Choosing a wealth manager

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VOO or VTSAX Don't need a wealth manager

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I live my life in Vanguard. I don’t need investment advise. That’s the easy part.

How to handle the IPO. How much to be investing in my wife’s ESPP and how to set up a cash conveyor belt from that. How to set up effective tax strategies for my children. These are the things I need to know.

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Does anyone have any advice for what questions I should ask?

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Yes - Go ask Claude, ChatGPT, Grok. - I am being serious. Lay out in detail your entire wealth portfolio in detail and that you are interviewing wealth managers. Ask AI what to look out for and questions to ask when rating these people.

AI is going to do a better job giving you a buttoned up checklist to follow through.

Just taking you post, it tossed out this

Question #1: Who is actually doing the work?

Many firms sell with a senior partner and service with a junior associate.

Ask:

If I become a client, who am I actually meeting with three years from now?

Who prepares the recommendations and plans?

How many households does each advisor manage?

Question #2: What does "comprehensive planning" mean to you?

Let them define it.

A good answer should include:

Estate planning
Tax planning
Insurance review
Cash flow planning
Business succession planning
Retirement projections
Education planning
Asset protection

If their answer immediately goes to asset allocation and market returns, that tells you something.

Question #3: How do you coordinate with CPAs and attorneys?

This may be the most important question.

Say:

My biggest concern is integrating estate planning, taxes, real estate LLCs, and future liquidity events. How do you coordinate those professionals?

The best advisors often work closely with estate attorneys and tax professionals rather than trying to do everything themselves. Comprehensive planning frequently involves collaboration with tax advisors and estate planning attorneys.

Question #4: Have you managed clients through liquidity events?

Your PE-backed company may be where the biggest planning opportunity exists.

Ask:

How many clients have you worked with through an IPO, acquisition, private equity sale, or major equity event?

What planning did you do before the event occurred?

This will quickly separate wealth accumulators from wealth preservation experts.

Question #5: How are you compensated?

Ask it directly.

Are you fee-only, fee-based, or commission based?

What is my all-in annual cost?

Are there any additional fees, platform fees, fund fees, or planning fees?

Don't accept vague answers.

Question #6: What would worry you if you were me?

This is one of my favorite questions.

Give them your situation and ask:

If you were reviewing our finances today, what are the three biggest risks you would be concerned about?

See where their mind goes.

A sharp planner might mention:

Estate tax exposure
Concentrated stock positions
Liability from rentals
Umbrella insurance
Trust structure
Future liquidity planning
Long-term care considerations
Question #7: What should I have done five years ago?

Another great test.

Experienced advisors have pattern recognition.

They should be able to identify planning opportunities you've potentially missed.

Question #8: What does our first year look like?

Ask them to walk through month by month.

For example:

Month 1: Discovery
Month 2: Net worth analysis
Month 3: Estate review
Month 4: Tax review
Month 5: Investment review

If there's no process, that's a red flag.

Question #9: How do you measure success?

The best answer is rarely:

"We beat the S&P 500."

A better answer is:

"Your family achieves its goals with the least amount of risk and tax leakage."

Question #10: Tell me about a client who fired you.

This question can be incredibly revealing.

You'll learn:

How they handle conflict
Whether they're honest
Whether they force clients into a rigid philosophy
Biggest Red Flags

I'd be cautious if you hear:

"We consistently beat the market."
Excessive focus on proprietary investment products.
Little discussion of taxes.
Little discussion of estate planning.
No relationship with estate attorneys and CPAs.
Vague fee disclosures.
Heavy sales pressure.
The One Question I'd End With

Given your situation, I'd finish with this:

"Imagine it's 2046. My wife and I have maximized the opportunities available today. What would you have helped us accomplish over the next twenty years that we could not have done on our own?"

If they answer with investments, keep looking.

If they answer with tax efficiency, estate design, generational wealth transfer, charitable planning, asset protection, liquidity event strategy, and family governance, you've probably found someone operating at the level you're looking for.

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Yes - Go ask Claude, ChatGPT, Grok. - I am being serious. Lay out in detail your entire wealth portfolio in detail and that you are interviewing wealth managers. Ask AI what to look out for and questions to ask when rating these people.

AI is going to do a better job giving you a buttoned up checklist to follow through.

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So for someone who has a fair bit invested in the AI trade, I am defunct in some functionality. With Claude as an example, I am fine asking it various questions and getting answers - but I see people making calculators and breathing documents from this (ie effectively tools and programs). How do I take that step in usage - is there a specific app on top or DYI videos?

TIA

I suggest you ask it. It will tell you how it's done, help you set up any software, etc. It will probably involve you using their programming-oriented product (depending on provider) and will get you using their programming service which, if you do it enough, will have you spending more money with them. :-)

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If they answer with tax efficiency, estate design, generational wealth transfer, charitable planning, asset protection, liquidity event strategy, and family governance, you've probably found someone operating at the level you're looking for.

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This is the proper perspective. The conversations should be centered around short, medium and long term strategies, generational planning and tax efficiency. If products become part of the conversation it should only be around optimization and removal of duplication.

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With Claude as an example, I am fine asking it various questions and getting answers - but I see people making calculators and breathing documents from this (ie effectively tools and programs). How do I take that step in usage - is there a specific app on top or DYI videos?

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You are not alone. I see so many people who are completely blind to the functionality of Claude.

First off, you'll want to install the Claude app on your desktop. The web version just allows you to use claude chat, which is more for question/answer type of requests.

Claude Cowork and claude code is where the magic happens. Once you download the desktop app, navigate to Claude cowork and ask it what tools/skills/plugins you should install to give it the best functionality.

Happy building from there.

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As a 38 yr retired money Manager, I would only go with someone with at least 10 yrs experience.

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Retired at 38? You hit the lottery?

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VOO or VTSAX

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This!

Save the hundreds of thousands of dollars (or more) of a wealth mgr. 1% AUM compounded / opportunity cost is not worth it.

Why? The accumulation phase is relatively simple (and boring). Invest early & regularly in low cost index funds such as above and don’t look back.

You will need a wealth mgr (fee based!) in retirement and estate planning. The retirement phase is complex and advice can be worth the money (many times over).

Until then, keep the 1% growing in your account balances, not a wealth mgr’s pocket.

Of course. Meant ‘wealth mgmt services’ ie, CFP for Retirement income and RMD strategy, after tax income strategies, etc, and firm has CPA and estate attorneys.

Thats the only place I am spending $ on wealth mgmt services. And it is fee based. Not % AUM.

Accumulation phase is about accumulating, zero $ leakage (eg, AUM fees).