Private Banking useful if financially-naive spouse has to handle finances?

[prudent_one]

Our bank invited us to sign up for their Private Banking service. I looked at the website to see what the deal was. I saw nothing that was really interesting. Already have free checking and checks, don't imagine I'd be needing a loan, I don't have a business. We're not at a level where multifamily offices are offered to us. No financial advisor, no accountant.

Looked to be a gateway to wealth management and investment advisors. I don't imagine we'd need those either as I'm a DIY money manager. I can picture her needing help if I go first, as I do all the money stuff (she pays the bills with online billpay).

It doesn't look like there's any fee just to be in the program. Would I be smart to get enrolled in this in case I go first, so she has some existing relationship in place to help her with the finances? No one in either family is able to do this. We've only used a lawyer to get a will and POA docs done some years ago, so I wouldn't even say we have a lawyer.

If private banking would solve this, I'd give them some money to manage now just so they can make a buck and won't give her the cold shoulder down the road.

My concern is having something in place (or ready to put in place) if I go first as while she's not a spendthrift, she's dyslexic with numbers and bad with math, and really could use a trusted person to work with. Otherwise a day might come when someone quotes her $30,000 to replace the roof and she won't have any idea how ridiculously high that number is, since she might see it as $3,000 and think that's less than the $6,000 we paid last time.

Any thoughts appreciated.

[OldShooter]

No. A bank will be no help with this. Interview small financial planning firms to find the right 'fit.'

[Texas Proud]

The 'fee' is the large balance you have to have at the bank to get into private banking...



I also do not think that the people there are going to be a good FA.. I worked at a bank and the FAs that I saw were not that great... they were salesmen...


I am looking at getting someone at a Fidelity or Schwab to 'manage' my accounts for free just so when I pass there will be someone who can help DW... I know Fidelity is free but not sure about Schwab...

[SecondAttempt]

I am at a similar quandry. My partner is intelligent but extremely conservative financially with most of her money in a savings account because of how she was raised. I was trying to get her to dollar cost average into stocks beginning early 2019 but did not pressure. She was smart not to follow my advice.

But she will likely outlive me and I am looking for ways to set her up to make good decisions. I keep minimal money in banks and have most money in low cost brokerages and mutual fund companies that offer little advice. But I don't need it. Vanguard and T. Rowe Price are the main ones.

I am looking to switch to a local bank for independent reasons. I have narrowed the choice down to 2. Her cousin is a private banker at one of them although not the branch I would be at. I have met and would trust the cousin but I am not sure if choosing her bank would be a pro or con. I would not ordinarily view a family member working for a bank as trusted but Hawaii is an interesting place where family comes first.

[MarieIG]

A trust for liquid assets and property; with some income (i.e. SS, pension, annuity) going directly into her checking out for discretionary items?

[TheWizard]

I don't think any private banker or financial advisor is going to save the OP's wife from various elder scams, such as the $30,000 roof example.
To do that, someone close would need power of attorney over her financial affairs.

I don't have any personal history on how best to go about this...

[Texas Proud]

Quote:

Originally Posted by TheWizard I don't think any private banker or financial advisor is going to save the OP's wife from various elder scams, such as the $30,000 roof example. To do that, someone close would need power of attorney over her financial affairs. I don't have any personal history on how best to go about this...

It is almost impossible to prevent elder scams no matter how close someone is to them... a couple of small ones happened to my mom when she had dementia, but I was able to stop them from becoming big ones...



I think this thread is for an inexperienced person in financial matter including investing.. my DW is really smart but has almost no financial brain cells... she would not get scammed until her brain declines but would probably make mistakes with the money going forward when I am gone... I just want someone who will prevent a major mistake being made..

[Finance Dave]

I wonder about this option...

Write up a VERY simple investment plan should you go first. For example, three ETF funds...

1) Equities such as an overall stock fund - 30%
2) Bond fund or something like a dividend paying stock fund - 20%
3) Fixed investment such as a MM fund or similar - 50%

Develop a simple withdrawal plan and write it down, for example "Withdraw 4.5% of the year ending balance from the portfolio MM fund each March, then reallocate the balances per the above percentages. Have the amount sent to checking account via direct deposit."

Then select a trusted family member or local financial advisor you trust, and put their name/address on the sheet. Sit down with your wife and that trusted family member, and say "This is what I want done should I pass first...do you understand? Do you have any issues with it?"

Keep in mind the portfolio and percentages are just examples...but the idea is to keep it very simple. IMO having a professional "manage" the money will not return any more than if you set up such a simple portfolio, after adjusting for their fees.

Would that work?

[Bamaman]

In the old days, having a private banker meant you wouldn't have to stand in line in the bank lobby with all the commoners. You'd go to an office upstairs where everyone would call you by name and offer you coffee while doing your business.

But the new day is electronic banking, and bank lobbies are essentially empty. There might be one or two young "bankers" and ten empty desks, and they don't know much about anything. All correspondence is done by the internet--and no one can even help your wife balance a checkbook.

So essentially everyone's on their own from the service side today.

You hit it right on about "private bankers." They're trying to get you into their investment services, but no banks can touch the available financial products of a Fidelity or Schwab. And bank services are priced expensive and are to be avoided.

[Badger]

Quote:

Originally Posted by Finance Dave I wonder about this option... Write up a VERY simple investment plan should you go first. For example, three ETF funds... Develop a simple withdrawal plan and write it down, for example "Withdraw 4.5% of the year ending balance from the portfolio MM fund each March, then reallocate the balances per the above percentages. Have the amount sent to checking account via direct deposit." Then select a trusted family member or local financial advisor you trust, and put their name/address on the sheet. Sit down with your wife and that trusted family member, and say "This is what I want done should I pass first...do you understand? Do you have any issues with it?" Keep in mind the portfolio and percentages are just examples...but the idea is to keep it very simple. IMO having a professional "manage" the money will not return any more than if you set up such a simple portfolio, after adjusting for their fees. Would that work?

I did something similar a few years ago. I simplified all investments. Vanguard has the IRAs and are set up to automatically sweep dividends into a MM account and automatically calculate the RMD to move the money into a taxable account. Stocks are with Schwab and should never be needed so they will go to inheritance. CDs are in our CU along with checking and savings accounts. There should be no need to manage any of the accounts and the is no need to buy or sell anything.
Then I have instructions on how to withdraw for living expenses and identifying the order of withdrawals. It also tells what to never do.
There is also a list of monthly, semi-annually, and annual expenses and dates for payments. There is also a list of every contact person or company (life insurance, home insurance, lawyer, investment reps, etc.)she will need complete with addresses and phone numbers.
There is a bit more to it but everything she will need is spelled out in logical sequence and categorized in simple and easy to follow lists. This is good for me to remind me of the plan as I get older. All of this is updated and discussed with my wife, printed and place in a small fireproof safe.
Since her daughter is in the area I still need to go over the plan (no need to reveal the amount of money).

Cheers!

[prudent_one]

I know having the trusted family member or financial advisor would be a solution but the dilemma is I can't know in advance if they would be trustworthy. I guess I was hoping that by stashing some funds in a bank to qualify for "private banking", that would make it possible for her to ask questions such as the roof thing. "Does this sound right?" Having an impartial financially-savvy person to bounce things off of.

It looks like she ought to rely on her friends for sanity-checking big expenses and I should find a financial advisor and get a relationship going now even though the fees will make me grit my teeth. I'll use that technique of laying out expectations and get agreement that the advisor will honor it, but without saying it's primarily for her protection. I could hope that the advisor just comes to believe she is able to sniff out bad advisor behavior and won't try anything.

There has to be a business opportunity for charging "per question" and getting an answer from a trusted professional who is impartial. Things like needing to cash out some investments and how to choose which ones, or what if I take 10% more from the portfolio yearly, etc. Doesn't make sense to pay full AUM fees when there's hardly any management to be done and things run essentially on auto-pilot. I get that advisors only want AUM but there's a need that's unmet.

I had a financial plan done a few years ago by a local advisor. Very comprehensive and detailed. Cost $800 and I'm sure 95% of it was just spit out of a computer program. But the guy impressed me by giving more advice than was advertised with that plan and he made a pitch for continuing the relationship under an AUM arrangement that I declined. I called him a few years later and asked to do the plan again since some circumstances had changed, he declined politely. I took that as a sign that financial advice is hard to come by on a "pay-per-use" basis and the $800 thing was a way to bring in AUM clients. If you weren't going to bite on that, no sense talking to you.

Appreciate all the inputs.

[Texas Proud]

My question is WHY?


What is your life expectancy? Do you really want to pay a fee to a FA for that many years for 'insurance'? Heck, the FA might (probably) will be long gone by the time you pass....


That is why I like Fidelity (and maybe Schwab, still have to check them) where you can have a FA for free now but if your DW needs more hand holding can hire them for a fee after you pass...

[Finance Dave]

Quote:

Originally Posted by Badger I did something similar a few years ago. I simplified all investments. Vanguard has the IRAs and are set up to automatically sweep dividends into a MM account and automatically calculate the RMD to move the money into a taxable account. Stocks are with Schwab and should never be needed so they will go to inheritance. CDs are in our CU along with checking and savings accounts. There should be no need to manage any of the accounts and the is no need to buy or sell anything. Then I have instructions on how to withdraw for living expenses and identifying the order of withdrawals. It also tells what to never do. There is also a list of monthly, semi-annually, and annual expenses and dates for payments. There is also a list of every contact person or company (life insurance, home insurance, lawyer, investment reps, etc.)she will need complete with addresses and phone numbers. There is a bit more to it but everything she will need is spelled out in logical sequence and categorized in simple and easy to follow lists. This is good for me to remind me of the plan as I get older. All of this is updated and discussed with my wife, printed and place in a small fireproof safe. Since her daughter is in the area I still need to go over the plan (no need to reveal the amount of money). Cheers!

This is excellent, and I can't tell you how upset I get with attorneys when there is a conversation like this...

Me: Estate planning takes a lot of time and thought, we are working through it.
Atty: No it's not, drafting a will is easy, we can have it done in a week.

Grrrrr....drafting a will is not estate planning!

Our estate plan is in a 2" thick binder. And keep in mind we have no children and it's first marriage for both of us, so about as simple of an estate as you can get. Why does it take so much time and thought? Because we have gone to extensive details to make it easy on the other person. The will is fairly simple, but there are also health care proxies and other documents such as POAs. Then we have a list of all people we want to notify...yes they are in our phones but many in our phones are simply casual contacts or contractors we need once a year...no need to call them! Then there is a list of all financial assets, account numbers, phone numbers, etc. Then there are funeral arrangements...do you want buried or cremated? What type of casket? What clothes do you want dressed in? Who will do your eulogy? What about items you don't want in the will...for example "make sure my brother gets all the family photos in the shoebox in my closet." Then there is a list of passwords to all the websites I visit....my list is over 125 long (changes so often that I simply refer to an Excel file that is password protected, and the passwords are "coded" inside that spreadsheet...but at least she will know the name of the spreadsheet so she can open it and print it out). I also have a 1969 Camaro that's very nice...she has no idea how to sell it so I have a 1 page paper with the National Camaro Club contact info...they can help. What about our dog if we both die at the same time...well we found a local dog care company owner and put him in the will with $2,000 to care for our dog until he could find her a home...and we went to his business and spoke with him about it. What about my woodshop full of power tools...how is my wife supposed to dispose of those? I included a list of all the tools, model numbers, serial numbers, approximate values, and so on...so she can provide it to an auctioneer for easy sale.

The list goes on and on...but I just get angry when attorneys only think about the will.

[Texas Proud]

Wow Finance Dave... to me that is overthinking it...


When my BIL died it was up to my sister to give away his tools or sell them.. she made the decision on cremation... she was able to figure it all out without a 2 inch binder that she probably would not have followed anyhow...


Now, my sister has paid for a cremation... just call an 800 number and they will take care of everything... I get to handle the rest.. I will say that I do know she has a list of her major physical assets and who she wants to get them, but that is it...

[Finance Dave]

Quote:

Originally Posted by Texas Proud Wow Finance Dave... to me that is overthinking it... When my BIL died it was up to my sister to give away his tools or sell them.. she made the decision on cremation... she was able to figure it all out without a 2 inch binder that she probably would not have followed anyhow... Now, my sister has paid for a cremation... just call an 800 number and they will take care of everything... I get to handle the rest.. I will say that I do know she has a list of her major physical assets and who she wants to get them, but that is it...

LOL. Different strokes for different folks. I'm sure people do "figure it out", but I'd rather have a lot of the legwork done.

Do you know which of her friends to notify?