Is Your Adviser charging You A Fair Price?
 

Is your adviser charging you a fair price and providing the services you want and need?

In our case yes... because I DIY. IOW, we avoid the expenses.


I will spare you the details of our plan and approach. Except to say, it covers all the bases and is based on common methods employed in the industry.

The only things I seek professional help with is estate planning (we use an attorney).

Every once in a while some tax advice or service from a CPA.

What do you consider a fair price and what are your expectations?

The question has been proposed by the Intelligent Investor because most professional advisers simply apply computer models to make predictions and less than 27% apply human intelligence.

Also many annual fees are negotiable and investors are unaware of that fact.
Paying fees of 1.5 and above can be self defeating

You hint at one issue.

Define the service offering!

What exactly are the services that are being performed?

Price should be based upon services performed and size of your portfolio. After a fixed point in time its easy to compare against gains/losses with other indexes.

I pay .05% on my portfolio.

I made a sizable amount of money with this devisified portfolio, and it is managed, by my financial firm. This works for me, as I don't have to worry, because it is in good hands.

Getting good returns, with very little fee.

Yes, I pay myself $100k per year in lieu of giving it to someone who needs to make a tremendous amount of money to fund their personal lifestyle and feed their parent company for overhead costs.

I can buy alot of toys with that money, if I wanted to. :D

Do you actually avoid $100k in expenses each year?

Sure do.

WOW, Gustavo, you must have one hell of a portfolio if it would cost $100k for a CFP to manage it. Can't imagine someone with that amount of money not working with a professional.

By chance do you see dorsal fins circling you now?

;)

No one can look after my money better than me. I have no exotic strategies so I don't need a "real" professional. Most advisors used a canned strategy anyway.

OK - you missed my point. God speed.

I got it.


Some people have turned themselves into experts... combination of formal education, career experience, and self-education.


But, those people tend to be a relatively small segment of the population.

When discussing financial/risk planning and management, people are often not talking about the same things... often one is talking apples and the other is talking oranges.

Many many people read a few articles and dive in and wing it.

To some planning means... I bought low cost mutual funds and pretty much follow basic academic advice on allocation that is commonly available in print media.

Others it also means, tax planning, asset protection, etc. The dustier corners of the planning continuum.

My only intent for starting this thread was to say be aware of what you are paying for advise/service and if the fees you are paying are negotiable.

Investment is personal some will prefer their investment be actively managed, managed by themselves while others prefer Index funds.

Greed despite Hollywood depiction is not good for this industry. Many of investment adviser broker, etc has been sent to jail and it seems now-a-days that is becoming more common

Asset allocation, diversification , holding, fees and rebalancing are main stays here as are computer models for predictions.

You can bet that investment professionals are going to be the biggest winners, and the big boys at the top are getting the pick of the litter, something most of us will never realize. In Las Vegas the house always wins and I suspect the same principle applies in the investment business

This is an interesting article on the topic Financial Advisery services and a new/growing form of how to deliver the services.

I have been seeing more and more articles about Financial Advisery services over the internet.

Do you think some, or perhaps a lot, of the local "Face to Face" Financial Advisery services will end up being displaced by the eFinancial Advisery Services over the internet?

How Much Should You Pay a Financial Advisor?

There are more and more articles proposing exactly what the aforementioned article suggests as I explained in a previous post.

I spent my entire working life reminding myself that bankers are rich because they rent your money for one amount and earn substantially more then the interest they pay you. so I avoided borrowing except for my homes and paid them off quickly and just enough to utilize the mortgage deduction option.

What advisor? I've never had one and I have never been in a mutual fund of any kind. I only bought some treasury bonds once, many years ago, and I have never bought any foreign stocks. I've never been widely diversified as mutual funds are. So, I should be a big loser, right? Wrong!

When I got serious about investing, about 30 years ago, I picked individual stocks, mostly big cap stocks of well established companies. These were companies with a good track record. Did I make mistakes along the way? Sure, I made plenty but I learned from them. And now I couldn't be happier with the results.

I'm not saying it's for everyone but it can be done if you have the time, knowledge, interest, fortitude, patients etc..