Comments on: How Much Should Unbiased Financial Advice Cost? http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html like a friend telling you about money ... Wed, 23 May 2012 19:06:27 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: TFB http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-7669 TFB Sun, 08 Jan 2012 01:22:47 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-7669 @White Coat Investor - It's been two years since I first wrote this but I'm still puzzled. If you are saying there is an over-supply of advisors, you'd think it would drive down prices. I think it has more to do with lack of demand. There isn't a roomful of people wanting to pay for advice. If I open a shop offering $50 per half-hour consultation, I would still have few takers. @White Coat Investor – It’s been two years since I first wrote this but I’m still puzzled. If you are saying there is an over-supply of advisors, you’d think it would drive down prices. I think it has more to do with lack of demand. There isn’t a roomful of people wanting to pay for advice. If I open a shop offering $50 per half-hour consultation, I would still have few takers.

]]> By: White Coat Investor http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-7665 White Coat Investor Sat, 07 Jan 2012 08:36:11 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-7665 I've blogged before about how there are too many financial advisers. I envision a day when there are 1/20th of the financial advisers there are today and doctors, lawyers, and every day joes are lined up in their waiting room waiting for their 20 minutes. Because there are too many, no one can make a living at it at a fair price. If you had a whole waiting room of folks lined up at $75 every 30 minutes, you could easily make a good living giving unbiased advice. The overhead is nearly zilch. But no advisors have enough clients. The reason is because the clients can't tell the good advisors from the bad ones. So the good ones aren't busy enough without resorting to 1% AUM fees with $250K minimums. They might only meet with 2 or 3 clients ALL DAY. And that's probably a good day. And while those with a $250K portfolio probably still need advice, the ones who really need it are those with a $5K portfolio. The first $100K is the hardest, right? I’ve blogged before about how there are too many financial advisers. I envision a day when there are 1/20th of the financial advisers there are today and doctors, lawyers, and every day joes are lined up in their waiting room waiting for their 20 minutes. Because there are too many, no one can make a living at it at a fair price. If you had a whole waiting room of folks lined up at $75 every 30 minutes, you could easily make a good living giving unbiased advice. The overhead is nearly zilch. But no advisors have enough clients. The reason is because the clients can’t tell the good advisors from the bad ones. So the good ones aren’t busy enough without resorting to 1% AUM fees with $250K minimums. They might only meet with 2 or 3 clients ALL DAY. And that’s probably a good day. And while those with a $250K portfolio probably still need advice, the ones who really need it are those with a $5K portfolio. The first $100K is the hardest, right?

]]> By: Steve Stanganelli, CFP(R) Professional http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-6594 Steve Stanganelli, CFP(R) Professional Sun, 01 May 2011 13:06:56 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-6594 FYI -Sorry for the typos in the last post. Finger error caused by distraction of 19-month old running around. FYI -Sorry for the typos in the last post. Finger error caused by distraction of 19-month old running around.

]]> By: Steve Stanganelli, CFP(R) Professional http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-6593 Steve Stanganelli, CFP(R) Professional Sun, 01 May 2011 13:02:38 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-6593 To the folks who want to do this as a side job: Your comment that your state doesn't require licensing is WRONG. Every state requires those who offer individualized financial advice to be registered with either the SEC or the state. This is addressed in the Investment Advisor Act of 1940. There are lots of folks offering to paint my house or prepare taxes. The cheapest ones are those who are not licensed, have no E&O insurance costs, have no special training, are not members of a professional organization and don't have the tools available. Please,everyone, let's get real about DIY. There is always a cheaper way of doing things like doing it yourself. But have enough set aside to pay to have it fixed. To paraphrase the credit card commercial: Price of avoiding a mistake - Priceless. $25.hour??? Are you kidding? My plumber charges way more than that. And I'm a much a specialist in my area as he is in his. Try a flat fee advisor program: Pay a retainer regardless of the value of assets and get a package of planning services. That's one way I handle it with folks. One example: I had a client that took my advice and know is saving $10,000 in the upcoming year on his son's college tuition. That's way above what he paid for my advice - and years of training. To the folks who want to do this as a side job: Your comment that your state doesn’t require licensing is WRONG. Every state requires those who offer individualized financial advice to be registered with either the SEC or the state. This is addressed in the Investment Advisor Act of 1940.

There are lots of folks offering to paint my house or prepare taxes. The cheapest ones are those who are not licensed, have no E&O insurance costs, have no special training, are not members of a professional organization and don’t have the tools available.

Please,everyone, let’s get real about DIY. There is always a cheaper way of doing things like doing it yourself. But have enough set aside to pay to have it fixed. To paraphrase the credit card commercial: Price of avoiding a mistake – Priceless.

$25.hour??? Are you kidding? My plumber charges way more than that. And I’m a much a specialist in my area as he is in his.

Try a flat fee advisor program: Pay a retainer regardless of the value of assets and get a package of planning services. That’s one way I handle it with folks.

One example: I had a client that took my advice and know is saving $10,000 in the upcoming year on his son’s college tuition. That’s way above what he paid for my advice – and years of training.

]]> By: TFB http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-6128 TFB Tue, 01 Mar 2011 01:16:57 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-6128 @paul - They are supposed to be. "The Vanguard Financial Plan is provided by Vanguard Advisers, Inc., a registered investment advisor." All RIAs are supposed to be a fiduciary. @paul – They are supposed to be. “The Vanguard Financial Plan is provided by Vanguard Advisers, Inc., a registered investment advisor.” All RIAs are supposed to be a fiduciary.

]]> By: paul http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-6126 paul Tue, 01 Mar 2011 00:13:30 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-6126 I especially liked the $250 vanguard fee that encompasses vanguard and non -vanguard funds. My only concern is if vanguard will be truly objective and exercise a fiduciary responsibilty to me. I especially liked the $250 vanguard fee that encompasses vanguard and non -vanguard funds. My only concern is if vanguard will be truly objective and exercise a fiduciary responsibilty to me.

]]> By: David http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-6084 David Sat, 26 Feb 2011 18:29:46 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-6084 I find that many experts in other fields charge something like $70 to $100 per hour for their services. This includes plumbers, electricians, music teachers, etx. Many lawyers are in this range, as well, though many charge more. Doctors much more, unfortunately. To me, spending this kind of money for financial advice would be sensible and affordable. If you expect a $1,000/year fee, then that would imply the advisor spending 10-15 hours SPECIFICALLY ON ME. General research, keeping up with trends, etc., doesn't count. That`s overhead that is covered by the hourly fee. Frankly, I doubt very much that, with the electronic tools available, very many financial advisors put this much effort into individual clients. That's why I don't use one. I find that many experts in other fields charge something like $70 to $100 per hour for their services. This includes plumbers, electricians, music teachers, etx. Many lawyers are in this range, as well, though many charge more. Doctors much more, unfortunately.

To me, spending this kind of money for financial advice would be sensible and affordable. If you expect a $1,000/year fee, then that would imply the advisor spending 10-15 hours SPECIFICALLY ON ME. General research, keeping up with trends, etc., doesn’t count. That`s overhead that is covered by the hourly fee.

Frankly, I doubt very much that, with the electronic tools available, very many financial advisors put this much effort into individual clients. That’s why I don’t use one.

]]> By: TFB http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-5980 TFB Sat, 19 Feb 2011 18:20:42 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-5980 @Ann - The best deal in financial advice comes from Vanguard. When you are investing $500,000 or more, they will give you a financial plan for FREE, plus you get to ask for advice from a CFP at any time. The free service is more than good enough for most people. See https://personal.vanguard.com/us/whatweoffer/advice/certifiedfinancialplanner?Link=facet or call 800-933-1970. I don't work for them. @Ann – The best deal in financial advice comes from Vanguard. When you are investing $500,000 or more, they will give you a financial plan for FREE, plus you get to ask for advice from a CFP at any time. The free service is more than good enough for most people. See

https://personal.vanguard.com/us/whatweoffer/advice/certifiedfinancialplanner?Link=facet

or call 800-933-1970. I don’t work for them.

]]> By: Ann Dwork http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-5976 Ann Dwork Sat, 19 Feb 2011 14:10:45 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-5976 My Mom recently died and there will be an inheritance. I feel I need some advice on how to handle it but have had miserable experiences with financial advisors in the past, all banks. I have never used a private advisor. I talked with a CFP who was recommended by a friend. He has a 200/ hr fee but wants to manage the $ for a 1% yrly fee plus a $1000.00 set up fee. This includes qrtrly reviews and any other advice etc I may need. The prtfolio would be invested through Carles Schwab, where I already have an acct. At 1% yr he would make 10,000-15,000 / yr. I was thinking of putting a small part of the $ with him and see how he does but the set up fee gave me cold feet. He has met several times with me for free and I liked him but still am worried my based on past experience. How much should I pay for an advisor or should I just take my moms advice, stay with Charles Schwab and do it myself ? My Mom recently died and there will be an inheritance. I feel I need some advice on how to handle it but have had miserable experiences with financial advisors in the past, all banks. I have never used a private advisor. I talked with a CFP who was recommended by a friend. He has a 200/ hr fee but wants to manage the $ for a 1% yrly fee plus a $1000.00 set up fee. This includes qrtrly reviews and any other advice etc I may need. The prtfolio would be invested through Carles Schwab, where I already have an acct. At 1% yr he would make 10,000-15,000 / yr. I was thinking of putting a small part of the $ with him and see how he does but the set up fee gave me cold feet. He has met several times with me for free and I liked him but still am worried my based on past experience. How much should I pay for an advisor or should I just take my moms advice, stay with Charles Schwab and do it myself ?

]]> By: Aaron http://thefinancebuff.com/how-much-should-unbiased-financial-advice-cost.html#comment-5443 Aaron Mon, 27 Dec 2010 00:23:27 +0000 http://thefinancebuff.com/2009/10/how-much-should-unbiased-financial-advice-cost.html#comment-5443 I did back-office work for a few years after getting my series 65. Because I didn't affiliate with an RIA during those years, it lapsed. I could get it again pretty easily, but so much of my work revolves around insurance instead of investments. I did back-office work for a few years after getting my series 65. Because I didn’t affiliate with an RIA during those years, it lapsed. I could get it again pretty easily, but so much of my work revolves around insurance instead of investments.

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