Alice Chen

I've worked with 3 different private wealth managers over the past 5 years, including @GoldmanSachs. To date, I can say that: A. They have provided virtually no value in growing my net worth. They promise access to exclusive investment opportunities, but the investments aren't nearly as good or as exclusive as you'd think. Elliott Management has $71 Billion under management. How exclusive do you think it is? Every wealth manager pitched me "exclusive access" to Elliott. It's the fucking Vanguard of private wealth managers. Forerunner Ventures? They raised $1 billion dollars. Nothing you couldn't get access to if you really wanted/tried. But to funds you can't get access to, they can't either. Sequoia? Not a chance in hell. B. They are structured against success. You know what I want to invest in? The small scrappy guy who bought two properties in SoCal or Idaho or Oklahoma and learned how to work with contractors and flipped them. Now, he wants to buy 10 or a small apartment building and do the same. But Private Wealth Managers are all focused on acquiring and retaining large, rich clients. Why? Because their compensation is based on a percentage of money you have with them. If you have $10M invested with them, they make less than if you have $100M. So they want big fish. As a result, they can't invest in a guy raising $10M to buy real estate in Coral Gables Florida, because he's too small for them. They can only invest in the Elliots of the word. C. The idea that they are going to set you up with unique advisors who will be helpful is malarkey. The people they set you up with are run of the mill attorneys or accountants. They aren't creative. They aren't thoughtful. They aren't amazing. If they were, they'd hang up with their own shingle and make a ton of money. You think the best tax attorney works at Goldman Sachs where he makes $1m a year? He can start his own firm and make 10X that. D. They aren't smarter than you. The Private Wealth Manager I work with today forecasted a soft landing with no meaningful interest rate raises 2.5 years ago. They suggested I invest ~$10M in medium term bonds because there was 3% yield to be had and they didn't think interest rates would go up. I remember sitting in that conference room listening to them and thinking "are you fucking incompetent or insane" I invested in one fund with Colony Capital that was focused on real estate during the pandemic. It LOST money. One of the few funds to break the buck during the pandemic in real estate. And it wasn't focused on office real estate, so don't even say that. Private Wealth Manager's Ph.Ds will say "discounted cash flows" and "regression analysis" to make your head spin, and then jerk off in the dark with your money. E. The worst is Goldman Sachs though. I mean they are the fucking worst. Rather than invest in Elliott, they say "we have our own Elliott where we do the same thing but better". That may be true, but they'd say that no matter what you suggested. If @BillGates agreed to pay me a billion dollars tomorrow if I loaned him $1 today, Goldman would advise against it. Goldman would say "don't lend him the dollar - give it to us to invest instead" because then they'd earn fees on that dollar. A. If you're a PWM, tell me why I'm wrong. How are you different than other managers? Why are you better? B. Are you a client and have had a better experience with Private Wealth Managers than me? If so, please explain why? C. If you're thinking about using a PWM, I'd suggest just investing in the S&P500. What do you think?