Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
so im in a position where a trust fund has been created which will benefit myself and my two brothers upon the death of my old man. my dad uses jpmorgan private bank for most of his investing these days and so naturally he set the account up with them and they started the process of managing the investing. i sat in on a meeting with them to discuss its performance for the first few months, i think they are being more aggressive than my dad but less aggressive than me. my dad said to me that he would let me take over and choose the investments if thats what i wanted to do. on one hand, i want to make the money grow as much as possible. on the other hand, id be taking more responsibility and if i add risk now, i could be in trouble if there is that correction that many people are expecting. they charge a fee for their services, but it would be the lowest possible fee they would charge for this type of work. im unsure of what i want to do exactly. i could just tell them to increase their risk level to get better returns.
so im in a position where a trust fund has been created which will benefit myself and my two brothers upon the death of my old man. my dad uses jpmorgan private bank for most of his investing these days and so naturally he set the account up with them and they started the process of managing the investing. i sat in on a meeting with them to discuss its performance for the first few months, i think they are being more aggressive than my dad but less aggressive than me. my dad said to me that he would let me take over and choose the investments if thats what i wanted to do. on one hand, i want to make the money grow as much as possible. on the other hand, id be taking more responsibility and if i add risk now, i could be in trouble if there is that correction that many people are expecting. they charge a fee for their services, but it would be the lowest possible fee they would charge for this type of work. im unsure of what i want to do exactly. i could just tell them to increase their risk level to get better returns.
what would you do?
A. Chasing returns is a bad idea.
B. How do your brothers feel or will they feel if your strategy fails?
C. What makes you feel your ideas about investing will fulfill your expectations?
True story: Years ago the dot com boom was on. I was a financial planner with Ameriprise (back then it was American Express Financial Advisors). Woman came in and wanted to invest about $200,000 and she was a teacher with no discretionary income (no money to invest monthly, spent everything she made.....seemed very odd that she had this lump sum (200K) but didn't have $20 a month leftover to save. So she started with 25% expectations, figuring with that ROR she could quit her job and just live on the returns......(even at the time this was a suicide mission at best). She wanted guarantees that it would turn 25% and not lose principle. Now keep in mind stocks like Red Hat were $200+ a share and rising $10 a day yet the company never made a nickel, CNBC was like watching a Powerball jackpot grow with all the hype!
We couldn't get through to her that there were no guarantees never mind 25% and quitting your job when you spend every nickel you make now would be a disaster with 24/7 free time. We declined to work with her..............We found out later the 200K was her parents nest egg that was currently invested in CDs! She was trying to "invest" their money, pay them the paltry amount the CD's paid and keep the net proceeds for herself!
Moral of the story, invest slowly and it may turn out to be better in the long run rather than putting all the money on the table and betting on one hand......
A. Chasing returns is a bad idea.
B. How do your brothers feel or will they feel if your strategy fails?
C. What makes you feel your ideas about investing will fulfill your expectations?
True story: Years ago the dot com boom was on. I was a financial planner with Ameriprise (back then it was American Express Financial Advisors). Woman came in and wanted to invest about $200,000 and she was a teacher with no discretionary income (no money to invest monthly, spent everything she made.....seemed very odd that she had this lump sum (200K) but didn't have $20 a month leftover to save. So she started with 25% expectations, figuring with that ROR she could quit her job and just live on the returns......(even at the time this was a suicide mission at best). She wanted guarantees that it would turn 25% and not lose principle. Now keep in mind stocks like Red Hat were $200+ a share and rising $10 a day yet the company never made a nickel, CNBC was like watching a Powerball jackpot grow with all the hype!
We couldn't get through to her that there were no guarantees never mind 25% and quitting your job when you spend every nickel you make now would be a disaster with 24/7 free time. We declined to work with her..............We found out later the 200K was her parents nest egg that was currently invested in CDs! She was trying to "invest" their money, pay them the paltry amount the CD's paid and keep the net proceeds for herself!
Moral of the story, invest slowly and it may turn out to be better in the long run rather than putting all the money on the table and betting on one hand......
a 25% guaranteed return would be sweet.
A. i dont believe im trying to "chase returns." i would just have a sum of money to invest so im looking to invest it.
B. i would discuss it with my younger brother. my older brother isnt currently on good terms with my dad, so my dad wont really care about his input.
C. i dont have any brilliant idea about investing. i would just invest in mutual funds and get my allocation to be an aggressive one. its a long term thing, dont expect the money to be touched for 20+ year. so i dont have a problem riding out some bad times. i just dont want to be in the position where i take the control and soon after we take a hit.
i dont have any brilliant idea about investing. i just dont want to be in the position where i take the control and soon after we take a hit.
I think you have your answer right there.
If you're not comfortable taking the blame if things go south, you shouldn't do so, particularly if you don't have any special expertise in investing.
Unless the current setup is completely jobbing you on fees, I'd let them keep running it. Why take on the risk of having your brothers sue your butt 20 years from now?
If you're not comfortable taking the blame if things go south, you shouldn't do so, particularly if you don't have any special expertise in investing.
Unless the current setup is completely jobbing you on fees, I'd let them keep running it. Why take on the risk of having your brothers sue your butt 20 years from now?
im thinking maybe my best tactic will be to keep them but tell them to add some risk for more potential upside. when we met, they were answering all my questions but they werent of the notion that id be the one telling them how to invest. id still need my dad to make that clear to them.
Who is the official trustee, and is the trust revocable/irrevocable?
I manage a few trust accounts. I only listen to the trustee, and never discuss sensitive information with, or take instructions from the beneficiaries.
... they were answering all my questions but they werent of the notion that id be the one telling them how to invest. id still need my dad to make that clear to them.
It's probably not that simple.
The role of a trustee is to act in the best interests of the beneficiaries. This is often different than doing whatever the beneficiaries want. After all, if they did whatever you and/or your brothers said, what would be the point of the trust?
As an extreme example, suppose you go and order them to give you $2 million from the trust so you can open a chain of gourmet hot dog stands. They will tell you to pound sand.
One obvious reason is that it's not in the best interests of your two brothers to have part of their share of the trust poorly invested . A second, less obvious reason is that it's not in YOUR best interests, even though it's your business idea and what YOU want done with the money.
Now, you can still probably get them to invest more aggressively, but it's not going to be by telling them, "My dad said so."
Here's the best approach, IMO: These guys are, more than anything, concerned about getting sued 20 or 30 years down the line for making "unsuitable" investment choices. You and your brothers ( even the one on the outs with Dad) have to give them some shield against that. A written statement, signed by all three of you, and your dad, might work. State that your desired goal for the trust is aggressive growth, blah blah, and that all of you are aware of and willing to bear the risk of loss associated with such investments.
The role of a trustee is to act in the best interests of the beneficiaries. This is often different than doing whatever the beneficiaries want. After all, if they did whatever you and/or your brothers said, what would be the point of the trust?
As an extreme example, suppose you go and order them to give you $2 million from the trust so you can open a chain of gourmet hot dog stands. They will tell you to pound sand.
One obvious reason is that it's not in the best interests of your two brothers to have part of their share of the trust poorly invested . A second, less obvious reason is that it's not in YOUR best interests, even though it's your business idea and what YOU want done with the money.
Now, you can still probably get them to invest more aggressively, but it's not going to be by telling them, "My dad said so."
Here's the best approach, IMO: These guys are, more than anything, concerned about getting sued 20 or 30 years down the line for making "unsuitable" investment choices. You and your brothers ( even the one on the outs with Dad) have to give them some shield against that. A written statement, signed by all three of you, and your dad, might work. State that your desired goal for the trust is aggressive growth, blah blah, and that all of you are aware of and willing to bear the risk of loss associated with such investments.
im pretty sure my old man can direct them to do whatever he wishes them to do. i dont know all the details, but i dont really see how they could require that they are the ones to select the investments even against the wishes of the person putting the money in.
Who is the official trustee, and is the trust revocable/irrevocable?
I manage a few trust accounts. I only listen to the trustee, and never discuss sensitive information with, or take instructions from the beneficiaries.
the old man is the trustee and id guess the trust is revocable. my dad isnt one to lose control over anything. even if the chase guys dont take instruction from me, i will have my way through the old man so this isnt really my issue.
all i know is the trust is supposed to be split between me and my brothers at my old man's death. at least thats what my dad says, you never know with that guy. is that a similar deal for the ones you manage? do you invest them aggressively of conservatively? id be interested in knowing any details about how they are looked after.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
