My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
Private banking and wealth management services destroy rather than create value for most high-net-worth individuals
The Reasoning
High fees (0.5-1.2% annually) compound over decades while adding minimal alpha over simple indexing. Behavioral psychology of percentage-based fees masks the true cost impact.
What Needs to Be True
- Index funds continue delivering market returns
- Wealth managers cannot consistently generate alpha above fees
- Clients remain unaware of true fee impact over time
- Status and convenience benefits don't justify costs
Counterargument
Wealth managers provide valuable behavioral coaching, tax planning, estate planning, and prevent costly emotional investment mistakes
What Would Change This View
Consistent evidence of alpha generation above fees, or demonstration of behavioral value exceeding fee drag
Implications for Builders
Build fee-transparent wealth management tools
Focus on flat-fee rather than AUM-based models
Create automated tax optimization services
Target education around fee impact awareness
Example Application
“Goldman Sachs charged 1%+ fees and delivered 6% returns vs 13% from simple S&P indexing, resulting in millions less wealth over time.”