About a year ago, a relative asked me to help manage her money. Even if she is not their typical high net worth client client, she is paying Goldman Sachs Asset Management (GSAM) about 1% asset management fees. The account was set up through her ex, but since she wanted a clean break, she was ready to move and ask for my guidance.
We arranged a call (like I did with consulting a client) to address her financial situation, goals and concerns. From there, we developed an investment strategy designed to maintain her lifestyle and reduce the risk of currency exhaustion. As an artist, finance is not something she really understands or has never been into.
Since she is still looking for a new agent, I recommend Fidelity, where I have an account for over 20 years. I am familiar with their platform and with her permission, I can view her portfolio and trade on her behalf.
By transferring her own assets from GSAM to GSAM, she eliminated the 1% administration fee, and I rebuilt the IRA portfolio using low-cost ETFs with similar asset allocations, which are her thousands of dollars in annual expenses while maintaining long-term growth potential.
But, about a year later, I don’t want to manage funds for anyone again for free. There are no individuals. I want to provide more time and energy to my family.
Why I want to stop managing money or free
We agreed to the asset allocation and I built it for her. Everything went smoothly in the second half of 2024 and early 2025. Her portfolio has steadily climbed to its all-time high and I haven’t heard her once. no problem. I am proud to increase her wealth, especially since she hasn’t earned much positive income. Her portfolio will be her main financial support in the future.
But in late March and early April 2025, her portfolio was hit due to the trade war and I suddenly received a text message asking what was going on. I explained the situation and tried to keep her nerves calm. Then there is the inevitable question: “What should we do now?” – It’s a fair concern for anyone who delegates money to others.
But now I’m starting to feel stressed.
notes: If you have over $100,000 of investable assets, you can get free financial analysis from Empower Advisor Register here. Annual reviews are always worth it, as your asset allocation will change significantly over time and your financial situation may develop as well. We all have financial blind spots worthy of recognition to build more future wealth.
For some people, it’s not enough
I reminded her of our game plan and emphasized the importance of studying abroad. I also shared my views on why the market is rebounding. Given that we have built a 60/40 portfolio, and when the S&P 500 dropped to 20% from April 8 to date, her portfolio was Only 8.8% drop. From my point of view, this is a victory!
But from her perspective, I still lost her money. And because she is not a fan of the current government, this situation is even more frustrating for her.
I stressed that the reason behind the performance or balanced allocation of her portfolio is not important. She was disappointed – in turn, I was upset with some of my emotional resilience.
Helping people who are disappointed in your help feel bad.
I’ve pressured my own losses
At the time, I was already stressing about my portfolio losses, which were close to seven figures. I’m buying dips and watching values continue to decline and trying to stay calm. But very deep, I It seems like a damn fool My stable real estate sales revenue was purchased too early.
Her pressure increased mine and I had to divide my emotions to reassure her. This left less patience for my wife and children, which is the biggest negative factor in my love for them. When I lose a lot of money, I admit that I tend to shorten the fuse.
During the bull market, I didn’t hear any words of approval. But once things turn, I feel worried and urgency. Again, it’s totally understandable. However, I took on the role of an unpaid employee, and the feeling of unwelcome prompted me to leave the traditional workforce.
If I expect me to actively manage someone’s portfolio and provide emotional support and education in a downturn, there is a clear compensation or boundary. Otherwise, I would rather keep the energy to write and take care of my children.
After getting rid of my daily routine since 2012, I may have become overly sensitive to anything that reduces freedom and joy. As a result, at this stage of my life, I did not become a currency manager.
Dual fee problem
I would love to help remove relatives’ funds from GSAM to reduce the double fees she paid. She was charged about 1% of asset management fees, as well as funding fees ranging from 0.8% to 1.6%, mainly funding managed by Goldman Sachs.
Now, if you really don’t have the time, interest or knowledge to manage your money, I’m not against hiring an asset manager. Paying professionals to build a risk-friendly portfolio is far more complex than missing out on decades by sitting in cash. Good managers can also be used as emotional buffers – helping charts to stop panic sales during downturns and reckless speculation during bull markets.
However, paying double fees (especially as your portfolio grows), it quickly increases the fees. A $500,000 portfolio is one thing. But paying $25,000 in a $2.5 million portfolio, plus $12,500 to $40,000 in funding fees, is starting to feel overwhelmed.
She needs to move-I’m glad to help her do that.
The only reason to pay a double fee
The only real reason for such fees is that if the manager provides access to exclusive private investments with meaningful upside potential, for example, a passionate AI company with a higher valuation over a year or two may conduct an IPO. But in this case, there is no such access.
I reviewed the historical performance of these funds, which is often difficult to find and intentionally opaque. However, by comparing her portfolio value from a decade ago with the ones I started managing, the compound returns were obviously not obvious. Double expenses are not only expensive, but also a barrier to long-term performance.
Personally, I don’t want to pay another 0.5%+ to own a repackaged public stock that is trying to beat the index.
Defend the remuneration of funds
I include most DIY investors, aiming to minimize expenses. But after a year of managing a relative’s portfolio, I now understand why financial professionals charge their jobs –Emotional labor is real.
When the market rises, it is relatively easy to manage funds. During the downturn, things became difficult. Emotional risk is even higher when you manage money for family members. You don’t want to let them down.
Advisors not only manage assets; they are managing expectations, fears, and behaviors. For this reason alone, they deserve compensation.
In other words, the fees should be fair and transparent. The flat 1% administration fee feels outdated. Less Thing – A hierarchical structure that gradually declines as assets grow, can make people more understand.
Three main benefits of hiring a currency manager
The real value of hiring a currency manager is Rest in peace. Knowing that someone is actively taking care of your portfolio means you can focus on doing what you like or perform well without having to worry about market volatility or portfolio drift. Reducing mental burden is huge, especially for parents’ disorganized work and parenting. During times of stress, it’s reassuring to know that someone else is considering protecting your wealth.
The second biggest benefit is consistency. A good consultant can help you stay disciplined – invest regularly, stay diversified and adjust risks over time. Even a determined DIY investor, I have a long time, and I haven’t just been in a way because life is in the way.
The third best is Accountability. A trusted consultant can serve as a finance coach to help you follow your goals. It is one thing to know what you should do, but it is actually another. Regular check-in and objective feedback can keep you on track, especially during major life transitions or uncertainties.
It is well worth it for financial professionals who help these three areas. It would be great if you are receiving positive service and your portfolio meets expectations. But if not, it’s only reasonable to explore better options.
I insist on managing the money, but it’s not my emotions
I can help my relatives develop investment plans. After all, this is something I have done for others for over 15 years. I also like saving money when there is a clear way. But I also need to protect my time and mental health, which means learning emotional separation.
My long-term goal is to teach her how to manage her own money. The challenge is that she struggles to learn about her financial situation. Ironically, this makes her the exact person who benefits the most from managing her money for her.
So while I will continue to oversee her portfolio, I am adjusting my investment strategy and mindset to relieve stress. She participated in a new, slightly conservative allocation of assets that were within the appropriate scope for their age and long-term financial goals.
Additionally, to help manage the emotional burden of your own portfolio for free, I remind myself that she should at least save it $20,000 per year Thank me. This mat gives both of us greater resilience in the downward market. So the next time I’m concerned with the message I’m going to remind us how much we are saving.
Appreciate for a long time
If someone manages your portfolio for free, don’t forget to show your appreciation. A simple thank you letter can go a long way.
And, if you don’t have anyone to manage your money for free, consider hiring a currency manager at a reasonable price. It may be worth it to just relieve stress.
Readers, any of you manage your friends or relatives’ money for free? If so, how do you structure this arrangement? How do you deal with the pressure when they are worried about market volatility, especially when your own portfolio is also hit?
Free financial analysis offers
If you have over $100,000 of investable assets (whether it’s savings, taxable accounts, 401(k)s or IRAS), you can get Free financial inspections From authorized financial professionals Register here. It’s an insignificant way to have experienced experts who build and analyze portfolios to make a living and review your financial situation.
Fresh eyes may find hidden expenses, inefficient allocations or optimization opportunities, giving you greater clarity and confidence in your financial plan.
I’ve been using Empower’s free financial tools since 2012 and talking to their finance professionals. From 2013 to 2015, I also consulted their part-time jobs in their office, when they were still called personal capital. As a long-term user and member partner, I am truly satisfied with the value they have been delivering for years.
This statement is provided to you by Financial Samurai (“Initiator”), who has entered into a written recommendation agreement with Empower Advisory Group, LLC (“EAG”). Click here to learn more.
