Hiring a financial advisor may not cost as much as you think – but is it worth it?
In today’s world, we rely on the knowledge of others to better our own lives. From avoiding products that have 1-star reviews to looking up cooking tutorials and recipes, we turn to expert knowledge and experience for guidance. Why, then, do so many people do their own finances with minimal research or outside help? Or worse – ignore their financial futures completely?
Many Americans wrongly assume that financial advisors are expensive and charge fees for services that people can just do themselves. However, most financial advisors are much more affordable than people think, and provide suggestions and resources that can be worth more than their actual fee.
One Fidelity Study estimated that advice from a financial advisor can add between 1.5% and 4% growth to a consumer’s account over a period of time. * On the costs side, most financial advisors will charge a percentage fee between 0.59% and 1.18% for the assets the manage (often called Assets Under Management, or AUM). ** That means that over time, the benefits of a financial advisor are likely to outweigh the costs, putting you in better control of your finances!
To give a concrete example, if you had a $50,000 account, the AUM fee for a financial advisor might be 1.18%, or $590. If the advice you receive helps grow your account between the expected 1.5% and 4%, you could end up with between $750 and $2,000 worth of growth over time! The financial advice literally pays for itself, and then some. That being said, not every financial advisor has the same fee schedule. Other common fee schedules can be seen below:
|Fee Type||Fee Cost|
|AUM Percentage Fee||0.59% to 1.18% annually|
|Fixed Fee||$7,500 for portfolios less than $500,000|
|Hourly Fee||$120 to $300 per hour|
With most financial advisors being affordable and eager to help, why do many Americans avoid partnering with one? Another common reason is that they don’t know how to find a financial advisor, which ones to trust, whether they’re priced competitively, or how proficient they are. After all, if you’re going to spend money on a financial advisor, you want to get the best – but determining which advisor is the “best” can seem impossible!
To help everyday consumers find financial advisors, we’ve vetted top advisors from all over the country and engineered a free quiz to match consumers with advisors based on pricing, specialties, and more! After answering some easy questions about your current financial situation, you’ll be matched with financial advisors that have been pre-screened to fulfill your needs. You’ll then have the ability to compare your matches and even contact them for a free evaluation, giving you the ability to choose the advisor that works best for you!
Don’t wait – compare financial advisors today and take better care of your finances!
*“Why Work With a Financial Advisor?”, Fidelity (November 2021) https://www.fidelity.com/viewpoints/investing-ideas/financial-advisor-cost
** “What are the Average Financial Advisor Fees & Investment Fees Being Charged in 2021?”, AdvisoryHQ (July 2021). https://www.advisoryhq.com/articles/financial-advisor-fees-wealth-managers-planners-and-fee-only-advisors/