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Is a good financial advisor worth 1% of assets per year?

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John M
John M
1 month ago

Only if it’s keeping you from making big mistakes. If we assume you were going to put your money in a Target Date Fund appropriate to your age, then under almost any scenario that 1% will cost you over 15% of your final portfolio balance. It’s a pretty steep cost to pay for 30 or 40 years.

Carl Book
Carl Book
1 month ago

If all they are doing is move you’re money around using a robo system, they aren’t adding any value. I would much rather pay a fee for the service provided rather than pay a percentage of assets.

Purple Rain
Purple Rain
1 month ago

No. There are fee-only financial advisors who can do the job equally well. Mine charged $1200 for three sessions, well under a percentage of my portfolio.

William Ehart
William Ehart
1 month ago

Only if your own investing impulses really need restraint and you have less than $1 million in assets. If you are prone to shooting yourself in the foot, you probably are costing yourself well more than 1% a year. Following the advice of an advisor may help steer you away from the typical costly mistakes many investors make.

johntlim
johntlim
1 month ago

This depends on your level of assets. The larger your financial assets, the more likely the answer to this question is no. A good financial advisor can be worth it if she 1) puts your interests ahead of hers; 2) does more than just manage your portfolio; 3) keeps investment expenses very low; and (especially) 4) keeps you from making major behavioral mistakes.

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