Wealthy Household Financial Planning Guide

An honest framework for the decisions at hand. Not tax or investment advice — your specifics matter.

What 'wealthy' actually requires

• $2-10M investable is the zone where coordinated planning creates meaningful value — enough complexity that optimization matters, not enough that a full family office is justified.
• The question isn't 'can I afford an advisor' — it's 'which advisor produces value net of fees.'
• A 1% wirehouse advisor buying mutual funds is extractive. A 0.6% fee-only advisor doing direct indexing + asset location + coordinated tax planning is additive.

Asset-location is table stakes

• Across taxable, traditional IRA, Roth, and HSA, the same portfolio held in different "locations" produces materially different after-tax results.¹
• Bonds → tax-deferred (ordinary income treatment is punitive in taxable brokerage).
• US stock index → taxable (qualified dividends taxed at LTCG rates per IRC § 1(h)(11), step-up at death under § 1014).
• High-growth / international / alternatives → Roth (tax-free compounding; no RMDs on Roth IRA).
• Worth 0.3-0.6%/year — $6-30K annually on a $2-5M portfolio, depending on tax bracket.

Direct indexing at scale

• Hold 200-400 individual stocks replicating an index, in taxable. When specific stocks drop, harvest the loss; hold the gainers.
• Tax-loss harvesting at the single-stock level, not just the index level.
• Expected tax alpha: 0.5-1.5%/year, front-loaded in years 1-3.
• Requires $250K+ to be viable without slippage. Platforms: Parametric, Aperio (now BlackRock), Wealthfront, Schwab Personalized Indexing.

Coordination with outside specialists

• A good fee-only wealth advisor coordinates: CPA (tax strategy), estate attorney (trust + gift planning), insurance broker (umbrella liability, disability, life), mortgage broker for jumbos.
• The coordination is often more valuable than any single recommendation. A disconnected team leaves money on the table.

When to consider a multi-family office

• Above $25-50M, a full multi-family office (Ballentine Partners, Silvercrest, similar) is worth the fee (typically 0.4-0.8% or flat).
• You get investment committee, estate planning, philanthropic planning, bookkeeping, bill-pay, family governance in one shop.
• Below $25M, a coordinated set of specialists is more efficient.

Sources

1. Kitces — Asset Location Research. Empirical 0.3-0.6%/yr benefit across typical portfolios.
2. IRC § 1(h)(11) — Qualified Dividend LTCG Treatment; § 1014 — Step-Up in Basis at Death.
3. Kitces — Direct Indexing Tax Alpha.
4. NAPFA — Fee-Only Advisor Directory.
5. Family Office Exchange (FOX) — Multi-family office industry benchmarks (0.4-0.8% or flat-fee).

Coordinated-planning benefits verified against Kitces research and industry benchmarks. "Value" is net of fees and after-tax.