About a year ago, a relative asked me to help manage his money. He had been paying a ~1% asset management fee with Goldman Sachs Asset Management (GSAM), even though he wasn’t their typical high-net-worth client. The account had been set up through his ex, but since he wanted a clean break, he was ready to move his money and asked for my guidance.
We scheduled a call—just like I do with consulting clients—to go over his financial situation, goals, and concerns. From there, we created an investment strategy designed to preserve his lifestyle and reduce the risk of running out of money. As an artist, finance was not something he really understood or ever got into.
Since he was also looking for a new brokerage, I recommended Fidelity, where I’ve had my accounts for over 20 years. I'm familiar with their platform, and with his permission, I’d be able to view his portfolio and make trades on his behalf.
By transferring his assets out of GSAM, he eliminated the 1% management fee and I rebuilt his IRA portfolios using low-cost ETFs with a similar asset allocation—saving him thousands a year in fees while maintaining long-term growth potential.
However, after about a year, I don't want to manage money for anyone for free again. It's nothing personal. I just want to preserve more time and energy for my family.
Why I'd Like To Stop Managing Money For Free
We agreed on an asset allocation, and I built it out for him. For the second half of 2024 and into early 2025, everything went smoothly. His portfolio steadily climbed to all-time highs, and I didn’t hear from him once. No problem. I felt proud to help grow his wealth, especially since he doesn’t earn much active income. His portfolio will be his main financial support in the future.
But in late March and early April 2025, his portfolio took a hit due to the trade wars, and I got a sudden text asking what was going on. So we got on another call and I explained the situation and tried to calm his nerves.
Then came the inevitable question: “What should we do now?”—a fair concern for anyone who has entrusted their money to someone else.
But now I started to feel the pressure. What if I made the wrong recommendation at the wrong time?
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To Some, Outperforming Is Not Enough
I reminded him of our game plan and emphasized the importance of staying the course. I also shared my outlook on why the markets were likely to rebound in the second half of the year—citing factors like trade agreements, deregulation, and potential tax cuts.
Given we had constructed a 60/40 portfolio, when the S&P 500 was down ~20% year-to-date on April 8, his portfolio was only down 8.8%. From my perspective, that was a win!
But from his perspective, I had still lost him money. And since he wasn’t a fan of the current administration, the situation felt even more frustrating to him.
It didn’t really matter that I highlighted his portfolio’s outperformance or the rationale behind a balanced allocation. He was disappointed—and that, in turn, chipped away at some of my emotional resilience.
It doesn't feel good to help someone who is disappointed in your help.
Already Stressed With My Own Losses
At the time, I was already stressed about my own portfolio losses, which were approaching seven figures. I was buying the dip, watching values continue to fall, and doing my best to stay calm. But deep down, I felt like a fool for jumping in too early with the proceeds from my stable real estate sale.
His stress added to mine, and I had to compartmentalize my own emotions to reassure him. It left me with less patience for my wife and kids, which was the biggest negative since I love them more than anything. And when I’m losing a lot of money, I admit I tend to have a shorter fuse.
During the bull market, I didn’t hear a word of acknowledgement. But as soon as things took a turn, I was met with concern and urgency. Again, totally understandable. However, I was cast in the role of an unpaid employee, bringing back the very feelings of underappreciation that pushed me to leave the traditional workforce.
If I’m expected to actively manage someone’s portfolio and provide emotional support and education during downturns, there needs to be clear compensation or boundaries. Otherwise, I’d rather preserve my energy for writing and taking care of the kiddos.
After being free from a day job since 2012, I probably have become overly sensitive to anything that reduces my sense of freedom and joy. As a result, I'm not cut out to be a money manager at this stage in my life.
The Problem With Double Fees
I was happy to help move my relative’s funds away from GSAM to reduce the double fees he was paying. He was being charged an asset management fee of about 1%, plus fund fees ranging from 0.5% to 1.6%—mostly on Goldman-managed funds.
Now, I’m not against hiring an asset manager if you genuinely don’t have the time, interest, or knowledge to manage your own money. Paying a professional to build a risk-appropriate portfolio is far better than sitting in cash and missing out on decades of compounding. A good manager can also serve as an emotional buffer—helping prevent panic selling during downturns and reckless speculation during bull markets.
But paying double fees—especially as your portfolio grows—adds up quickly. A $5,000 annual fee on a $500,000 portfolio is one thing. But paying $25,000 on a $2.5 million portfolio, plus another $12,500 to $40,000 in fund fees, starts to feel excessive.
He needed to move his money and I was glad to help him do it.
Only Reason To Pay Double Fees
The only real justification for such fees is if the manager offers access to exclusive private investments with meaningful upside—say, a hot AI company likely to IPO at a much higher valuation in a year or two. But in this case, there was no such access.
I reviewed the historical performance of these funds, which was often difficult to find and intentionally opaque. But by simply comparing his portfolio value from a decade ago to when I started managing it, the compounded returns were clearly underwhelming. The double fees weren’t just costly—they were a drag on long-term performance.
Personally, I’m not interested in paying another 0.5%+ to own a repackaged basket of public stocks that attempts to beat an index.
In Defense of Getting Paid to Manage Money
Most DIY investors, myself included, aim to minimize fees. But after managing a relative’s portfolio for a year, I now get why financial professionals charge what they do—the emotional labor is real.
Managing money is relatively easy when markets are rising. It’s during downturns that things get difficult. And when you're managing money for a family member, the emotional stakes are even higher. You really don’t want to let them down.
Advisors aren’t just managing assets; they’re managing expectations, fears, and behaviors. For that reason alone, they deserve to be compensated.
That said, fees should be fair and transparent. A flat 1% management fee feels outdated. Something less—with a tiered structure that declines as assets grow—makes more sense.
The Three Main Benefits Of Hiring A Money Manager
The real value of hiring a money manager is peace of mind. Knowing someone is actively looking after your portfolio means you can focus on doing what you enjoy or excel at, without constantly worrying about market volatility or portfolio drift. Reducing the mental load is huge, especially for parents juggling work and childcare. During times of stress, it's reassuring to know someone else is thinking about ways to protect your wealth.
The second big benefit is consistency. A good advisor helps you stay disciplined—investing regularly, staying diversified, and adjusting risk over time. Even as a committed DIY investor, I’ve had long stretches where I didn’t invest simply because life got in the way.
The third benefit is accountability. A trusted advisor can act as a financial coach, helping you follow through on your goals. It’s one thing to know what you should be doing—it’s another to actually do it. Regular check-ins and objective feedback can keep you on track, especially during major life transitions or periods of uncertainty.
A financial professional who helps with these three areas is well worth it. If you’re receiving proactive service and your portfolio is meeting expectations, great. But if not, it’s only rational to explore better options.
I'm Stuck Managing the Money—But Not My Emotions
I’m OK to help my relative create an investment plan. After all, it’s something I’ve done for others for over 15 years. I also love to save people money when there is a clear way to do so. But I also need to protect my time and mental well-being, which means learning to emotionally detach.
My long-term goal is to teach him how to manage his own money. The challenge is, he struggles with learning about finances. He is not an FS reader and probably never will be. Ironically, this makes him the exact type of person who benefits most from having someone manage his money for him.
So while I’ll continue to oversee his portfolio, I’m adjusting both the investment strategy and my mindset to reduce stress. He's on board with the new, slightly more conservative asset allocation, which falls within an appropriate range for his age and long-term financial goals.
Further, to help offset the emotional load of managing his portfolio for free, I remind myself he's saving at least $20,000 a year thanks to me. That cushion gives both of us more resilience in down markets. So the next time a concerned message comes through, I’ll remind both of us just how much he’s saving.
Appreciation Goes A Long Way
If someone is managing your portfolio for free, don’t forget to show your appreciation once in a while. A simple thank-you note will do. And if you’re really thoughtful, perhaps send them a small gift or treat them to a nice meal at McDonald's if you’re making lots of money. You can do it!
And if you don’t have someone to manage your money for free, consider hiring a money manager at a reasonable price. The reduction in stress alone may be well worth the cost.
Oh, and if you’re wondering, my relative’s investments have since rebounded and are now at all-time highs. Let’s go!
Readers, do any of you manage a friend or relative’s money for free? If so, how have you structured that arrangement—and how do you handle the stress when they’re anxious about market volatility, especially while your own portfolio is also taking a hit?
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Spot on! Reminds me of the first advice you get when you finish law school: don’t give free legal advice to family.
You nailed all the main reasons why it tends to not be a good idea. Still, it’s impossible to avoid.
We all want to help people, especially our family members. We ignore the fact that the emotional toll gets amplified when you’re helping someone so close to you. It’s hard to not bring your clients’ problems home with you. This is a big reason why lawyers rank so poorly in job satisfaction, stress, depression, substance abuse, etc. Think about how much heavier it gets when it’s your family.
There’s also a hidden fear that if you don’t do a perfect job (for free), your family member may think you’re a phony. As irrational as it is, these thoughts creep in. It doesn’t matter that he asked you to help with a DUI even though you have no experience in criminal law.
Great post, Sam!
Matt
Thanks Matt for sharing your perspective as a lawyer. I wish we’d all be more appreciative for the free stuff we get and the free help others provide us. Why do we have to wait until we no longer have it until we can appreciate it? Ah well.
My family members do not have a finance background and historically have not been interested in the stock market and investing. I have a background in finance and banking, so its’ been a bit frustrating to watch the missed opportunities over the years as I have encouraged them to learn the basics of managing their money. My wife has handed over the reins of her portfolio to me and I share some of the same challenges that you mention in your post (no concern or interest when markets are good, but near panic when markets are bad). For my mom, I put her into a Vanguard S & P 500 fund and have been hands off and that has worked relatively well. My sister has been contributing to her 401k and also tracking the S & P as well. They may never hit a homerun, but glad they are achieving upside for the future and they are not taking on too much risk and not taking it out on me when the markets turn. LOL
Totally hear you. It can be tough when you’re trying to help loved ones with something so important, but they just aren’t that engaged.
Sounds like you’ve found a solid balance though, keeping things simple and steady for your mom and sister, while managing the emotional ups and downs that come with handling your wife’s portfolio. Getting them to at least participate and stay the course is a win in itself. Let’s hope the bull market continues for life!
From your newsletter, “The biggest lesson? Be careful about doing too much for free for family and friends. Set boundaries. Either help them learn to manage money on their own or guide them to a more sustainable solution. Otherwise, resentment and burnout may follow.”
This is so true, I have experienced it, not for money management but in general life.
I’m a client of empower/ personal capital for over 10 years now. Happy with their service.
Not sure why are recommending them if you are only using their free service
Great to hear!
I recommend them precisely because they have free financial tools and now they are offering a free financial analysis for readers with over $100,000 in investable assets. Got to love free.
And I’m also sure that there are some people who absolutely would benefit from becoming a client as well.
I’ve been using Empower since 2012 and consulted with them part time from 2013 until 2015. In addition, I even own shares in Personal Capital before their acquisition by Empower. They provide a lot of value and there’s something there for everyone.
As a long time affiliate partner, I get the heads up whenever there are new offerings and initiatives. Then I highlight what I think is helpful. And I’m on a two-month break from my consulting services, so this is a great solution.
A mid-year review is always good. Time to enjoy the bull market while it lasts!
I completely understand. When I left I managed 170 million dollars. This was in the late 1980’s. Over one billion in todays dollars. I have had numerous people offering to pay me to manage their accounts etc. I tell them I will teach you how to do it but I am not going to do it for you. Usually this ends the conversation with the exception of a few. And those few are doing quite well.
That makes total sense. Managing other people’s money can be incredibly stressful, especially when you’ve already put in your time and proven yourself. I like your approach—teaching instead of doing. It empowers others and filters out the ones who aren’t truly serious. It’s no surprise the few who stuck around are thriving.
No good deed goes unpunished, finances with family is a minefield, the list goes on and on. Also, since you weren’t getting fees, there is the appearance it has no value. Sorry for your grief.
Exactly. It’s wild how the lack of fees can actually make people question the value, even when you’re offering them expertise they couldn’t afford elsewhere. Lessons learned the hard way tend to stick the longest.
I watched a video of Josh Brown, a New York investor and wealth manager. He was asked about flat-fee vs. percentage-fee compensation. He would never work for a flat fee because his clients always rated his performance based on their portfolio returns. The clients said they wanted hedging and risk management, but would always howl when the portfolio dropped, regardless of how the losses compared to an index. So, it makes no sense to accept less than a percentage of the returns.
In theory, a professional financial advisor has a team of analysts assisting with investment research, and that team must be compensated. So, the fees are necessary. Of course, all these activities happen behind the scenes. I think it is the main reason commission-based financial advisors are so popular–their advice is “free”!
I also gave up on managing investments of my friends and family. It is such a thankless task. It is like going into business with them, and I would not recommend doing that with friends and family either.
True on having infrastructure and a team behind the advisor to manage portfolios. That should make their jobs much easier than an independent, fee-only advisor.
That said, they still need to be compensated for the service they provide and the work they do for their clients.
I remember during a PT consulting gig, working with a woman at a fintech company and she had been holding 60% of her portfolio in cash since 2011 until 2015. She just didn’t know what to do and if she had just hired a financial advisor or let her own product manage her money, she would have been up 50% more after fees.
So what’s the saying? Pennywise, pound foolish. If you need help in figuring out how to invest, please find some help. Over the long-term, investing in risk assets pays off.
Sorry to hear about your burden from your relative. That’s not an easy situation to navigate continuously.
I manage all of my mother’s finances. It’s really a thankless job. I have to do everything from pay her credit card bills, move money around to manage her cash flow, pay random invoices, check her emails every day, deal with contractors, lawyers, creditors etc. It actually rather sucks and I don’t enjoy it because I have so many other things to do for my own family. But her situation got so bad I had to interfere and take over. At least I feel I have some control to save her from herself. But taking care of someone is a personal sacrifice that isn’t met with the same amount of appreciation for the effort and time it takes. I just try to remind myself I’m helping her do something she is unable to do herself.
That’s great that you help your mom. Protecting her from spending too much in retirement and taking on too much debt is important. Also, there is a lot of leakage and erroneous or fraudulent expenses that tend to happen. Having you or someone regularly go through it is a good thing.
I hope she appreciates your effort!
“But from her perspective, I had still lost her money. And since she wasn’t a fan of the current administration, the situation felt even more frustrating to her.”
And that my friend is the issue. Facts not feelings.
Good day for your Nike stock. Congratulations
Wow! I hadn’t noticed until your comment. The company has been such a dog that I locked it up and forgot about it.
Gonna buy the kids some Ululani’s shaved ice with a scoop of banana macadamia nut ice cream ($3 extra) to celebrate today then!
It’s natural and laudable to want to help, but you’ve highlighted the reasons why it can be a thankless effort. I think it’s reasonable in a situation where an elder no longer has the acumen or tech-savvy to continue DIY. Although that can also be abused. There’s no easy answer, short of paying more or less fees. I’ve been content with the Wealth Management division of a local bank. Fees are reasonable and they answer the phone. Not choosing to manage one’s money is also a choice.
No easy answer indeed. But it’s good to walk in the shoes of a financial advisor for a year to better appreciate what they do. If you have a dozen clients or more, that stress can be quite overwhelming during a downturn.
It takes a lot of emotional energy for me NOT to want to sell everything and just earn risk-free passive income at 4%+. So the more concerned conversations I have with friends, family, and others… the closer I get to just being 100% satisfied with what I have. Maybe not a bad thing before one dies.