Million bonanza deserves hired advice

A $4.5

Fee-only planners offer the best avenue

Dollars & Sense

January 02, 2000|By Liz Pulliam | Liz Pulliam,LOS ANGELES TIMES

I am one week away from selling a second-generation family business and receiving far more money than I've ever had the pleasure to manage (approximately $4.5 million net). I will be working for the company that has acquired our business, so I don't need any of the proceeds of the sale right away. (I am 47 years old.) Could you give some suggestions as to how to properly invest and manage such a sum?

You need more than the little advice a newspaper columnist can give you. Don't be embarrassed about being clueless -- few of us would know exactly how to handle that much moola, beyond having one heck of a binge at Nordstrom or a yacht dealership.

Even if you did think you knew what you were doing, I'm not so sure it would be a good idea to do it all on your own.

Having a second set of eyes to look over your financial choices -- someone who isn't intimidated by seven-figure checks -- would be invaluable and could prevent you from making some stupid mistakes. You are in a position to have an accountant, a lawyer and a planner -- each of whom might be helpful in evaluating the others.

The good news is that there are lots of smart, skilled financial planners out there who are dying to help you.

You have the kind of money that attracts the best of the best -- fee-only financial planners who make their bread and butter by managing big wads of cash.

Poorer folks have to contend with commission-based salespeople trying to sell them annuities.

You get to have top-flight personalized advice, a tailor-made portfolio, and goodies such as tax advice and estate planning from people who know what they're doing.

They won't come cheap. Expect to pay around 1 percent of your assets a year.

That $45,000 may seem like a lot now, but trust me, you could blow a lot more than that with one bad investment call.

You'll want to interview several candidates before you decide to hire one.

You can get a list of fee-only planners from the National Association of Personal Financial Advisors at or by calling (888) FEE-ONLY. If you have rich friends, chat them up about who manages their money.

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