Finding Ways To Reduce Your Wealth Manager’s Fees

Justin Breen, the man behind the exclusive BrEpic Network and co-author of Superior Results: Maximizing the Value of Your High-Performing Family Office Just Like the Super-Rich, says that most wealth management clients do themselves a huge disservice. Even when the results they get are in their own best interests, they usually pay too much for them. Most clients of wealth management don’t do anything to make sure they get what they want and pay as little as possible for the services they get.

Without a doubt, most wealth managers try to give their clients a lot of value. But they aren’t usually willing to talk about their fees. But that doesn’t mean you can’t talk about the fees for managing your wealth.

We know this from doing a lot of research on the private wealth industry and consulting with very wealthy people on how to get the most out of their business relationships. If you understand your wealth manager’s business model and negotiate well, you can often get more for less. What we’re saying is that you should get to know your wealth manager…

Where you get better results that are in your own best interests.
Where your experience is of a very high quality,
Where the cost of the expertise you’re getting is in your favour.
A large number of wealth management clients do not meet these three criteria, which is very telling. Focusing on keeping the cost of wealth management services as low as possible, we often find that clients are paying too much and, in most cases, we can come up with a payment plan where…

They are paying less without getting less, and often getting more.
Their wealth managers are making profits that are a little lower but still very good.
To be more clear…
Using a set of compensation models from the private wealth industry, it is reasonable to cut fees for fee-based investment management services by up to 25%. This is a wide range that depends on how the wealth manager explains their fees, how they run their business, and what they can do.

Most of the time, you’ll only be negotiating the fee with the wealth manager. The price of financial products like mutual funds or money managers in separately managed accounts is often much harder to negotiate. Most of the time, it’s hard to get the fees for alternative investments like hedge funds and private equity funds to go down. But even the fees for financial products can sometimes be negotiated down.

By lowering fees, you not only pay less for the same level of investment expertise, but you also have more money to invest. You can end up with a lot more money in your pocket if you pay less each year and let your money grow.

Another way to lower the cost of your wealth manager, which often goes hand in hand with the first, is to not question the money management fees but instead bundle in extra services and products. For example, instead of trying to negotiate a lower investment management fee, you might ask your wealth manager to include services like paying bills and making financial statements. If you don’t want to talk about the investment management fee directly, you might want to add other wealth planning services like estate planning, asset protection planning, or business succession planning. Most wealth managers would rather do this than lower their fees for managing investments.

You can use either method, of course. You can try to get the fee for managing investments lower and add more services to it.

We teach very wealthy families how to talk to professionals like wealth managers in a good way. Sometimes, these wealthy families ask us to negotiate with other professionals on their behalf or with them. How we negotiate so that our wealthy family clients always come out ahead is not magic. So, it’s likely that you can get the same results as us. You can probably get more value from your wealth manager for less money.

When negotiating with your wealth manager or any other high-end professional, there are two very important things to keep in mind. One: When you get an agreement to lower the cost, you want to make sure there is no loss in value. Two: Your wealth manager continues to make a good profit, but it’s getting a little bit smaller.