Advice/Ideas for investing a large amount of money?

[jively]

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I'm interested in why you have a value bias in the US and a small cap value bias overseas.

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This is based on the Fama and French research that shows small stocks and value stocks outperform large stocks and growth stocks over the long haul. This has been shown to be true in the past in the US over very long time periods, and in international markets and emerging markets.

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And why would someone with $35 million dollars hire a financial advisor to put him into mutual funds. Paying double fees seems silly when, with his portfolio, he could hire top advisors who could build a diversified portfolio of individual stocks on the equity side. This gives him superior tax management and lower fees.

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In my post, I did mention this:

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For $35 million, you can use an advisor that charges a very very small advisory fee and use managed accounts held directly by DFA.

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My managed accounts, I mean "separately managed accouts" where he is owning the individual stocks in his own name, and not in a mutual fund.

-Tom

[jively]

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Almost no one with that kind of asset base should be working with just one advisor. You should have at least a couple of different advisors pursuing different strategies. The basic questions of where the money should go will depend on your goals, liquidity and tolerance for risk. You have to understand that properly investing a sum of money this large involves lawyers, accountants and advisors working together for which they are typically paid a fee as a percentage of assets. [...]

So basically hire someone. A DFA planner is an excellent start, but I would divide your investable assets between at least two separate advisors who are aware of what the other advisor is doing, but operate separately.

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I really don't understand this. If he hires a DFA planner, and has a balanced and globally diversified passive portfolio, with a risk tolerance suiting the income goals, and basically owning every stock in the world, tilted towards small and value stocks, why would you need another advisor?

-Tom

[Sniper]

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Almost no one with that kind of asset base should be working with just one advisor. You should have at least a couple of different advisors pursuing different strategies. The basic questions of where the money should go will depend on your goals, liquidity and tolerance for risk. You have to understand that properly investing a sum of money this large involves lawyers, accountants and advisors working together for which they are typically paid a fee as a percentage of assets. [...]

So basically hire someone. A DFA planner is an excellent start, but I would divide your investable assets between at least two separate advisors who are aware of what the other advisor is doing, but operate separately.

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I really don't understand this. If he hires a DFA planner, and has a balanced and globally diversified passive portfolio, with a risk tolerance suiting the income goals, and basically owning every stock in the world, tilted towards small and value stocks, why would you need another advisor?

-Tom

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For one, as he mentioned, with 35mil, he should be diversified beyond funds, and even individual stocks. He should be looking at tax shelters, real estate, hedge funds, etc.

Two reasons to have more than one advisor, would be to not only have a check and balance system, but also to have more ideas & better access to private placements, or other special investment opportunities, should he choose to pursue them.

[Thremp]

Sniper,

I see some people who're wealth managers who manage one nine figure account or several smaller accts this size. Do you have any idea how these guys work? Are they usually part of a larger network etc? One of my buddies Dad does this stuff and I've always been kinda unsure what he does all day.

[wdcbooks]

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Almost no one with that kind of asset base should be working with just one advisor. You should have at least a couple of different advisors pursuing different strategies. The basic questions of where the money should go will depend on your goals, liquidity and tolerance for risk. You have to understand that properly investing a sum of money this large involves lawyers, accountants and advisors working together for which they are typically paid a fee as a percentage of assets. [...]

So basically hire someone. A DFA planner is an excellent start, but I would divide your investable assets between at least two separate advisors who are aware of what the other advisor is doing, but operate separately.

[/ QUOTE ]
I really don't understand this. If he hires a DFA planner, and has a balanced and globally diversified passive portfolio, with a risk tolerance suiting the income goals, and basically owning every stock in the world, tilted towards small and value stocks, why would you need another advisor?

-Tom

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He would need another advisor just because his needs transcend basic asset allocation. Like I said before, you would need to minimize your tax burden and create shelters where necessary.

Just think of one example. Most people with $35 million are going to engage in charitable giving. Do you need a charitable foundation? What kind of trust is appropriate? Do you prefer to give as an annuity, upon your death, or give a discretionary amount each year?

As should be obvious I am a planner and I am only giving general advice but I think it is important to realize that the work a good planner or advisor does goes well beyond just setting the client up in a set of investments. Much of the grief advisors get is well deserved, but for a client like the OP a good advisor offers services that go well beyond the expertise of even a savvy individual investor.

[Statutory]

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Sniper,

I see some people who're wealth managers who manage one nine figure account or several smaller accts this size. Do you have any idea how these guys work? Are they usually part of a larger network etc? One of my buddies Dad does this stuff and I've always been kinda unsure what he does all day.

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Why dont you ask him and report back to us. Im sure hell tell you about it, and I'd be interested to hear.

[Thremp]

Statutory,

I don't think he will, which is the whole point. Not to mention I've spoken to him for a total of ~20 minutes and might not see him for years. My buddies description included working lotsa hours and managing one monster acct.