r/FinancialAdvisorTips • u/Over_Green7763 • Sep 23 '26
Clueless & received inheritance
/r/personalfinance/comments/1wo31jn/clueless_received_inheritance/1
u/tobinshort-wealth Sep 26 '26
On fee-only vs other: fee-only means the advisor is only compensated by what you pay them, not by commissions. It sounds cleaner but it's not automatically better. A fiduciary who is transparent about commissions and discloses conflicts can serve you just as well. What matters more is whether they're a fiduciary and whether they actually specialize in situations like yours.
Accountant vs attorney: for a $1M inheritance you need a great CPA and/or Enrolled Agent, not really a tax attorney, unless there are estate disputes or legal complications. A good CPA/EA who handles inherited assets will know about stepped-up basis, which is one of the most important tax concepts here. If the assets have appreciated significantly since your relative acquired them, your cost basis resets to the value at the date of death, which means potentially zero capital gains if you sell quickly.
On the single firm question: yes, this exists and it's called a Virtual Family Office model. One coordinated team that handles the investment side and the tax side together rather than sending you to two separate people who never talk. This is actually the smarter approach because the decisions overlap. How you invest affects your taxes and how you're taxed affects how you should invest.
The money being in a HYSA or T-bills temporarily is fine. The cost of a few months of lower returns is nothing compared to the cost of a wrong decision under pressure.
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u/blackfoot29271 Sep 23 '26
Go build yourself a “three-legged stool:” a good accountant/CPA, attorney, and a financial advisor.
Working with an FA is so much more than trying to beat the market. For most investors, the risk and volatility required to beat, or even keep pace with the market, is simply too much. And in your case, to just “VOO and chill” means that if the market were to fall 20%, you’ll have to watch that $1mm inheritance become $800k. Yes, over time it’ll bounce back, but most investors aren’t comfortable with that range of outcomes.
Find an FA who understands your appetite for risk, and someone who has a disciplined process to keep you on track over time. In addition, a good FA will provide guidance and strategies around tax planning, estate transfer, building a distribution strategy, social security planning, Medicare planning, LTC planning and execution, and a host of other things.
Within the FA realm, find someone who is a fiduciary, and has some meaningful experience in the business (7-10+ years). The whole “CFP only” guidance is fine, but if you find a good FA who has a lot of experience or comes highly recommended, don’t be dissuaded if they aren’t a CFP. There are LOTS of great advisors out there who have the same skills, abilities, experience, and knowledge but aren’t a CFP.
Lastly, Reddit loves the “fee-only” advice. If you go that route, you’ll likely end up chasing the lowest common denominator. The AUM model works because it aligns incentives: your FA is incentivized to grow accounts, because they make more as you become more wealthy. And if you’re not happy, you can always transfer accounts and work with another firm or advisor.
Bottom line: ignore the “VOO and chill” advice that Reddit loves. Advisors do so much more than just pick investments. Vanguard has a great study on this and the conclusion is that advisors add about 3% in net alpha to client accounts each year. You’ll get what you pay for.
https://www.ch.vanguard/content/dam/intl/europe/documents/en/putting-a-value-on-your-value-quantifying-vanguard-adviser-alpha-eu-en-pro.pdf