CNBC published a list of the best financial advisors for ultra-high net worth clients. The list exists because most registered investment advisors claim they serve wealthy clients but apparently nobody believes them. Trust issues in an industry built on trust. That's f*cking poetic.
The problem CNBC solved is this: rich people don't know which advisor will lose their money with the most sophistication. Any schmuck with a Series 65 can buy index funds and charge 1%. The ultra-wealthy need someone who will buy index funds, charge 1.2%, and serve better coffee in the waiting room.
This is an arms race in the same way that competitive knitting is an arms race. Everyone's using the same three ETFs. The differentiation comes down to whether your advisor golfs at Pebble Beach or just talks about golfing at Pebble Beach. Performance is identical. The leather chairs cost more.
The funniest part is calling it an arms race when the weapons are PowerPoint decks about tax-loss harvesting. Advisors competing for ultra-high net worth clients by demonstrating their ability to do what Vanguard does automatically for 0.04%. But they'll do it with a dedicated relationship manager named Preston who went to Dartmouth.
CNBC's criteria for making the list probably includes assets under management, client retention, and whether the advisor owns a navy blazer without elbow patches. Not included in the criteria: beating the S&P 500. Never included. Would disqualify everyone.
The real service these advisors provide is telling rich people it's okay to stay rich while poor people stay poor. That's worth 1% annually. Therapy costs more and therapists won't help you set up a dynasty trust in South Dakota.
Retail traders will read this list and think they need one of these advisors. They don't. You need $10 million minimum to get a call back. You have $38,000 in a Robinhood account and half of it is in a leveraged semiconductor ETF you can't pronounce.
Photo by Sasun Bughdaryan on Unsplash
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