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Here is the value of a financial advisor, though I agree that all fee based or all transactional doesn't make sense and you should look into flat fee or hourly, keep in mind that cost is only an issue if you are not getting any value.
As others eluded to, you have probably never had a financial advisor or at least, not a great one that takes the role of your own Personal Family Financial Advisor.
This quick image from Michael Kitces shows truly what we do. The clients that complain to me about cost are the ones that either were always the self doer type of investor and would rather research on their own and make their own mistakes (they try to even do their taxes to save $300-500 because they're too proud) or they simply don't want othe people telling me what to do and get fully immersed in their finances.
Best of luck and I hope you find what suits you.
Enthusiast
I am fee-based and hourly.
They’re advisors who may charge an annual flat fee that would cover planning, asset allocation, and so forth. I would inquire on flat fees vs. % of aum. I hear Ayco (subsidiary of Goldman) does this…
We can support the model you are discussing, but I’d like to learn more about your objectives. It seems like your interactions with advisors have been poor, and pretty light on the financial planning/tax planning side to not see the value. Do you mind private messaging me so we could talk further?
Sent!
If you ARE comfortable with what you are doing, what is the purpose of hiring one? Are you looking for guidance, or a sounding board? I don't think either is wrong, just depends on what you are looking to get out of it. Just look at your situation and be honest if you really "NEED" the product (i.e. financial advice) or not
Hourly is basically just the new commission model. IMO
Those professions deal hourly with corporations that have deeper pockets and more funding than retail clients. Sending a bill out for 10-60k to a retail client then collecting on it would be an absolute nightmare
Are you just looking for reassurance? You can also start with a small amount until you are comfortable and then maybe grow your money with them.
Some advisors charge for straight planning some do not - let them know what you are looking for. An advisor should be able to tell you things like - “how much money you will need saved by your target retirement date to be comfortable and what you might need annually.” They should also help you think about planning for old age such as the “what ifs” that can easily deplete savings down the road. Also - they can help you with will/estate planning and tax planning.
Finding someone you like and click with is the best advice I can give. Try to get a referral. Your first meeting is for you to interview them and there shouldn’t be a fee to just speak with someone. If you are HNW there are many ways for a financial advisor to help you.
Referrals were my first choice but I feel like many of my peers are in a much different place financially than we are. I then looked at some of my parents friends and tried to see who they were connected to on LinkedIn but I had minimal luck. Many advising firms I found were commission based which is not something I am interested in. I was hesitant to reach out to them individually partly due to shyness but also since I didn’t want to feel pressured to use whoever they referred me to. I also didn’t want to encourage follow up questions about our personal financial situation. I reached out to some family and asked for a referral with mixed luck. So I agree, referral would have been my first choice.
That’s a great graphic. I think part of me felt irresponsible for not having someone to sort of “audit” my independent management thus far. Both my wife and I are very disciplined in our savings so I don’t feel we need “encouragement” on that front and we also don’t need someone to explain to assumptions/risks that are inherent with all investments or level-set expectations. I’m not sure what “financial planning” covers but I’m assuming it helps to be well planned if you have sufficient savings/investments for things like retirement, kids college etc. I currently use some online calculators to verify we are good for retirement and aside from abnormally high savings rates, I don’t know what more we can do. Your comments make me feel better off now on our current approach. I think the average person (who could benefit from the encouragement etc) could probably find more value in regular meeting with a Financial Advisor than we would
I agree the advisor should be paid but I’d like to pay them for the time they spend and incite they bring, not for the number of dollars that get moved to a certain account. Managing $5 million in investments shouldn’t be 5x harder than managing $1 million. That’s why I’m interested in paying them per session or some other way that isn’t based on AUM
My practice has a flat-fee and/or percentage based pricing.
Additionally, the value of an advisor is based on concepts like their knowledge of tax strategies, account types you may not be aware of, and mitigating risk. The value of a good advisor is having a plan and constant conversation around the future impact of financial decisions before you make them.
Anyone can pick stocks. An advisor who focuses on investment management is not worth your time.
I have a specialization in millenial financial planning and there is a growing interest in philanthropy and disinheriting the IRS - tax strategies not immediately thought of, especially in younger years. Feel free to shoot me a message. Happy to answer questions.
Noooo! Hire one of us!!!!! Lol. Get together with a few advisers and speak with them to see who’s style and approach you feel comfortable with
If you want a good advisor, see if your social circle would recommend a good one to you. If not just get a robin hood account or equivalent and trade on your own
Thanks - the vast majority of our net worth is in low fee, well diversified index funds. Trading accounts with Etrade and Vanguard. 401k with Fidelity and ADP. We are all in on stocks and no bonds. We have a very high risk tolerance given our situation and ability to absorb a huge hit and wait out any market downturns. The higher long term expected returns outweigh the chance of near term bear markets in our opinion. Additionally both parents families are well off and able to “help” should any crazy situation ever arise (we aren’t banking on this, but knowing this is there allows us to be able to take on more risk and have higher expected returns - and they are happy to provide this comfort/ability to us).
I am a financial educator that can help. I teach middle-class families strategies on how to save, protect and grow their wealth tax-free. I also help the rich to become richer because I work with over 230 carriers to find the best products for their needs whether their budget is $100 or over $1 million. By the way I do this all for free so no charge to the client. I love what I do!
You don’t need an advisor and are doing just fine on your own.