No. of Recommendations: 2
I've had "real money" invested for 25 years and done quite well.

To me "real money" means a solid 6-figure portfolio(s), perhaps even 7-figures.

So I'm wondering why someone who has a lot of experience and has achieved a sizeable portfolio by investing on their own would suddenly want to use a FA.

Ah-ha! Upon re-reading the OP: getting a pretty sizable check as part of a merger ... will have to cut back to half pay ...
and then
I've been investing pretty successfully for over 20 years, but I tend to think our portfolio has grown to a point where I'm a bit out of my league ... we paid a guy a fee to evaluate where we are, what changes we should make, etc.
What did he say?
FWIW, when I was actively interviewing FA many years ago in reviewing our existing portfolio, one guy said, "Oh, United Airlines. Well, everybody has to learn their lesson about airlines. I guess you haven't learned yours yet. No worry, you'll find out before long."

The other one that stands out in my memory, after reviewing everything, the guy looked at us and said, "What do you need me for?"

and this guy could offer some benefits, specifically, investment vehicles that are available at our net worth, yet difficult to get as an individual.
From everything I have read recently, these "alternative investments" are in the process of crash-and-burn. I think that low-HNW people are attracted to them partly due to the "little people can't join this club" exclusivity aspect.

Let me ponder about what "a bit out of my league" brings to my mind.
* Net worth above $1M but less than $5M.
* Standard stock position size near $20K. (If you invest primarily in individual stocks.)
My reasoning: $1M is a magic number. It's always been the cutoff between "have it made" and "still working on it." It's not likely that somebody well under $1M would think they are out of their league. And most "alternative investments" are open only to "accredited investors", which means $1M liquid NW.
OTOH, by the time you've accumulated $5M you'd be confident that you have a solid base of knowledge and experience, and confident that you've got a good handle on things.

As far as account size for an FA .... yes, he'd probably scoff at $50K. As he should. As *you* should. $50K of a $1M portfolio is not going to make any difference in the overall portfolio performance.
Anyway, most FA's of consequence have a minimum account size of $100K or $500K.

Frankly, if someone came to me and said, I've been investing pretty successfully on my own for 20 years and my portfolio of stocks/bonds/funds is $1M-$3M and I'm considering hiring a FA to manage a significant chunk of my money ..... the first thing I would ask is "Why??"
Have you lost confidence in your ability?
Do you want to segregate a portion off, so that if you make a bone-headed mistake you won't lose everything?

Almost all the scenarios of answers & rationales that I can think of all end up a the same place, at the same answer. To wit: Put that money into a basic set of index funds. Not with an FA, with Fidelity or Vanguard.

So I would turn your question around and pose it as "Given my reasons (whatever your reasons are) for wanting to have someone else manage this significant chunk of my money --- why should I place it with a FA instead of into index funds?"
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.