What would you charge ..?

or Register to post new content in the forum

10 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Aug 22, 2005 3:06 pm

on a $1.5 mil wrap fee equities IRA?  what's your firm min?

Aug 26, 2005 12:23 am

No minimum but 1.25-1.35 is on average if it is a managed account. if it is a trading account (fee in lieu of comm.), .90 is average

Aug 29, 2005 5:16 pm

Min .5

Aug 30, 2005 9:07 am

If you're talking outside managers in an SMA account, I'd charge 1.5 to 1.75. You're paying the outside manager at least .5 and any further discounts means you're not making enough to make the account worth having. That is unless there's something more to this relationship, like access to more in some sort of household or network.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


If you're new to the business you may feel differently and take anything you can get. When you've been around longer you find you have to value your time more, and your time is frankly more valuable to the client as well.


Aug 30, 2005 9:32 am

If I was your client, with 1.5 mil. and you were cahrging me 1.35, per year, you bet I would want to know, exactly why you think your worth $20,000 dollars per year, especially - when someone else is managing the money.


Aug 30, 2005 1:08 pm
moneyadvisor:

If I was your client, with 1.5 mil. and you were cahrging me 1.35, per year, you bet I would want to know, exactly why you think your worth $20,000 dollars per year, especially - when someone else is managing the money.



And that would be a fair question. <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


First, I'd explain that it wasn't $20k, even at 1.75 after the .50 goes to the managers, it's less than $20k. Originally when I mentioned 1.5 to 1.75 I was thinking a $1m portfolio. Given a $1.5M bucket, I’d go with 1.5%.


Second I'd explain if they took their $1.5M directly to the money mangers being used, they wouldn’t meet the minimum account size most of them have. With me that $1.5M is probably going to five, perhaps six managers, which wouldn’t be possible if they went direct.


Third, I’d explain that my company and I are the ones that do the due diligence on the mangers and screen them, hold their assets, do the trades without commission, give them a single account and 1099, and, most critical of all, create an asset allocation that makes their portfolio fit their stated financial goals.


Finally, I’d remind them that if they go directly to the manager and are disappointed for whatever reason with their results, they have to fire the manager and start all over again. With me, if any changes need to be made to managers or asset allocation, they can do that with the same account numbers without disruption and without starting again from scratch.


Aug 31, 2005 12:20 pm

spoken like a true MS rep  

Aug 31, 2005 12:30 pm

C'mon now, no MS rep has ever handled a $1.5M account... Maybe a $15K account...

Aug 31, 2005 2:24 pm
frumhere:

spoken like a true MS rep  


Actaully I'd say he sounded like a rep from any major wirehouse. At least he had the courage to answer. Let's hear you take on that question.

Aug 31, 2005 2:25 pm
blarmston:

C'mon now, no MS rep has ever handled a $1.5M account... Maybe a $15K account...



Nyuck, nyuck. Perhaps before that last cut there was some truth to that. BTW, we don't get paid diddly on small households anymore, sounds like ML.