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Message
Financial Planner Fee Question
Posted on 3/3/12 at 9:54 pm
Posted on 3/3/12 at 9:54 pm
I need someone more knowledgeable than myself to help me plan for retirement. I've got someone in mind from recommendations. But I've not been able to determine what the fees are or how that works in general. Can any of you tell me what I should expect to pay for this service?
3
Posted on 3/3/12 at 9:55 pm to ssand
In before "You can do it yourself."
Because you can. Vanguard target retirement fund. You're welcome.
Because you can. Vanguard target retirement fund. You're welcome.
Posted on 3/3/12 at 11:26 pm to Cold Pizza
quote:
In before "You can do it yourself." Because you can. Vanguard target retirement fund. You're welcome.
There's a good bit of truth to this as an investment, but retirement planning is about a lot more than just what to invest in.
Depending on the client's age, you could throw in how to play the Medicare game, how to invest in different types of accounts (Roth vs. non-Roth being popular), insurance questions, etc.
Posted on 3/4/12 at 1:07 am to ssand
I assume you are saying he has earned his CFP.
More than likely can expect a Fee Based model which is the only way to go.
He will take a percentage based fee over your portfolio he actively manages. The actual percentage will vary according to the dollar amount inside the portfolio. Aka a $100,000 account might pay 1.50% while a $1million dollar account might land itself at 1% Other variables affect the percentage based on risk tolerance and equity vs fixed income, a portfolio composed of most of the latter might find it under 1%.
Almost no one should do Retirement Planning alone. Are you going to address estate planning and gifting if found to be necessary? Talk to someone that makes SENSE and is qualified. Sadly, I know there are only a few out there, but look hard and do your homework. If you have any other questions do ask.
More than likely can expect a Fee Based model which is the only way to go.
He will take a percentage based fee over your portfolio he actively manages. The actual percentage will vary according to the dollar amount inside the portfolio. Aka a $100,000 account might pay 1.50% while a $1million dollar account might land itself at 1% Other variables affect the percentage based on risk tolerance and equity vs fixed income, a portfolio composed of most of the latter might find it under 1%.
Almost no one should do Retirement Planning alone. Are you going to address estate planning and gifting if found to be necessary? Talk to someone that makes SENSE and is qualified. Sadly, I know there are only a few out there, but look hard and do your homework. If you have any other questions do ask.
Posted on 3/4/12 at 7:54 pm to Signature
Check out bogleheads.org or the book "the boglehead's guide to retirement".
also, +1 to vanguard target fund.
also, +1 to vanguard target fund.
Posted on 3/4/12 at 10:01 pm to Venelar
Pretty much everything above is true. Planning for your own retirement is something you want to take very seriously. A professional financial advisor SHOULD be able to achieve a better ROI (return on investment) all why maintaining a better risk reward profile than investing yourself. However, with that being said, if you put the time in I frankly believe you can manage part of your own money yourself. I dont know how old you are, but the younger you start the better.
A financial planner will charge you one of 2 ways typically. 1) he will charge commission based fees based off each trade he makes- typically associated with Northwestern Mutual type firms and not boutique firms. 2) As stated previously, charge you a % of your assets invested with them. So for ex. they'll charge a 1.5% management fee for 100,000 and less. .5% fee for 500,000 etc.
Be aware of fees. If your invesment manager is putting you in mutual funds you could frankly pick yourself, you are essentially going pay double fees. All funds have a management fee which is typically greater than 1.0%.
Message me if you have more specific questions. I used to work at a boutique financial planning firm (only managed clients with 750K +). I currently work as equity analyst for an invesment firm.
A financial planner will charge you one of 2 ways typically. 1) he will charge commission based fees based off each trade he makes- typically associated with Northwestern Mutual type firms and not boutique firms. 2) As stated previously, charge you a % of your assets invested with them. So for ex. they'll charge a 1.5% management fee for 100,000 and less. .5% fee for 500,000 etc.
Be aware of fees. If your invesment manager is putting you in mutual funds you could frankly pick yourself, you are essentially going pay double fees. All funds have a management fee which is typically greater than 1.0%.
Message me if you have more specific questions. I used to work at a boutique financial planning firm (only managed clients with 750K +). I currently work as equity analyst for an invesment firm.
Posted on 3/5/12 at 6:41 am to greenhead11
You say financial planner. If you are looking for a financial plan to be done for you that is typically a fee paid based on the complexity of your plan. Most plans address, retirement planning, education planning, estate planning (if needed) and survivorship planning. A good planner is not cheap and will get very intimate with your financial situation. Most plans take a few months to finalize and she be updated every few or if something material changes. Financial plans are also buyer beware. I don't think I have ever seen one that said you have too much life insurance. Typically once the planner hands you the plan they are done. You can then choose to implement the plan with them or go elsewhere.
Most people who replied spoke about the retirement plan investments. Find a good fee based asset manager that does not use loaded funds but rather etfs, no loads and individuals. They will charge anywhere between 1%-1.5% of asset value. Not all funds charge over 1% in fees, in fact the better ones do not. Good luck.
Most people who replied spoke about the retirement plan investments. Find a good fee based asset manager that does not use loaded funds but rather etfs, no loads and individuals. They will charge anywhere between 1%-1.5% of asset value. Not all funds charge over 1% in fees, in fact the better ones do not. Good luck.
Posted on 3/5/12 at 9:49 am to Janky
People need to give up on the mutual fund fees attack. The fees do not matter if you are looking for the best returning fund.
There are different levels of skill in investing and the better mangers get more compensation because they get better results.
Consider two funds of the same style:
Would you rather have owned fund A that returned 10% a year over the past 10 years?
Or fund B that returned 6% a year over the past ten years?
The answer is always A. It doesn't matter what the fee was 1% or 10% because performance is net of fees.
Find the fund managers that match the investment process that you like for their given area of expertise and choose the one that preforms the best, regardless of the fees.
There are different levels of skill in investing and the better mangers get more compensation because they get better results.
Consider two funds of the same style:
Would you rather have owned fund A that returned 10% a year over the past 10 years?
Or fund B that returned 6% a year over the past ten years?
The answer is always A. It doesn't matter what the fee was 1% or 10% because performance is net of fees.
Find the fund managers that match the investment process that you like for their given area of expertise and choose the one that preforms the best, regardless of the fees.
Posted on 3/5/12 at 9:51 am to Janky
Make sure the advisor has his CFP, otherwise he is not qualified to do a financial plan
Posted on 3/5/12 at 9:52 am to ssand
quote:
Can any of you tell me what I should expect to pay for this service?
Too Much. 1.5-3.0%
Posted on 3/5/12 at 10:24 am to Maderan
quote:
Would you rather have owned fund A that returned 10% a year over the past 10 years?
Or fund B that returned 6% a year over the past ten years?
So your advice is to find a financial planner with access to a time machine?
Posted on 3/5/12 at 11:35 am to Chad504boy
quote:
Too Much. 1.5-3.0%
I work in the business and 1% - 1.5% is pretty standard. I have seen 2% and wondered how the hell the guy can stay in business with fee's that high. Never seen 3%.
Posted on 3/5/12 at 11:38 am to Cold Pizza
quote:
In before "You can do it yourself."
quote:
Because you can
As Chris Rock once said "You can drive with your feet if you want to but that doesnt make it a good idea"
quote:
Vanguard target retirement fund
Are you suggesting a single fund makes up an entire financial plan?
Posted on 3/5/12 at 2:09 pm to Cold Cous Cous
quote:
So your advice is to find a financial planner with access to a time machine?
If at all possible, yes!
It is impossible to grade off of a future time frame so the most accurate predictor is indeed the past. There is a reason some fund mangers lead their category in all time frames. They are better at their job.
Research the investment process of the fund manager. The how, what, why, when, where they are using to pick stocks. Look at how that process has done in good and bad markets and how it matches your risk appetite etc. Then make your decision.
Just picking a low priced fund doesn't give you an edge over a higher priced one.
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