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Thoughts on LAUR ahead of earnings tomorrow?
Is anyone an AIF? Is it a pain? Is it worth it?
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Additional Posts in Financial Advisors
Wtf happened to the market today?
Thoughts on LAUR ahead of earnings tomorrow?
Is anyone an AIF? Is it a pain? Is it worth it?
What do financial advisors actually do?
Wtf happened to the market today?
Depends. But if they are charging hourly, it's unlikely they are managing the money. They are just meeting and providing a written plan and recommendations. It would be up to the client to implement it on their own on eTrade, etc. If the fee-only guy IS charging an AUM %, then he isn't doing anything differently than you. If it's hourly only, you may want to point out all the work the client will have to do on his own to IMPLEMENT the plan. Also, will the client be comfortable making a call to the fee only guy, knowing he's "on the clock" at $200 an hour? Not to mention, after he pays $200 an hour, he still has to do the implementation on his own, PAY eTrade for brokerage costs, and for things like insurance, he is going to PAY the fee only guy to recommend what insurance to buy, and then he's going to PAY an insurance agent to buy a commission based policy. And in the end, you want to point out the most important thing is how much the client keeps, not what he pays. He pays your advisory fee only for as long as he USES your advice. And if your advice causes him to underperform, YOU make less money. The hourly guy has no such connection. It's $200 an hour, win-lose-draw.
Depends, there are fee only planners who will charge $10k for the planning, and give recommendations, and tell someone where to implement.Others will charge an AUM fee to manage it.I would do this... if he is worried about the fee, run a hypo, of a typical no load portfolio, and one with yours, including the fee.the fee covers the quarterly rebalancing, the meeting reviews, etc. Focus on what he is getting. Then bring it in a different way...do you go to the lawyer and pay him the fee to tell you what to do, then go out yourself and draft up the documents?
If you are using individual stocks/bonds maksim has a great idea there. Talk to him about total cost/expense Show him the expenses he isn't seeing with the funds and the imbedded cap gains/trading costs and you could show him he would save significant $$ with you at 90bps.
Cost of the unknown...ask him this scenario; what if he makes a mistake? how much could he potentially lose if he misunderstands a price point or something? has a miscalculation, an error, misunderstands the fine print that isn't caught for a couple months, until he goes back to his fee only guy, only to find out now his taxes are going to be jerked with. then what?