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That’s too much. My rate is .25%. The other big firms I interviewed 5 years ago were .5%. I’m sure they must be less now.
So, long answer but your question warrants a thoughtful response…
On $6M our fee would be 0.65%… I don’t discount, but some will… whether it’s worth it or not depends if your really willing to trust the advisor to guide you, or if you think you can do it yourself… if you think you can do it yourself, great, enjoy, no harm no foul…
An advisor’s job is not to outperform the market, it’s to provide you with a fair, balanced and unbiased opinion… historically advisors deliver alpha in various ways… one way is to keep you invested, and not emotional… another is to offer dynamic strategies that can affect the long term viability of your plan… keep you goal oriented and progressing towards those goals… assist with tax efficient distributions… Medicare, social security planning… protection aspects… trust, estate and philanthropy management…
An example of something that an advisor can bring that most people probably didn’t think about… in April, when the world was going to end because of Trumps initial tariff announcement,.. I called every client that had an IRA with me and said it’s a great time to do some Roth conversions… we have an opportunity to take a 10% haircut and rebuy the same securities, capture the upside in a tax free account…
Some of them, we already were doing Roth conversions, others it was the first time… but I advised to convert the maximum possible while keeping them either in the same tax bracket for the year or capping up to the next bracket, whatever they were most comfortable with, and had liquidity to pay the taxes… since then, the S&P has returned ~30%… that was a move that provided some alpha… while others were reorienting their portfolios to bonds or cash… we made smart money moves, and stayed in the game, and in some cases, took on more risk with cash…
So the overarching point, is that an advisor’s worth is more than gains/losses on an account statement, and comparing their performance to an index fund is the wrong approach… it’s about all the things I mentioned earlier that when combined that can be worth the fee… but if you hire an advisor that doesn’t do any of what I mentioned… then they deserve for you to pull your money and move on…
Subject Expert
There's almost nothing they could be doing that would be worth that much, unless it was preventing you from disastrous behavioral mistakes like market timing, performance chasing, large scale stock picking, completely inappropriate asset allocations like leverage or all cash, high turnover, not Roth converting at all if you should be, and so on. If you aren't doing that kind of thing the main job of an advisor is already done.
And even if you did need an advisor, high pressure sales firms that do risky, typically underperforming active management, like Fisher and similar, are not likely to be the best bet. You can get better advice for less money by using either a fee only, advice only, hourly or flat rate fiduciary financial planner, or Vanguard Personal Advisory Services. Vanguard charges 30 basis points, not 85 or 100 or 150, and their advice is sober and informed. At your portfolio size, paying a fiduciary independent planner by the hour would likely be even cheaper than that.
I would resist this sales pitch. Stay calm. Think carefully about whether you really need an advisor, and if so, get a good one at reasonable cost, not the one who came along with a loud sales pitch.
I’ve never met an advisor that works by the hour… true advisors are continuously managing your portfolio and checking in on you… so you would have to have a blind trust, similar to a lawyer, that your being billed appropriately…
But Vanguard published a paper that summarized that an advisor can add up to 3% alpha… Morningstar determined that portfolio efficiency alone can deliver gamma of 1.59%… Envestnet found that an advisor can add up to 3% alpha as well… while it’s not guaranteed and situational based on the services offered and market conditions…
So is a 35bp-100bp fee worth it? It seems like it… as long as you’re actually receiving the services that the advisor promised, and they deliver…
Coach
85 bps is pretty standard for what you are describing. You need to decide if it is worth it to you. Not an outrageous cost.
Coach
This is 0.85-1.0% on the full $6m?
I'm nowhere near your situation but I can't imagine a world where that fee is worth it. There is probably some complexity in figuring out your withdrawal structure but after that I'd expect the situation to stay pretty static, right?
Again, I could be very wrong. But my gut check is that this sounds very expensive.
I’ve seen most forums urging people to steer clear of Fisher. Your statement about their high pressure sales tactics reaffirms what I’ve seen elsewhere.
If you are up to $6M honestly you probably have more financial knowledge than the junior advisor or “robo advisor” you are going to get passed over to once you sign up.
And the shortfall with financial advisors is they aren’t qualified to really help you with tax advice, like maximizing rental assets or other things that make up your net worth.
Nah, just get one-time advice and see if you can get it for free through your brokerage or talk to an accountant about withdrawal strategy. My brokerage recently offered to advise me at no charge. Also curious what your goal is since you’re doing just fine already.
Thank you for your perspective. Good advice.
Thank you so much. This is helpful.
Good question. With $6M saved, paying 1% a year is a big chunk it better come with more than just basic portfolio stuff.
If the advisor helps with taxes, estate planning, and keeps you calm during market swings, maybe it’s worth it.
But if all they do is rebalance funds, you might be better off with a simpler, cheaper setup.
With $6M saved, why do you need to beat the market?