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Comment by bjoernw | Hacker News Reader

I understand people's fear of having other people in charge of your money but maintaining a portfolio and keeping allocations at a certain level (like 30% stocks, 70% bonds) on a daily basis requires some help. Some investment advisors manage many portfolios and can therefore buy bonds in larger quantities at better prices.

Saying that you shouldn't hire a professional to create a suitable strategy for you and maintain your wealth doesn't sound right.

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Hiring the wrong professional is a great way to lose your money though.

It all depends on which professional and there are plenty of shysters in that world. A fool and his money are soon parted, and there are people that have turned that sort of thing in to a career.

Case in point, a friend of mine did pretty good, had a good sized IT business and a sizeable nest egg. Enter the investment advisor. 15 years later, and a lot of bullshit stories he's down to roughly 15% of what it was when he started out.

Finding people you can trust with your dough is very hard, learning how to do so yourself is not easy but if you fall you hopefully won't fall too far.

Coming in to some money without having earned it is harder still, it means that you don't have money managing skills that would have gotten you to that height in the first place.

It's a very tricky position to be in, best described as a goldfish landing in a shark tank.

Too late for me to edit my reply to you but:

> Saying that you shouldn't hire a professional to create a suitable strategy for you and maintain your wealth doesn't sound right.

Is a strawman, I didn't say that you shouldn't hire someone to create a suitable strategy, I said 'Definitely don't put it in the hands of third parties', in other words, maintain control of your funds at all times.

Advise is fine, but a third party managing your funds for you in a 'hands off' mode is most likely not. It's your money, when it gets moved you should be the one to make the call, not some broker. Their interests are not aligned with yours.

Advisors use brokerage accounts at places like Schwab, which give both you and the advisor access to the account.

And brokers are not investment advisors. They are in the business of selling stuff to you. So if you are saying don't give money to brokers to manage then I agree :). When you hire an advisor you agree on a strategy beforehand and the advisor makes trades to keep certain averages in your account. This industry is pretty regulated and advisors know they are liable if they divert from an agreed-upon strategy.

With any reasonably sizable amount of money (and 5 mil definitely fits that), you should have multiple investment advisors and accounts with each of them (and they should not know about one another or the rest of your investments).

that's terrible advice. An investment advisor needs to know about your overall wealth to tailor a strategy to your situation. And 5 million is not that much. Managing 5 million or 10 million is pretty much the same amount of work. It actually gets easier when you're dealing with bigger sums because some bonds only trade in larger amounts.

You're not separating it due to work load.

You're isolating yourself from a bad egg. The point is to insure yourself against utter crooks/total screwups.

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