TIAA and Fidelity offer Wealth Management Advisors (WMAs) to university employees with $500,000 or more in investible assets with their company. Wealth Management Advisors provide a very basic financial plan and peace of mind to their clients in the beginning – best of all, there is no charge.
Quantifying the Value of a Wealth Management Advisor
Taking the emotion out of Investing:
- Being a good behavioral coach and providing a disciplined and long-term approach can add up to 1.5% to a client’s portfolio.
- Applying an asset allocation strategy: An asset allocation strategy can add between 0% up to .75% per year to a client’s portfolio
- Cost effective investing: Implementing a strategy of investing in low-cost investments is simple math – gross return less costs equals net return. The potential value add is .45%
- Rebalancing: Rebalancing a portfolio as investments drift from their targets will provide consistent return/risk characteristics. This can add up to .35% to a client’s portfolio
- Implementing a Spending Strategy: As retirees start to take money out of their investments, important decisions regarding how to spend down assets can add up to .70% to a client’s portfolio.
Vanguard also adds that the value added may come intermittently during times of high volatility and times of stress. Needless to say, the principles that provide the greatest value should also be the basic planning provided by every Wealth Management Advisor. So ask yourself, does your free Wealth Management Advisor or commissioned based advisor provide this planning to you? Is your Wealth Management Advisor more concerned about gathering assets and selling products or placing your goals first? The stakes are too high not to know!
Update 11/14/2017: In a series of scathing articles, the New York Times alleges multiple issues with advisors at TIAA:
New York Times: The Finger Pointing at Finance Firm TIAA
New York Times: TIAA Received New York Subpoena on Sales Practices
This article is written by Kevin J. McNab. Kevin works with professors, doctors, and university executives across the country. Kevin is President of ACE Wealth Partners LLC and is a CFP®, ChFC®, and CRPC®. Kevin is the Professor’s Advisor!