Financial Advisor Question

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Originally Posted by bae

This thread is giving me an idea for a new, useful, business. One time charge for initial consult and advice, then a per-hour fee for future consultation and updates. Keep things simple and inexpensive, help folks, rake in cheese money.

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Already done... called a fee-base financial planner. I contacted one over 10 years ago for less than $100. I suppose it depends how organized a person is with their finances or if they have lots of work to do to figure out where they stand to determine the fee charged? I found out we were underinsured and was told I didn't need help managing our money and was realistic in plans to retire. It was so reassuring to have someone else eyeball our finances and agree with our assessment.

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Originally Posted by bae

I generally think most financial advisors are a waste of time and money if you have normal finances, as they seem to deliver cookbook approaches that you could do yourself with an hour of Google learning, and I think it is important to at least have a baseline level of understanding of your own finances.

That said, some people can’t for various reasons do it themselves, so for them, maybe it’s helpful. $1200/year still seems to me a bit high - I can’t imagine the job described takes very long, and $1200 for on-call services for such simple tasks is silly.

For reference, I keep a sizable (7-8 figure) sum under active management with a reputable firm, and they charge me 0.5% per year of the portfolio value, and no fees. They also happily provide the sort of baseline financial advice and assistance for free, but Schwab does that too for me, also for free.

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That fee management of .05% jives with what I know from friends. It must be the industry standard.

Those who have 7 -8 figures in brokerage accounts are charged .05% while we lesser mortals pay 1%. I’m pretty sure that if DH and I put all of our investments into one brokerage account it isnt enough to beat a 1% fee.

One of my friends who handles millions through her family trust and who has a crap ton of money herself, stepped in to help our other money-clueless friend who has multi-millions. She bitch-slapped the manager of our clueless friend’s money, and rightly so. One thing the guy had done is buy a large parcel of of farmland/woods in clueless-friend’s name, and he regularly went hunting on that land with his buddies. Hmmmm….He was also charging more than the standard .05%. He was fired post haste.

That reminds me of Johnny Cash’s business manager who bought a lovely country retreat in Cash’s name and used it regularly. Cash didnt know about this real estate until the underhanded shenanigans of his business manager were revealed.

There really is no substitute cor monitoring your own finances.

I know of an author whose companion/caretaker "acquired" the rights to all her books, a healthy backstock of industry standards, reprinted again and again. This person died and the property was discovered in her will/estate. That was challenged of course and the rights were given back to the author, in their 80s at the time. That took time/$, an auction was held to raise money to aid in the effort.

Also, there was library director in a small town, who lived on a boat. When he died, the town discovered that it owned a boat...

JD Roth says "Nobody cares more about your money than you do." I agree that's the way it should be.

My mother's new conservator is getting 1 percent of her assets annually. Not just the invested ones, but real estate, too.