March 22, 2023
One of the more common ideas I hear from a client is that, “I don’t want to move all of my money to you. I have another guy and I want to see how you both do.” This creates some problems. For one thing, quite often the more you invest with a given company, the lower the costs are. This is true with per-transaction business as well as with advisory (fee-based) accounts, and the difference can be substantial. As an example, you might be paying 1% of assets for a $400,000 account, but 0.5% for one over $500,000. A 0.5% difference at that portfolio value is $2,500 that goes unnecessarily to fees. In other words, splitting your accounts between multiple advisors can amplify your cost to invest and erode your overall return.