Short-term setup with a financial adviser?

[toscanini]

I understand the general consensus of this forum is that one should take financial management into one's own hands, and I'm generally a proponent this approach. And with the advice I've gained from reading these forums as an outsider for years, I'm in good shape regarding many of the topics that are covered well here. But even with continuous research elsewhere, one territory that still confounds me is tax-optimization as a US national.

Not only am I referring to tax issues relating to investment in/for the USA, which I might be able to handle myself, but the vagaries of inheritance and estate management, commercial real estate, education funds for children, setting up trusts and other vehicles for shared asset management, and more.

I've been wondering if it might not be worth my time getting a year (or 2 or 3) of financial advice from a US-expat focused RIA and then striking out on my own. I've done this successfully for US taxes/accounting (apologies to my former expat tax advisers!). I'm looking at financial advisory firms like Thun Financial (now Creative Planning) and Beacon Global Advisor Network (BGAN), which charge around 1% of current market value p.a. before brokerage fees. As I understand it, they could help getting a basic framework set-up for all the topics above, and I could upgrade my own financial literacy in those areas in the meantime. At some point, I would terminate the advisory and take direct control of the Custodian (i.e. Schwab, IBLLC).

Given the potential residency issues down the road, I've tended toward advisers that work with IBLLC but one adviser that I like highly prefers Schwab, which may dump my account once I don't have a US-based RIA. I'm also worried about other ways these advisors lock you in. And yes, I would be pretty circumspect about other products they sell, such as life insurance which would be separate/commission-based.

Has anyone gone down this route, or can provide more general advice?

[mighty58]

Seeking advice from a professional is a sound course of action, as the topics you mention can be complex, especially with the cross-border issues. But it sounds like what you need is advice, as opposed to needing someone to manage your money for you. So if that's the case, you should go for an advice-only, hourly-fee, non-money-managing advisor. You can use them as little or as much as you need, without needing to entrust them with your money or overpaying. Advisors that manage money and charge a percentage of assets-under-management unfortunately operate on incentives that may not align with your own. Paying for advice only as needed eliminates this risk and allows you to keep control. It also allows you to cut loose and move on whenever you like, with no hassles of needing to move your money, or severing relationships that one side thought would last longer.

You could start by looking at XY, which is a US-based network of independent fiduciary advisors that all operate on a fee-only basis, with no commissions or selling... they just proffer advice. There seems to be a specialist for any kind of situation, and with everything doable over Zoom, the best advisors in the US are now easily accessible.
https://www.xyplanningnetwork.com/

[toscanini]

Just as a test, I looked up the possibly relevant advisers at XY Planning and I have to say -- the pickings are slim, with only 1 or possibly 2 candidates who have any knowledge about Japan. Furthermore, if I just look at it purely from a cost perspective, it doesn't seem very promising.

For example, if I started with $100k, AUM would be $1,000 per year, which would only provide me 4-5 hours of consultation time or 2-3 quarters of advice. Given that I've spent 1-2 hours already just explaining my situation in interviews, I doubt 5 hours would cut it for a set-up.

Some advisers do have an option to pay for one "engagement", which seems a fuzzy term but might be what I'm looking for. Anyone know what one "engagement" might constitute?

Maybe down the line, once I shed the RIA the fee-based structure would work handsomely.

[mighty58]

It was not my intention to recommend any specific advisor over another, but as you said you wanted a US-expat focused RIA, it seems you just need to look at the "expatriate" or "cross-border" categories within XY (instead of "Japan" specifically), where you'll find plenty of choice.

The general advice for fee-based, no-sales advice over AUM-based money manager advice stands though... but, it sounds like you've already made up your mind and started down the path, and you also seem aware of all the likely hassles this path will entail but are willing to put up with it. So better to be where you are now than to be surprised later. AUM-based advisors become a progressively worse deal as your assets grow, because the fundamental advice doesn't really need to change much year to year, so the one silver lining is that you're at the lower end of the scale (if you're at $100K) in terms of costs, so it shouldn't cost you too much out of pocket than fee-based. Good luck with your journey.

[toscanini]

I appreciate the advice and, like I said, would prefer the long-term to avoid AUM-based fees. Perhaps my tougher tone arose because I understand the overall tone in this forum is critical of AUM so I wanted to challenge that by asking under what conditions / in what context would an AUM / full service adviser be worthwhile. That specific context was "short-term setup", which I think has some benefit but I am not sure.

I've also read some less-than-nice stories about "breaking up" with investment advisers and am still dubious about how easy they make it to cut off advising from one month to the next. In theory this is possible, but I wonder what happens to various orphaned funds that cannot be maintained due to lack of US-based RIA, or any other unforeseen things I can't imagine.

[IWantToBreakFree]

Any updates Thun or any other AUM. One reason I'm considering an Thun is they are able to hold my IRAs. I've called IKBR and they don't take IRAs from the states.I am thinking like Toscanini and trying for a couple of years. And also maybe compare what I can do and what they can do and do a combo. No one likes to pay but sometimes it is worth it.