Fee-only financial advisors

[Sallyr70]

I have a free phone consultation with a local advisor next week. Her rate is $300/hour after that. On the website, it says a typical financial plan would cost $3000-$6000. I'm not interested in spending anywhere near that. My own program is pretty basic, so I just want to provide all my numbers and have her analyze and tell me if I need to shift anything around. I feel it should only take an hour or two, and maybe do a check in every year or two. Anyone else do something similar? What was the cost and was it worthwhile?


Sally

[Jluke]

so I just want to provide all my numbers and have her analyze and tell me if I need to shift anything around. I feel it should only take an hour or two, and maybe do a check in every year or two. Anyone else do something similar? What was the cost and was it worthwhile?

she will want to shift your money around - into her own pocket.

now, if this person is fee only and doesn't charge 1% for Assets Under Management (AUM), then it might be worth it.

keep your guard up.

[Sallyr70]

Correction: it's not fee based.I checked the website again and she doesn't sell any products.

[disneysteve]

Correction: it's not fee based.I checked the website again and she doesn't sell any products.

That means it is fee-based. The alternative is commission-based. If she doesn't sell any products, she is either charging based on her time (an hourly fee) or based on a percentage of assets under management. If you were going to use an adviser, that's the kind you want.

The question is why do you feel you need to pay an adviser? What is she going to do for you that you can't do on your own for free?

[phantom]

That means it is fee-based. The alternative is commission-based. If she doesn't sell any products, she is either charging based on her time (an hourly fee) or based on a percentage of assets under management. If you were going to use an adviser, that's the kind you want.

I think there are actually 3 types of advisors: fee-only who charge fees and do not get commissions, fee-based who charge a fee but may still get a commission, and commission who only make money on commissions. If this advisor is not fee-based and does not sell any products, it is likely that they are fee-only.

[disneysteve]

I think there are actually 3 types of advisors: fee-only who charge fees and do not get commissions, fee-based who charge a fee but may still get a commission, and commission who only make money on commissions. If this advisor is not fee-based and does not sell any products, it is likely that they are fee-only.

Thank you for clarifying that.

[Sallyr70]

That means it is fee-based. The alternative is commission-based. If she doesn't sell any products, she is either charging based on her time (an hourly fee) or based on a percentage of assets under management. If you were going to use an adviser, that's the kind you want.

The question is why do you feel you need to pay an adviser? What is she going to do for you that you can't do on your own for free?

I'm hoping to get some information from her during the phone consultation. Just wondering if my investments are diversified well for someone my age who wants to retire in less than 15 years. Mostly, just some validation that I'm on the right track. It will depend on how much work she thinks she would need to do to analyze my investments. I only have a Roth and a 401k so if she tells me it will take more than a 2-3 hours I won't move forward.

[Sallyr70]

she will want to shift your money around - into her own pocket.

now, if this person is fee only and doesn't charge 1% for Assets Under Management (AUM), then it might be worth it.

keep your guard up.

I don't need anyone to manage my portfolio. only interested in the hourly advice.

[GrimJack]

Demand a 'best interest of client' fiduciary contract (if this is even possible). If anyone who wants to help you with your finances will not work in your best interest (legally enforceable), then stay away. This is the rule that the Obama administration tried to implement and the Trump admin. repealed.

It seems it would cause financial hardship for financial advisers to work in their client's best interest.

[Nutria]

I'm hoping to get some information from her during the phone consultation. Just wondering if my investments are diversified well for someone my age who wants to retire in less than 15 years. Mostly, just some validation that I'm on the right track. It will depend on how much work she thinks she would need to do to analyze my investments. I only have a Roth and a 401k so if she tells me it will take more than a 2-3 hours I won't move forward.

I'm staring down retirement in that same time frame, and Fidelity, Vanguard and ABA are happy with my 70% S&P500 and 30% high-yield bonds split.

[Jluke]

I'm hoping to get some information from her during the phone consultation. Just wondering if my investments are diversified well for someone my age who wants to retire in less than 15 years. Mostly, just some validation that I'm on the right track. It will depend on how much work she thinks she would need to do to analyze my investments. I only have a Roth and a 401k so if she tells me it will take more than a 2-3 hours I won't move forward.

You seem to be missing the point of this forum (and others). You could get free advice from experienced individuals about your portfolio.

For instance, if you held a US Total Stock Index Fund (ITOT, VTI, or other ETF/mutual fund version of your choice) you can't get any more diversified with holding US equities.

If you pay someone for their service, of course they are going to want to make changes for you. I would be surprised if the advisor reviewed it and said no changes necessary, see you in 10 years. it'll be more like, let me schedule another appointment with you and we'll go over my changes; then we'll follow up every 6 months or so.

[Captain Save]

That means it is fee-based. The alternative is commission-based. If she doesn't sell any products, she is either charging based on her time (an hourly fee) or based on a percentage of assets under management. If you were going to use an adviser, that's the kind you want.

The question is why do you feel you need to pay an adviser? What is she going to do for you that you can't do on your own for free?

There is a difference between fee only and fee based...

Fee only means the FA is not allowed to have any association with any business that earns commissions... they bill you an AUM "fee" , hourly, or a flat fee..

Fee based typically starts with a Fee.. like a planning fee or an AUM "fee" .. but they can sell commissioned products.. like P&C and Life insurance products ... they can also be affiliated with a business that earns commissions like Real Estate for example.

I might be wrong on some of this but I'm pretty sure that's how it works.

[prosper]

Does anybody in this forum use a financial adviser?
I have personally never used one but would be interested in other opinions. I know two guys that are in this field and show great integrity and character. I find hard to imagine these two guys being blood sucking vampires as described in most "financial adviser" post. In addition, in our free market economy, wouldn't bad service eventually cause financial advisers to become extinct like the VHS tape. Just curious. I have never heard anything positive.

On a side note, I'm self-employed and normally do EVERYTHING myself. This year I decided to contract a few jobs out; including my taxes. I have been very satisfied with the time saved as well as the return on my investment. Makes me wonder what other benefits I am missing out on.

[Nutria]

Does anybody in this forum use a financial adviser?

I doubt if any of the regulars do.

I have personally never used one but would be interested in other opinions.

It's too easy to create an account at Vanguard, Fidelity, etc, tell the computer your age, risk tolerance, goals, current investment assets, etc and their systems will give you recommendations just as good.

If you have a 401(k) then the site you log in to watch it grow should have an advisory feature.

I know two guys that are in this field and show great integrity and character. I find hard to imagine these two guys being blood sucking vampires as described in most "financial adviser" post.

Unless they're fee only, then they're salesmen who's companies have taught them all the tricks and techniques of sales, and who's bosses expect results.

In addition, in our free market economy, wouldn't bad service eventually cause financial advisers to become extinct like the VHS tape. Just curious. I have never heard anything positive.

Financial advising will never go extinct, but it's shifting away from individuals working (explicitly or as proxies) for full-service, high expense brokerages like Edward Jones.

[disneysteve]

Does anybody in this forum use a financial adviser?
I have personally never used one but would be interested in other opinions. I know two guys that are in this field and show great integrity and character. I find hard to imagine these two guys being blood sucking vampires as described in most "financial adviser" post.

The biggest question you need to ask yourself is what I said earlier: What can they do for you that you can't do just as easily (and for free) on your own?

A common payment system is 1% of assets under management. I have a $900,000 portfolio. That means an adviser would charge me $9,000/year to oversee my portfolio. That's a huge amount of money to give away without getting something pretty significant in return. I have yet to see anyone who can provide service worth that kind of money.