You need a good estate planning attorney (ask rich friends), and a good accountant (ask rich friends), and a good financial advisor.
Of these three, if you believe in MPT, the financial advisor is simply a coin-operated sales guy. At a 1% fee against $25 million, your business represents $250K/yearly. That is a solid sum of money to any business.
But practically speaking, what is that financial advisor going to sell you? Odds are after you get past the glossy color printed custom, just-for-you, spiral bound investment plan, you will see a custom portfolio that will be assembled with MPT. This is the product that sell every day to every other $25 millionaire that walks in the door.
Sure, you get to tune the outcome based on your risk threshold, or other biases you may have. But unless you are rolling your own investment strategy based on your own perception of future returns across asset classes (in other words running your own micro-hedge fund) you are buying MPT.
Are there managers and funds that beat everyone else year in and year out. Yes there are. Why don't you get the chance to park your $25 million with them? Because even the choice of parking your funds with them is bound by the math of MPT.
Agreed. This is the only thing I could come up with that would reasonably ensure that I would be talking to someone decent.
Offtopic, but it is my belief that one of the strong factors in the perpetuation of wealth and associated wealth disparities in society is exactly this kind of information and knowledge asymmetry in the population, from access to the best advice (networks or simply the funds to gain access) to the osmosis-like uptake of information throughout one's childhood when raised in an affluent family/neighborhood/environment.
>the financial advisor is simply a coin-operated sales guy
Agreed. this is absolutely the mindset I tell all my friends to adopt, and to not be mislead by the title of "advisor", since they are anything but.
>Odds are after you get past the glossy color printed custom, just-for-you, spiral bound investment plan, you will see a custom portfolio that will be assembled with MPT.
Partially agreed.
Most of the time, I agree that what will be pitched is a cookie cutter MPT set of assets/funds that, while often of somewhat marginally unideal quality, will generally get the job done. However, I have* seen and heard of absolutely horrible plans being thrown at naive new wealth people, and while "odds are" (as you say) this won't happen to you, it's still a non-neglible probability that you get wrapped up with some truly sleazy operations.
That being said, your average American PWM firm/team/branch isn't likely to totally come after you like this. I think this is more likely to happen in Asia or Asian firms in the west.
Of these three, if you believe in MPT, the financial advisor is simply a coin-operated sales guy. At a 1% fee against $25 million, your business represents $250K/yearly. That is a solid sum of money to any business.
But practically speaking, what is that financial advisor going to sell you? Odds are after you get past the glossy color printed custom, just-for-you, spiral bound investment plan, you will see a custom portfolio that will be assembled with MPT. This is the product that sell every day to every other $25 millionaire that walks in the door.
Sure, you get to tune the outcome based on your risk threshold, or other biases you may have. But unless you are rolling your own investment strategy based on your own perception of future returns across asset classes (in other words running your own micro-hedge fund) you are buying MPT.
Are there managers and funds that beat everyone else year in and year out. Yes there are. Why don't you get the chance to park your $25 million with them? Because even the choice of parking your funds with them is bound by the math of MPT.