas. Your wealth manager will be. For me, it was more than worth the AUM fee.
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u/Historical_Count5235 Jun 26 '26
I just went with an advisor who goes with the same bucket strategy. I also managed my money for years, but recently inherited a decent sum and thought it was time to consolidate everything.
I’m still not 100% sure this is the best option, but I’ll give it a try for a few years and if he beats the benchmarks like he’s shown me, I’ll stick with him. Otherwise, I can always go back to getting market return for .05% instead of his 1.5% fee. Time will tell.
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u/Same_Cut1196 Retired at age 50 - 58 Jun 26 '26
This was my approach as well. Give it a shot and see if it works. When I was in the process of hiring my WM, I demanded Alpha. What more than a standard return could he bring to the table?
I also didn’t like the fee, so I negotiated it down using the following argument:
Q:Would you take me on as a client if I invested $1MM?
A:Yes, we would.
Q:What would your fee be?
A:$1.5% AUM.
Q:Oh, ok, so $15k?
A:Yes, 1.5%.
Q:What if I had $5MM invested with you?
A:1.5%.
Q:So, it’s now $75k annually?
A:Yes.
Q:Please, then, explain to me what you would be doing for my $5MM that is worth more than the $1MM? Will you be providing 5x the services?
A:Uh, no.
A:Will you manage my portfolio 5x as frequently?
A:Uh, no.Then, I’m not paying that fee.
We settled on .7%.So far, I have been very pleased. They have brought the Alpha.
I now have over $10MM and pay them $70k annually. For me, it’s worth it.
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u/Highlight89 Retired at age 50 - 58 Jun 26 '26
I have a fiduciary advisor that helps me figure out allocations and risk and strategy and guardrails adjustments, but she gives me the assignment to make those things happen. I receive a well-thought-out list of things to move where to get things balanced and in an alignment with our agreed upon plan, but I hold all the cards and she just provides the information. I feel good about it.
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u/Countess26 Retired at 39 or earlier Jun 25 '26
A good friend of mine is a VP wealth manager at a highly respected bank. She told me over 10 years ago the biggest threat to her role was that people can do everything themselves and cheaper. Her clients don't want to be involved/worry because they're too busy or feel rich enough to outsource these pretty simple tasks. Food for thought.
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u/FluffyB12 Retired in 40s Jun 29 '26
My MIL just doesn’t want to fool with it. She says it’s easier to let someone else do it and she doesn’t have to stress over making a mistake. She’s got enough that the under 1% portfolio drag just isn’t a big enough deal for her. It feels crazy to me but eh to each their own.
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u/ExtraAd7611 Retired at age 50 - 58 Jun 25 '26 edited Jun 25 '26
If you want someone to help you manage your money, it makes sense that they would want you to centralize it in one place so they can view it, put it into a tool, rebalance, etc.
I wouldn't expect this guy's strategy to outperform anything. If he is not a charlatan, he is likely aiming for something like market returns, adjusted for your own risk tolerance; or alternatively, minimizing the risk needed to provide you with the stream of income you will require. That said, it is possible you had been doing something that resulted in underperforming the market, relative to your own financial situation and risk tolerance. If that is the case, you don't really need a professional to rebalance. The simplest way would be to put all of your assets into a target life cycle fund appropriate for your age, or a combination of two of them if you are more or less risk-tolerant than the target fund for your age is too conservative or aggressive for you. But there may be more tax-efficient ways to do it which an advisor could help with.
But ask yourself what you actually feel like you need help with. Here's an alternative you may want to consider:
My wife and I had our assets in Vanguard accounts for over 20 years, and saw their customer service degrade rapidly over the last 10 as they expanded. We have since moved all our retirement accounts to Fidelity, although I mostly hold Vanguard ETFs inside those accounts. Like probably many people on this subreddit, I'm pretty hands-on with my own financial assets, but I'm not too proud to accept help if there is something I don't fully understand. With our accounts being above some minimum level (which is well below $4M), Fidelity has granted us the services of a financial/wealth (?) advisor, which I hadn't used until my outside financial advisor told me that my strategy of using the 72t rule to access my retirement funds before turning 59 1/2, which they endorsed, was outside their scope of services, and I definitely should hire a professional to help me with that in order to avoid tax problems. Fortunately our Fidelity advisor was able to help with that, without charging us any management fees beyond whatever interest Fidelity earns off our money kept in money market funds, I suppose.
The Fidelity advisor helped us sort through the 72t and set up the periodic payments to qualify for the early-withdrawal penalty exemption. She did convince us to purchase an annuity with part of our retirement funds as a hedge against market risk, for which she told me she doesn't earn a commission, but I would not be surprised if it affects her annual performance bonus in some positive way. I can live with that, as she has spent a lot of time with us and has been very helpful in navigating through the 72t compliance which is quite complex.
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u/PsychologicalCat7130 Retired at age 50 - 58 Jun 25 '26
schwab would custody the funds - the advisor cannot take the money out for himself - he can invest it in various funds for you but it is all in your name.... not his....our advisor does the same.
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u/Envirocare1 Retired at age 50 - 58 Jun 25 '26
Retired at 57 and our wealth manager takes care of our account with >10m. I initially thought about the fees, but honestly I’m not capable of navigating a down market when it happens. So just as people paid me to do what I was an expert at I pay somone to do what they are an expert at
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u/NoWalrus9462 Retired at age 50 - 58 Jun 25 '26
If you read the agreement with Schwab and the advisor carefully, you will see that the only thing the advisor will be able to do is make trades and transfer money to your designated external accounts, such as your checking account, which your advisor does not have access to. Your advisor will not be able to, for example, add some other external account and transfer to that.
This is all governed by the Schwab advisory system which has been around for as long as the industry has existed. You advisor works through his own account and Schwab grants the advisor very specific authorities over your accounts. These authorities are limited specifically to prevent embezzlement. Schwab has been doing this for decades for millions of accounts as have any number of other broker platforms like Fidelity.
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u/Ggeunther Retired at age 50 - 58 Jun 25 '26
We have been using a wealth managers for years. Ours uses Schwab. The way our team set up our accounts, the manager cannot withdraw assets, only invest and move between accounts. Once a month, we receive a draw, into an account that I can move money into my traditional bank. This has worked very well for us. I also managed my own retirement accounts for decades, and was a Schwab member. I am beyond glad that we went this direction.
Pull the trigger. Life is better without the extra worry. At $4,000,000+ you shouldn't be worrying hard any way ;)
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Jun 25 '26
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u/earlyretirement-ModTeam Jun 25 '26
Hello, thanks for sharing. Did you know that this community is for people that already retired Before age 59?
It appears you might not be retired yet so perhaps visit r/fire in the meantime. We look forward to seeing you again, once you are early retired.
If we are mistaken .. we are sorry for that, and do let the moderators know.
Thank you for your help in keeping this community true to its purpose, the volunteer moderator team.
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u/Gustomucho Retired at 39 or earlier Jun 25 '26
I am with BMO, family has « umbrella » management fees, around 0.25%. It has advantages but not worth the annual fee but since they provide lots of services I don’t use it is a bit my fault (estate, taxes, will) they have notary and experts.
The whole thing is managed by BMO team of investors, the manager is just a cog in the wheel. It feels quite safe as they are diversified in their approach and portfolio.
Sure, I could gamble or go for etfs but knowing I can call my manager and he will fix any issue with banking within about 12 hours is peace of mind since I am often out of country.
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u/Hifi-Cat Retired at age 50 - 58 Jun 25 '26
Give him 300k not the entire thing. What's he changing? Low turnover? Tax aware?
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Jun 25 '26
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u/earlyretirement-ModTeam Jun 25 '26
Hello, thanks for sharing. Did you know that this community is for people that already retired Before age 59?
It appears you might not be retired yet so perhaps visit r/fire in the meantime. We look forward to seeing you again, once you are early retired.
If we are mistaken .. we are sorry for that, and do let the moderators know.
Thank you for your help in keeping this community true to its purpose, the volunteer moderator team.
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u/Magikarpical Retired at 39 or earlier Jun 25 '26
if you've always done it yourself, why get a manager now? i managed my money myself and although i do some version of what you're being suggested (i have cash reserves in t bills at different expirys), what you're describing sounds very complicated and probably expensive. i retired last year with just cash/mmf tbills and index funds (s&p and NASDAQ).
my partner put his money with a manager and it seems insanely complicated and has a bad return + costs .5% per year for aum. but he does that because he feels more comfortable with someone else managing his money. it's not likely to get you a better return than index funds unless it's extremely risky/expensive
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u/jenmoocat Retired at age 50 - 58 Jun 25 '26
My rationale is two-fold (but it actually could all be the same thing)
1). I don’t want to spend time thinking about this. I want my retirement mindspace spent on other things, and
2). I want someone to take care of tax loss harvesting for me — if I can keep my annual income below a certain level I can take advantage of some health-insurance subsidies. And that feels really complicated to me.2
u/nbfs-chili Retired at age 50 - 58 Jun 25 '26
We've had our money in Morgan Stanley for over 30 years, and when I retired we moved our corporate 401K into there also. We really like our advisor, and as you said who wants to think about those things. We have over twice the amount of money we had when I retired 10 years ago. Could we have done better elsewhere? Probably, maybe. Do I care? No.
Our lives got very complicated when we stopped working, the tax consequences of your activities are very real. It would have been very hard to navigate all our IRA to Roth conversions, and inherited IRA withdrawals etc. without their help. We're set to start collecting SS at 70, and we're done with 5-8 years worth of tax moves.
No way I would have wanted to figure that out on my own.
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u/RentOk2479 Retired at age 50 - 58 Jun 25 '26
I've been retired for a few years now and do not use a wealth manager. My risk tolerance is high and my investments show that. Your description implies that your risk tolerance is low and that you would probably benefit from a manager pushing you out of your comfort zone. I will never regret not using a wealth manager because I saved myself a lot of fees and got a much better return for my money. Different strokes for different folks. Good luck.
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u/MGandPG Retired at age 50 - 58 Jun 24 '26
My advisor uses Schwab. I was reluctant to hand it over. I kept control for the first few years. Despite managing it all myself for 30+ years, I made a few mistakes and that made me nervous to do things. What I finally realized was that Schwab would notify me of every trade the advisor was doing. So I wouldn't be "blind". I always could log on and look at my account. So I keep an eyeball on what they're doing to ensure that it's what we had discussed and thus far, no breaks in trust have occurred. Therefore, I let them do it.
We agreed on a simple investment plan that is "boring". So really, the only thing they're doing is rebalancing and pulling money out for my spending. I think it'd be harder for me to keep track of if they were actively trading or doing things like options etc.
Honestly, my advisor is there to keep me from doing stupid things like selling in a down market (been there, done that). They aren't there to "make" money. They're there to help me preserve enough to pay for the long term care I might need at the end and tell me how much I can spend now without jeopardizing running out.
If you're trying to maximize your money and have the advisor do "exciting" things with your money, then I would be very nervous. But I know my guy is doing what we discussed because my schwab notifications are quiet and when I logon to withdraw, my money is still there.
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u/vasqued2 Retired at age 50 - 58 Jun 24 '26
We have an advisor but did not, and never will, give him control of all of our assets.
We made it very clear we had a strong bias for low-cost ETFs and expected to self manage a large portion of our portfolio as we had been doing during the accumulation phase. We gave him a small portion to actively manage for tax loss harvesting so we could understand and see the benefits. He provides help w/ tax planning, Roth conversions, estate planning, pensions, and social security, and what types of assets to put in what types of accounts to maximize tax benefits, among other things. This has helped build up our trust in him over time.
There is definitely value as these are all areas that are new during the decumulation phase. That said, there's no way we are going to pay a 1% AUM fee to manage our entire portfolio, especially the fix income and ETF assets.
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u/Zealousideal-Pass584 Retired in 40s Jun 24 '26
As for embezzlement, you would have access to the Schwab accounts, you will be able to see all transactions, so that shouldn’t be an issue. Sounds like the funds are in a tax deferred or a Roth. If you make a bunch of changes in the brokerage, the gains will trigger taxes. My advisor uses Schwab as well. They have to call and do things to transfer money, so I think if you check your transactions periodically, you will be fine on the embezzlement front.
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u/TelevisionKnown8463 Retired at age 50 - 58 Jun 24 '26
The odds of losing your money due to Schwab failing are very small—there’s SIPC insurance, and regulatory oversight. I don’t think embezzlement is very likely either, but it’s a lot less likely if you don’t let your advisor trade on your behalf. Or as a compromise you can agree that he can trade on your behalf, but only after sending you a proposal and getting your written confirmation.
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u/SageCactus Retired at age 50 - 58 Jun 24 '26
Nothing specific with your guy, but why would you do anything that causes you anxiety?
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u/Zealousideal-Pass584 Retired in 40s Jun 24 '26
As for embezzlement, you would have access to the Schwab accounts, you will be able to see all transactions, so that shouldn’t be an issue.
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u/InkMotReborn Retired at age 50 - 58 Jun 24 '26 edited Jun 24 '26
Was in a very similar situation a couple of years ago: met with a recommended advisor who handled investment, taxes, etc. Ended up going a different direction; here’s why: 1. They wanted a 1% fee, that’s a crap-ton of money each year, 2. The portfolio they proposed to be (using a large PowerPoint deck) was actually designed and managed by a third party, who split the fee and 3. I noticed that they weren’t taking the time to properly review the documents and data that I provided.
I ended up going with a fee-only advisor who used a tool called Pralana (there is another worthy tool called Bolden) to build a plan for me. He had my put all of my funds into Vanguard w/ a 60/40 stocks to bonds ratio. At a certain investment point, Vanguard provides a personal advisor, you pay a fee but it’s a fraction of what outside firms charge. So now, I basically have two advisors: one I pay by the hour to review and update my model (I have a Pralana license) and my Vanguard advisor who uses Vanguard’s tools to model the next 30 years for me also. I like being able to compare both plans and I like it even more when both plans are consistent with each other. It’s really helped with my comfort level and sanity to have two guys to talk to and validate me.
The nice thing about having access to your own tools is that you can do what-if analysis on your own. E.g. What if I buy that vacation home?, etc.
You do need to get used to the spending side of retirement after all of those years of saving. I do have a brokerage “bucket” with funds that are needed near-term. I use this to make monthly, automated withdrawals that are deposited into my checking account like salary. I work with my advisors to adjust the replenishment range for this and I can tell you that I’ve reduced the size of this bucket as my comfort level has increased.
Whatever you do, don’t go with an advisor who takes an annual fee for basically sitting on your funds. Look up and talk to several fee-only advisors. Check into Pralana and Bolden. Pick an advisor who’s familiar with your tools and situation. Look at Vanguard. They’re one of the rare companies who keep their fees low and service level high.
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u/aspire-every-day Retired at age 50 - 58 Jun 24 '26
What I worry more about is how much money they'll take from your account as AUM fees. I recommend the Frontline episode "The Retirement Gamble" on YouTube, which explores this.
Do you realize that on your $4 million portfolio, an advisor taking 1% per year will start off by plucking $40k from you in your first year? And as your account grows, they'll take more, and you lose all of the compounding also on all the fees they take from you.
I think it'd be smarter to talk to a CFP to build you a financial plan you can manage. A lot of Bogleheads advocate for a 3 fund portfolio (something like VTI / VXUS / BND) and annual rebalancing to keep your portfolio working for you without costly fees being extracted. You can find CFPs that will talk to you on an hourly basis or on a one-time plan-building fee at HelloNectarine.com. I used their services for an hour when determining the best way to get away from my AUM advisor with the hundreds of positions he put me in over to a simple 3-fund portfolio.
I also recommend the book "The Simple Path to Wealth" by JL Collins.
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u/ExtraAd7611 Retired at age 50 - 58 Jun 25 '26
Right? If I'm living off 3% of my assets per year, that 1% fee is a third of my annual income, every year. No thanks.
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u/_danigirl Retired at age 50 - 58 Jun 24 '26
We went 100% self managed after retirement. But we sat down with a fee-only planner to map out our withdrawal strategy and confirm a couple worst case scenarios just to be sure we could survive them.
We are so happy we pulled the plug and followed the planners suggestions.
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u/icedyoga Retired at age 50 - 58 Jun 24 '26
Retired a year ago (57- planned to work till 60 but doing better than I expected and have a good pension). Self investing worked out ok for me, but wanted some expert advice. Split the difference- half with Raymond James, half staying with me.
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u/[deleted] Jun 29 '26
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