Last week reader Bill showed us how a typical fee-only financial advisor firm works (see AUM Fees and Financial Planning: The Odd Couple). The assets under management fees cover financial planning for a couple of years, and then you keep paying more when they work less. This week we have a well known financial advisor tell us how he serves clients under an hourly Advice-Only model.
Allan Roth nailed it. Such a huge contrast makes it super clear which way is the right way to go. If you know someone who’s paying asset under management fees, please do them a huge favor and tell them how to save 80-90% on advisor fees.
Say No To Management Fees
If you are paying an advisor a percentage of your assets, you are paying 5-10x too much. Learn how to find an independent advisor, pay for advice, and only the advice.
Based on Allan Roth interview above we initiated contact with his company to seek advice on tax efficiency of our portfolio. We contacted him based on 1) Boglehead philosophy, and 2) fee structure, and 3) his (apparent) overall attitude.
He is absolutely as advertised–to the point of him working himself out of a job when he suggested we were already in a good situation and he probably could not add much value.
He did, however, provide a fresh perspective (for us) on paying down our rental property mortgage and even asked us questions about our particular situation!
Although we did not use his services I can not speak highly enough about Mr Roth, his character, or his business philosophy.