Who uses a financial advisor?

[trophy8]

A friend is trying to convince me to use a guy he has been using for a few years. I'm skeptical. I do ok on my own but always looking to improve. I'm 27 and keep at least 5 figures in savings and put into my 401k a fair bit (75k in the last 4 years). Is a FA worth it? I need to talk to him but my buddy said he charges 1%. What's the going rate, what do I look for etc. And if I recall, there's a few members here who do that line of work.
Thanks in advance.

[TxAg]

1% is too high

[Aggie PhD]

I use one. Primarily because we have to use one for our retirement accounts through the university. I set up the 529 and moved my Roth to him as well. I still keep a pretty good eye on things and maintain diversification.

Prior to working here, I managed all of my own stuff

[gingib]

1% seems too high.....**** you bank lol

[44mAG]

I'm in the same process right now of talking to some. Try and find someone who charges hourly instead of basing it off of how much money you have. My deal is that I want to find ways to invest money to be able to use before I turn 60 (30 years from now). I still know planning for retirement is important, but I don't want to go through life counting pennies waiting on my 60th birthday, just to die of a heart attack at 59!


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[trophy8]

So If 1% is too high, then what's the going rate?

[TxAg]

Vanguard charges 0.3%

They are probably the lowest.

If you need someone to walk/talk you through every little thing it will be higher.

[trophy8]

Vanguard charges 0.3%

They ate probably the lowest.

That's who my first 401k is with. Still is but I planned on moving it since I left my last employer last year. I have an Edward Jones contact as well at home. Need to follow up on that

[JeffJ]

1% is too high

Could be, or it could be a great deal. Devil is in the details.

[35remington]

Comparing a FA to Vanguard is apples and oranges. Your financial advisor has a fiduciary duty to find what is best for you. Vanguard is just charging you a transaction fee; you do all the work.

I pay my guy a 1.6% ongoing annual maintenance fee and it's worth it. He has a 5-person investment committee that meets every week to discuss best-in-class funds and strategies. His management has far outpaced the ROI I was getting on my own. The 1.6% per year goes down as assets increase past $200K. There are no transaction costs.

[TxAg]

Vanguard has advisors for 0.3%, not transaction fees

[trophy8]

Could be, or it could be a great deal. Devil is in the details.

My thoughts. I set up a meeting to discuss it. Surely can't hurt.

[TxAg]

Comparing a FA to Vanguard is apples and oranges. Your financial advisor has a fiduciary duty to find what is best for you. Vanguard is just charging you a transaction fee; you do all the work.

I pay my guy a 1.6% ongoing annual maintenance fee and it's worth it. He has a 5-person investment committee that meets every week to discuss best-in-class funds and strategies. His management has far outpaced the ROI I was getting on my own. The 1.6% per year goes down as assets increase past $200K. There are no transaction costs.

That's the highest I've seen. I suppose he guarantees you 15% returns every year, huh?

[Throwin Darts]

At my former employer we charged 1% of assets. We had a model that could be run that would show the point in time that the advisor would have made more than the client based on various scenarios.

[shollandatx]

I'm in the business - yes it's worth it if you hire the right guy/gal.

Sounds like everyone is simply pointing to management fees, however we have the ability to get paid about 4 different ways. If I only had a dollar for every time I've heard "Well they're charging me .3% or .5%. Truth be told, 99% of the time I analyze a statement, they are incorrect.