How much do financial advisors cost?
Fee-only fiduciaries typically charge in one of three ways: 1) A percentage of assets under management (AUM), usually 0.5% to 1.0% annually. 2) A flat annual retainer ranging from $3,000 to $15,000+ depending on complexity. 3) An hourly rate of $250 to $400 for specific project work.
What is a fiduciary?
A fiduciary is a professional legally obligated to act in your best interest at all times, placing your interests ahead of their own. Brokers often operate under a lower 'suitability' standard, meaning they can sell you a product that pays them a higher commission even if a cheaper option exists.
Do I have enough money to need an advisor?
This depends on complexity, not just net worth. You need an advisor if: 1) You are within 5-10 years of retirement. 2) You are a business owner or have equity compensation. 3) You've experienced sudden wealth. If you have simple W-2 income and under $250k, a low-cost robo-advisor is usually sufficient.
How do I evaluate my current advisor?
Ask for two things: 1) A clear, dollar-amount breakdown of every fee you paid last year (advisor fees AND fund fees). 2) Their performance over the last 3, 5, and 10 years compared to a standard benchmark (like a 60/40 index). If they cannot provide this clearly, leave.
CFP vs Financial Advisor?
'Financial Advisor' is an unregulated marketing title. A CFP® (Certified Financial Planner) has passed a rigorous board exam covering investments, taxes, estate planning, and insurance, has completed thousands of hours of experience, and is bound by a fiduciary standard.
Pay off mortgage or invest?
Mathematically, if your mortgage rate is very low (e.g., 3%) and expected market returns are higher (e.g., 7%), investing builds more wealth. However, paying off a mortgage provides a guaranteed, risk-free return and peace of mind. An advisor balances the math with risk tolerance.