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I looked into fee only advisors in my area for investing and 100% of them charge a minimum of 1% AUM in order to "do their thing" with it. It was pretty crazy e
by sb8244 4y ago
I looked into fee only advisors in my area for investing and 100% of them charge a minimum of 1% AUM in order to "do their thing" with it. It was pretty crazy experience to go through. Most of these advisors are creating a portfolio using ETF index funds, so it is a pretty outrageous price to pay.
I did find one that sold hourly consultations and she was really helpful at confirming my plan and that another situation I may have gotten myself into was not a good deal for me.
I say all of this because $500-1000 for a fee-only advisor is something I literally could not find. Additionally, advisors I researched have minimums in the hundreds of thousands range.
I ended up following bogleheads methodology and I think I'll be happy. It's still pretty new so no real data yet.
- bombcar 4y agoVanguard seems to offer advisors at a certain point -https://investor.vanguard.com/advice/financial-advisor https://investor.vanguard.com/advice/financial-advisor but honestly I'm not sure what they can really provide beyond the standard bogleheads. A separate advice session from a tax guy can be worthwhile but always remember that the tax guys work to minimize taxes, which isn't necessarily always the goal. The bogleheads forum is great for general advice, even if you only read it: https://www.bogleheads.org https://www.bogleheads.org
- synu 4y agoEven simpler than that, is there any reason not to go with something like a Vanguard Lifestrategy which implements something quite close to a Bogleheads mix? Asking sincerely as that’s what I’m using now, and it’s just so easy it feels like there must be some unanticipated downside.
- benjaminwootton 4y agoI agree. Buy some low cost diversified funds through Vanguard. I cannot understand why the average investor needs anyone else in the loop.
- readams 4y agoThose funds have higher costs. If you want to do that (and it's a good idea) look at the portfolio allocation and then buy the ETF version of the underlying assets.
- bombcar 4y agoThis is really the only downside (beyond them being perhaps too conservative - but you can adjust by selecting a different “year”).
- 9991 4y agoThat’s not a fee-only advisor. A fee-only advisor will charge an hourly rate for time you’re actually meeting or a flat dollar amount. Never a percentage of AUM.
- treyfitty 4y agoPercentage of AUM is a common structure for wealth management/financial advisors.
- selykg 4y agoFor ongoing management. Yes. That’s NOT what people need most of the time.
- 9991 4y agoThat’s right! Did you know there’s a name for the subset that don’t?
- NovemberWhiskey 4y agoNo, you have that wrong. The opposite of "fee-only" is "commissioned-based" - where you don't have transparency into the cost of the advice (which is free at the point it's offered) because it's kicked-back to the advisor by the funds etc. that are being offered. A fee based on AUM is an entirely standard way of paying a fee-only adviser. ref. https://www.napfa.org/financial-planning/what-is-fee-only-advising https://www.napfa.org/financial-planning/what-is-fee-only-ad...
- rco8786 4y agoYes but that is the opposite of fee-only
- treyfitty 4y agoNot true. There’s AUM fee only, and flat fee only.