How do you know if you have a good financial advisor?

[$ hoarder]

I feel like ours knows what he is talking about but can't get over how Suze Orman says a good advisor would not have time to come to your home. Also, we are paying 3.5 percent on just over 100k of investments...trad Iras, Roth iras. We started a brokerage acct a few months ago but he hasn't given us the check book to start using it yet. Why do you like your financial advisor?

[kv968]

I like my financial advisor just fine since that person is me

As far as YOUR advisor goes, I think you're paying too much and evidentally you aren't happy with the attention (or should I say lack thereof?) he is giving you. His being knowledgeable is great but if he's not helping you I'd start looking elsewhere.

[dczech09]

I think a good financial advisor makes money by any means. It does not matter if they are paid commissions, % of assets, or fees. While their are conflicts of interest no matter what, what truly matters is whether or not you feel that the price is worth the advisor.

So you are paying 3.5% on $100,000. That is $3,500 (for the year I assume). That is about $291.67 per month. With that said, I do think 3.5% is a little steep. I pay not even 1.0% per year on my assets, but that is because I manage them myself and just pay the mutual fund expenses.

So the question you gotta ask yourself is if that advisor is worth that cost. If you do not think so, then dump the advisor. If you think it is worth it, then stick with them. Since you are questioning whether or not this guy is worth the cost, perhaps that is a sign that you are not happy with the service versus the cost?

I am my own financial advisor. A lot of my friends come to me for advice too. I do not charge for my advice, but then again I am pursuing a totally different path of becoming a financial professional (mass comm).

And take what Suze Orman says with a grain of salt. She is not you or the advisor. She is an expert on her own opinion. And while many people value her opinion, ultimately your opinion should carry more value.

[disneysteve]

3.5% sounds rather high. From what I know, 1% of assets under management is a much more typical fee, though since you have a small portfolio, the rate might be higher because of that.

The question is what is this adviser doing for you that is worth what he is charging you?

[jpg7n16]

3.5% is definitely high - if it's an ongoing assets under management fee.

$3,500 one time for a comprehensive financial plan is reasonable.


I would also like to know what the 3.5% is getting you, if it's an ongoing fee. 1% is pretty much industry standard for AUM. 3.5% is a pretty large hurdle to overcome on investment returns. If that fee is just managing the account, you need to find another advisor who will work with your asset level for less.

[feh]

3.5% is astronomical. Time to look elsewhere.

[$ hoarder]

New question. Does it seem like most ppl who post here are their own advisors? I guess I like the idea of a professional managing my money by investing in the appropriate funds.

[disneysteve]

New question. Does it seem like most ppl who post here are their own advisors? I guess I like the idea of a professional managing my money by investing in the appropriate funds.

Yes, the vast majority of the regulars here are do-it-yourself types.

There isn't necessarily anything wrong with using a professional adviser. Just be sure that you understand what you are paying for and that you feel that the service provided is worth the cost. As we've said, 3.5% is a lot of money.