By Dr. Jim Dahle, WCI FounderWe recently had a discussion at our WCI business meeting about the cost of financial advice and how much is too much. For many years, I've told WCIers a few things about the cost of financial advice, including:
- Get good advice at a fair price.
- There is no price low enough for bad advice.
- If you pay via an Asset Under Management (AUM) fee, you need to calculate the fee each year.
- Good financial advice and service can be obtained for a four-figure amount per year (given inflation, perhaps this needs to be updated to <$15,000 per year).
- A 1% AUM fee is a great deal for someone with a five- or low six-figure portfolio but a terrible deal for someone with a mid-seven-figure portfolio
However, we're faced with the task of maintaining a recommended list of financial advisors on the website. This task is important to meet our mission to connect WCIers with the good people in the industry and to maintain profitability. We actually have to decide when someone is charging too much to be on the list, even if we think they give good advice and service. That was the subject we were discussing in the meeting, and in preparation for it, Cindy (who's been with us for 10 years and is currently the director of advertising) put together a list of the financial advisory firms who were on our recommended list and the maximum amount they could be charging to somebody with various amounts of money under management.
The information helped us to make some business decisions, but I thought the list was way too interesting (and represented way too much work for Cindy) not to share it with you as a piece of content. Let's take a look at how much a good financial advisor costs.
The Cost of Financial Advice
On the date this list was made (in June 2024), this is the maximum that a client could pay to each of these firms (assuming they didn't negotiate a lower rate).
It's always tough making comparisons like these since you are comparing apples and oranges. Note that the three columns on the right generally include the financial planning fee; it isn't a separate fee on top of asset management. Some firms only do financial planning, a few only offer asset management, and each of them has a different fee structure. But there are a lot of lessons that can be learned from compiling all of this data and looking at it all together. Note that these are ALL fee-only firms. We believe that paying for financial advice via commissions leads to bad advice. Even good people can't fully resist the terrible malincentives prevalent in the industry when they are paid the most to sell the worst investing (and often insurance) products.
#1 The Range of Fees Is Massive
Even if you just look at a financial planning-only service, you will see a massive range in fees. You can pay $600, or you can pay $12,000. Same service? I hope not. In fact, I'm a little skeptical that a solid financial plan can be offered for $2,000 (whether as a one-time or as an annual fee), much less $600. Likewise, the fees can be highly variable on the asset management side. What one firm does for a flat $7,500 a year, another may charge as much as $36,000—4.8 times as much money.
More information here:
How to Find a Good Financial Advisor at a Fair Price
Are Financial Advisors Worth It? Should I Use a Financial Advisor or Do It Myself?
#2 Avoid Firms Charging More Than 1% a Year
Note that this list is composed of the good people in the industry. If you come to us with an AUM fee >1%, you're probably not getting on the list at all. If you're looking at a firm that wants to charge you 1.5% or 2%, you've got to ask yourself why you would be willing to pay that when there are so many people who will do it for less. Even the most expensive person on this list isn't charging 1% a year to someone with a $4 million portfolio (incidentally, about 18% of WCIers have a net worth of more than $4 million). Don't pay more than 1%, especially if you have a seven-figure portfolio.
#3 You Really Do Have to Do the Math AND Possibly Negotiate
Many of the firms I allowed on the list because I thought their published fee was fine for many WCIers with a $100,000, $500,000, or even $1.5 million portfolio. That doesn't mean I think their fee is fine for an $8 million portfolio. You have to do the math. And if the math shows you're being ripped off, you have to either negotiate a lower fee or change firms. I know many WCIers don't like calculating the fee, don't like negotiating, and certainly don't want to go through the hassle of changing firms. If that is the case with you, don't even get started with a firm that charges an AUM fee. There are plenty on the list that use hourly, flat, or tiered prices where you won't have to do any of that stuff.
#4 Some Increase in Fees as Assets Grow Is Probably Appropriate
There is more risk in managing more assets. Mistakes in asset management (and they certainly happen) become more costly, and most clients expect you to fix them either out of your own pocket or via your errors and omissions insurance policy. It's totally appropriate to charge someone with $10 million more than you charge someone with $1 million. Not 10 times more but a little more. If you're expecting someone to manage your $25 million portfolio for $5,000 a year, you're probably out of luck. As you can see, there are very few truly “flat” fee-charging firms out there, and even those are in the high five figures.
More information here:
How Many Doctors Actually Have a Financial Advisor?
Can You Spot the Unbelievably Bad Financial Advice on These TikToks and Tweets?
#5 Being Your Own Financial Advisor Is the Best Paying Hobby (or Side Gig) Out There
If you can learn to competently perform as your own financial planner and investment manager, that ability is worth something between $3,000-$36,000 per year. For many of us, that's a lot of money. Even if you don't like mowing your own lawn, you'd still do it if it cost you $36,000 to get someone else to do it. Even if you're only paying $10,000 a year to your financial advisor, with compound interest at 5% real that adds up to over $2 million (in today's dollars) over the course of 50 years.
Many docs retire with less than that. How many years of work would it take you to earn $2 million? Are you sure you can't learn to do this yourself, even with the help of something like our Fire Your Financial Advisor online course?
There is no shame in using a financial advisor. I still think 80% of docs would be better off if they had a good one, even if cost them thousands per year. But make sure you're getting good advice at a fair price.
Whether you’re a DIY investor needing a financial checkup or you want to have an expert manage your entire portfolio, WCI has cultivated a list of trusted financial advisors who will give you outstanding personal service. They can help you design a portfolio to reach your investing goals, or they can simply make sure you’re on the right path to retirement. Check out our WCI-vetted list today and know you’re getting good advice at a fair price!
What do you think? Are you surprised at the cost of advice? How much do you think is reasonable for an advisor to be charging for financial planning and asset management at each of these tiers?
Do any of these advisors offer options for DIYers who basically only need certain niche questions answered? Basically investors who do not need a financial plan or asset management, but just may need help on an hourly basis with some difficult questions.
What you’re describing is a financial advisor for “validators”. It’s a very hard business model. Plus, there’s the fact that some answers are “it depends” and until an advisor understands your complete financial picture, values, goals, and financial plan, they can’t give you the right answer.
But in your case, it would be best to look only at advisors that charge an hourly fee. Describe what you’re looking for, make sure they know you’re willing to pay a fair price (might be a higher hourly rate than you’d pay for long term service), and see how it works out.
The alternative is to try asking your questions on our forum, FB group, and subreddit. The price is right but the advice might be worth what you pay for it. I’ve been surprised how much valuable, high-quality advice is given out for free though.
Rick Ferri has a portfolio second opinion service that costs $995 then $450 per hour thereafter for additional questions. I was happy with it.
Always love Rick. I hear the wait is many months these days though for his service. Wish there were more like him. He certainly has no need to advertise here and so is not on our list.
I just looked up Rick Ferri’s website and it says:
PLEASE NOTE: Due to high demand, new clients are experiencing up to a one-year delay for a Portfolio 2nd Opinion™. Please use the CONTACT page to be placed on the waitlist.
He clearly isn’t starving for clients! But further down on Rick’s page, he writes:
Other hourly advisers might have better availability. An extensive list is available at Advice Only Network. Consider Jon Luskin’s comprehensive one-day financial review at JonLuskin.com. I am one of Jon’s industry advisers and have worked with him for several years.
So I clicked on this JonLuskin.com site. He does seem like a great resource for hourly advice for DIY investors. I’m a DIY investor but like the commentator above, am looking for portfolio/financial plan validation. He offers sample financial plans on this website so you can get a sense of what you are paying for. It looks very promising and something that I might sign up for:
https://jonluskin.com/one-day-financial-review/
I know both Rick and Jon and think highly of both of them. Neither of them advertise here though. I don’t know how close Jon is to having a full practice, but he’s probably getting close. His intermittent hosting of the Bogleheads podcast and help at the conference certainly assisted in growing his practice.
Too bad there aren’t more people doing what Rick does.
Rick Ferri and Dr. David Graham are excellent for a brief engagement to “sanity check” a financial plan.
I’m not familiar with Jon Luskin, but if Rick Ferri recommends him, that’s good enough for me.
I assume the fees in your table are annual fees?
Yes, they are annual fees.
Do these fees also include the fees in the instruments they buy like the etf fees?
No. But the good news is that most good investments, at least publicly traded ones, are basically free these days anyway. 5 basis points isn’t much different from 0.
Thanks, the table is great! What AUM fees do you think are appropriate for a mid-eight-figure portfolio? Also, how much extra do you think is appropriate to pay for private equity?
What I think is appropriate and what is out there might be two very different things. But look at the chart. There are people doing flat fee asset management for $7500-9500 and that includes financial planning. So the AUM fee needs to add up to something like that. On $8 million, that’s $7500/$8 million = 0.09%. See my point?
Now, if I were starting a firm perhaps I’d do something like 0.4% with a $5,000 minimum and maybe drop it to 0.2% after $10 million. So your fees would be the following:
$1 million $5K
$2 million $8K
$3 million $12K
$4 million $16K
$5 million $20K
$6 million $24K
$7 million $28K
$8 million $32K
$9 million $36K
$10 million $40K
$11 million $42K
$50 million $120K
etc.
But if you were smart and you felt those flat fee firms charging $7-10K a year were doing just as good of a job as my firm was, you should fire me when you get to $3 million or so and go hire them. At mid 8 figures, you’re talking about $50 million. That’s a lot of risk for an asset management firm to take on for only $10K. But there are at least two of our sponsoring advertisers who charge that.
Private equity is a very broad term. You’d have to tell me exactly what you mean by “for private equity” before I could try to put a price on that.
I wonder how much the average advisor earns per hour. While they may not be busy for 2000 hours per year, easy to believe they are making $500-750 / hour. After all, with that $7500 / year on a millionaire dollar portfolio (seems common with your table) how many hours a year does it really take to manage and hand hold the client?
Seems more worthwhile to do yourself that something like car maintenance. You could easily spend $75k on advisor fees over a 10 year period in your 40s-50s. Not many services cost that much
I think I agree with your second point but not so much your second. Despite financial advice being so expensive, the advisors often don’t make as much as you think. A full practice might be 75 families and maybe they average $600,000 at 1% so total revenue for the practice is $6000*75 = $450,000 and 50% is overhead and so they take home $225K. And that’s with a full practice. Plenty of advisors haven’t yet filled a practice. I think a lot of them don’t even make six figures.
But if you can get 100 families and average $20K per family, you could take home 7 figures.
Greg,
The average financial advisor is out of business…at least 80% – 90% won’t survive the business beyond 3 years. Unless you’ve built your own business and generated your own clientele from scratch, there’s no comparison to your hourly rate as a physician.
As a “good financial advisor” who works with more than 1400 physicians, WhiteCoat Investor has made working with physicians an incredibly low-margin, low-gratitude business. As he describes hypocritically, 80% of physicians need a good financial advisor, yet at least 80% of physicians are encouraged to be their own financial advisor and Fire Your Current One on the same website.
Because of this, physicians don’t respect even the “good financial advisors” when they are taught on this website that they are fully qualified to be their own financial advisor!
I used to ask prospective physician clients if they were looking for advice or trying to DIY, to avoid wasting my time. Now, I ask if they are looking for advice or trying to be their own financial advisor. Besides the few who giggle at my half-serious / half-joking tone, I’m amazed how many are serious + confident that they will be better off themselves…because at least they won’t have to pay another professional for his or her time!
Instead, these same physicians will remain over-stressed over their half-understanding of finance, without regard that their reluctance to pay for qualified help is making their lives worse. And then they’ll try to become real estate experts on the side to complicate their lives further, after being pushed into syndicated real estate on this website. Trying to subspecialize in everything in life will have them looking back in 10 years wishing they spent precious free time with their family.
Sorry to teach your clients not to just blindly do what you say and pay what you ask. You seem to think this website is doing more harm than good. I vehemently disagree. But you’re not my target audience for this blog, you’re its subject, so I wouldn’t expect you to agree with me.
Of course it’s all good from your perspective. The harm is only felt by the good advisors whose clients become infected by the Be-Your-Own-Financial Advisor mantra because they follow you, and it destroys the client relationship under false pretenses. A large subset of your followers possess neither the desire or wisdom to be their own financial advisor or DIY investor. Instead, they just don’t want to pay anything for advice because you and their colleagues who follow you tell them it’s so easy to do it themselves.
The numbers don’t add up though. We both know that much more than 20% of young physicians (graduating med students, residents/fellows, attendings in first 5 years) are following you or at least familiar with your work. As you describe, 80% of physicians would be better off with a good financial advisor. Let’s say 45% of young physicians now think they’re qualified to be their own financial advisor because of you. How many of the 45% think they’re also in the 80%? None. So you’ve certainly helped a significant amount of people if you captured the 20%, but you’ve also converted 25% who need a financial advisor to think they can be their own financial advisor to their detriment.
But as you and Upton Sinclair always say, it’s hard to get you to understand when your business depends on you not understanding it. You’re still getting paid selling ads/courses/books/disability insurance/real estate to the 45%, but to the majority, you’ve spread a falsified mindset of the skills required to be a good financial advisor and an overconfidence of their abilities outside medicine. You think they’re aware of it? Nope. Instead, these physicians are now impervious to good advice, because you gave their ego the final boost of overconfidence it didn’t need.
Next time I’m in the emergency room as a patient, I’ll ask the ER doc to not only treat me, but teach me how to be an ER doc so I don’t have you pay him in the future. Can you imagine how offended you would be by my arrogance to think that I could simple acquire the years of training and wisdom you’ve accumulated in treating thousands of other people in an emergent setting? And on top of that, the disrespect in asking to be taught to avoid paying the same doc for his services and expertise?
We both know all physicians would be incredibly offended by this scenario. Yet because of you, this is precisely how they as patients treat even the good financial advisors. I’ve lost been many good client relationships because of you, and these aren’t your proposed 20% of physicians who can DIY. These are the 80% who now think they are the 20%, because they started reading your website. They don’t want to do it themselves, but now they feel an obligation because they must be getting screwed by their financial advisor after seeing the anti-advisor sentiment on your website.
You think you’re re-distributing commissions saved from the worst advisors in the industry (i.e. Northwestern Mutual) to your business, but you’ve also harmed countless good client relationships with good financial advisors who were getting good or great advice for a fair or cheap price, because the physicians now think they were getting screwed and should be their own financial advisor.
# 1 I’m not convinced you’re a good advisor. Maybe you are, maybe you aren’t. Hard to say while letting you stay anonymous. So we’ll leave out any discussion of you personally, but if you’re losing clients, you ought to at least consider that it is possible you are losing them because a) You’re not giving good advice, b) You’re charging too much or both, rather than anything to do with this website.
# 2 There are really three types of investors out there. There are delegators. These are the people your industry is set up well to serve. They want you to do everything. You’ll do their financial planning. You’ll do their asset management. They don’t want to learn any of this stuff. They want you to be their money guy. If you’re charging a fair price and giving good service, it’s a match made in heaven. You develop long term relationships, you make great money, and they certainly do way better than they would ever do on their own even after paying your fees. Let’s say that’s 20% of investors.
The second type is the hard core DIYer. These are people who take the time to learn the ins and outs of financial planning and investment management at least inasmuch as it applies to their situation. They read books and blogs and interact on forums. Not only are they very unlikely to pay an advisor (because they see the fee as greater than the value), but they don’t want to anyway. They’re enjoying the world’s best paying hobby and probably saving five figures a year off your fees. You don’t want to advise these people anyway because they question everything you do and hate your fees. So they do it themselves and everybody is happy. It’s a real win win. Maybe this is another 20%.
The problem is the third type. The validators. Your industry is set up very poorly to serve these folks. It costs you more to acquire them as clients than you make from them. They just want someone to look at their plan, make a few tweaks around the edges and then they’ll be back in a year or two to check in and let them know if they’re doing all right. This might be 60% of clients. They’re poorly served by the DIY industry (books, blogs, forums etc) because they don’t like this stuff that much (they’re not hobbyists) and they lack some confidence too. But they go to the advisory industry and nobody wants to serve them. The industry just wants them to turn it all over to them and pay them $10K+ a year and not ask any questions. They might find a few firms who do hourly financial planning work, but they’re not thrilled to have to pay $300, $500 or more an hour, the price these firms must charge just to stay in business with the advisor not even making very much. The advisor isn’t happy. The client isn’t happy. Nobody’s happy.
So this is the dilemma. What do we do with these folks? Some of them might become DIYers with the help of an hourly advisor or something like our Fire Your Financial Advisor course. But they’re not going to be awesome at it. Good enough? Maybe. Some might give up and just become delegators but always resent the fees. And some will continue to muddle around for years trying to figure it out and not be successful. It’s a real shame.
So I criticize you for what you’re doing to these folks and you criticize me for what I’m doing to them. It’s a real problem though. And that doesn’t even count the vast majority of Americans out there who can’t afford any financial advice at all. If they had $300 they’d pay their old medical bills or buy groceries with it, not pay it to an advisor for an hour’s worth of financial advice.
At any rate, you’ve got to realize my audience is not your client. The people you actually want are not the people reading my blog. So don’t be mad at me for stealing your business.
I don’t have a dog in this fight but I do want to commend you for giving a well thought out response to a clearly angry person. I’m not sure most would take the time.
I worked in the software industry mid 90s through early 2020s. That industry had 10s of thousands of consultants that made a ton of money often providing limited value. A shift to cloud software eliminated a whole swath of consulting firms that used to do implementation services . I saw first hand how pissed they were, and how they blamed everyone around them, but they were tilting at windmills. They couldn’t accept the fundamental transformation happening in front of them . I’m not saying this is an identical situation but I see some similarities. Some good consultants went under with the bad. The ones who survived adapted.
I think it will be interesting to look back on the financial advice industry 20 years from now. I don’t think it will look anything like it does today. I would not be surprised at all if the majority of young accumulators are paying an AI bot to manage their investment decisions. The rest of advisors I think will get pushed up market competing for a smaller group of super high nw clients. Just speculating but I would not be surprised at all.
Wouldn’t surprise me either. Thanks for your kind words.
Sorry CFP, but it’s both arrogant and naive to compare emergency room medicine to learning to be your own financial advisor. The average MD (or in my case, PhD) has more than enough intelligence to learn all of the basics and most of the advanced strategies of financial planning. But learning to treat the dozens of maladies that show up in the ER? Sorry, the two are not even comparable.
As a flat fee planner (no AUM, all clients pay the same rate) on the WCI list I’m happy to tell you what I make. I just looked at my most recent paycheck which shows YTD earnings of $134,304 and 1386.67 hours worked. That’s $96.85/hour.
Ongoing clients pay between $2300 – 3500/year depending on what service level they choose. Average time spent per client per year preparing for meetings, reviewing their plan, sending check in emails/newsletters, and answering email questions is 8 – 12 hours each year. On average that means clients are paying ~$300/hour for help.
I don’t think many flat fee planners are getting obscenely rich on this business model. I believe I make a very good living and feel fairly compensated. I really enjoy my work, I love the ongoing relationships with my clients, and find the work/life balance to be very sustainable.
Remember the advisor has to do a lot more than you do. For example, I manage my parents’ portfolio in about 1 hour a year. So I guess I would make upwards of $10K an hour for that hour if I were charging 1%. But a real advisor has lots of other stuff to do. She has to meet with them, generate some reports, do continuing education, maintain licensure, keep the business running, prospect for new clients, supervise staff etc. You can save a lot (time and/or money) cutting all that out.
But I agree with your general point that being your own financial planner and asset manager is the best paying hobby in the world. Man, if Katie and I were paying 1% a year for our portfolio now we’d be paying an advisor more than I’m earning as a part-time doc.
Thank you for this detailed comparison!
One question – given the range of rates listed here – what would you say constitutes a “good” versus “great” financial advisor? In other words, how do you know? What services should one expect in return if they do charge on the higher end?
Thanks again
Great question. My mantra is good advice at a fair price. However, it turns out it is way easier to figure out if you’re paying a fair price than if you’re getting good advice. In fact, in a lot of ways, by the time you can recognize good advice, you know enough to do it yourself. I’ve written lots of posts over the years about recognizing good advisors and how to choose one. Here are some of those posts:
https://www.whitecoatinvestor.com/12-things-you-should-know-about-choosing-a-financial-adviser/
https://www.whitecoatinvestor.com/how-i-would-choose-a-financial-adviser/
https://www.whitecoatinvestor.com/the-perfect-financial-advisor/
Maybe it’s time to write another one on the topic.
As far as services, the more they do the more they’re worth. Financial planning and asset management is worth more than just one of those services. If they advise on your workplace retirement plans in addition to your IRAs and taxable account, that’s a value add. If they also give tax advice and do tax preparation, that’s a value add. If they will help with your business and business planning, that’s a value add. If they manage your practice retirement plan, that’s a value add. If they help with accredited investor type investments, that’s a value add. If they also give high quality student loan advice, that’s a value add (studentloanadvice.com charges $500-600 for that alone.) But for what some advisors are charging, as a hard core do it yourselfer, I’d expect them to come over and clean my house and wash my car and walk my dog for that. I guess that’s why I don’t have an advisor though.
I was happy to see this topic covered and the transparency you bring to financial planning and advise. A long time ago I learned there is no such thing as a free lunch. I also learned that good advice and expertise cost money. However, bringing transparency to the table and breaking the process a part is helpful.
Many “financial planners” and CFPs really are wealth managers and insurance agents. Nothing wrong with that as we need that advise too. For years I used a financial advisor who was a JD, CPA, CFP and brought a wealth of knowledge to the discussions. However, since he managed money and sold products, I didn’t know whose retirement plan he was working on mine or his. Fortunately, I have 30 plus years of financial services background and knew the questions to ask. I could be a DIY but chose not to be.
This is a very useful article. The range of prices are good to know so you don’t wind up being an outlier.
It would have been helpful to see that before I chose an advisor, but as it turns out my current firm charges in the middle anyway. (picked from WCI’s list)
The company where my 401k is offered a contract with a 1.07% management fee which would have been over 25 grand a year. I instinctively declined without a second thought. Besides, I enjoy the DIY aspect. However, given that this company has 5 trillion under active management, there must be quite a few takers.
My financial planner is a flat fee fiduciary. And I am very pleased.
I was a Bogleheads, WCI, MMM DIY in the accumulation phase. Advice like don’t debt and fund your retirement doesn’t take a financial planner. I got to low 6 figures all on reading the classics and blog sites. I’m moderately wealthy enough. What my FP does for me is run projections based on assumptions that fit me: 64, fit, children that out earn me and vociferously do not want an inheritance. My work situation became toxic. My FP has helped me to see how to de-cumulate with grace and guardrails and convinced me to allocation 60/40. I am using ACA healthcare, I have previously used COBRA. This is probably half the fee by itself. I could buy the software and run projections I suppose or just assume the 4% and run with it, but having someone else figure out tax implications and point out spending certain money first and basically organize the whole schmiel is work the 10k to me on this wave of retirement v. working less. I know 10k/year is real money. But I have peace of mind and somebody else to do the tax loss harvesting and decide whether and how much tax deferred money to convert to Roth. He has never seemed irritable with my questions and has taught me ways I didn’t know how to think. I deeply appreciate WCI and my FP who I found on WCI. They are not in opposition. I have a moderate amount of knowledge, serviceable inclination AND I know my limits. I had dread and now I have greater knowledge and peace of mind.
Awesome that you’ve found the perfect solution for you AND a great value for what you’re paying.
Surely that isn’t $10K per year in fees for a low six figure portfolio, correct?
Yes that is correct. Interviewed 10 financial experts, mostly email, some in person. I feel your question has a tone as if I were a stupid fool.
1. Under 1% AUM.
2. I needed a financial plan and a retirement distribution plan with multiple accounts with Vangaurd, My former employer who cheats, mineral rights in Kansas, and a desire to find out with greater confidence I could leave a soul denigrating, place of moral injury.
3. I don’t think it is a sin to consult with an expert who knows more than I do when making a large decision. Ttue in my clinical care and now my financial well being. Basically in the words of MMM, I had the FU money. I needed an expert to confirm and manage. I am a humble healthcare servant, not an expert in financial planning or retirement. I am a humble and very excellent clinician. And my financial life is worth more than 10k. I feel blessed to have someone to ask my amateur but intelligent questions.
Dr. Dahle has such a quantity of assets. Boy that’s not me. He is also not retired or trying to retire.
My research and education led me to the conclusion this expense was a bargain for all I have received: Money and the relationship.
That is correct low 6 figures (Lesas than 5 million), 10k. I can afford it and it is worth more than what I am paying.
Don’t you just hate the Dr. Google experts? Don’t be that guy.
Do your best and ask for expert help when you reach the limit of your knowledge and/or desire to do cash loss harvesting feed data sets, and manage Roth conversions. I’m happy. My children are happy. It’s a good value. Im not looking at registered investor moves or syndicated investments (Thank you Dr. Dahle for your public experiments, truly). You are more wealthy than I am.
I’ve never made more than 150k, and I started at 43yo so yeah you got it, low 6 figures (less than 5 million) and so happy for the grace.
I did not need nor was I willing to pay any more than Vanguard fractional points during accumulation.
I wrote this response to reach out to people crossing the rubicon of retirement. or maybe working for the joy of it and not a an accumulative salary. And maybe your not Dahle. Your here 60, and. not Dahle.
I needed an expert to run projections and point out things I don’t know.
My actuarial estimate says 106yo for my projected death. Yep 42 years to provide for.
My kids are good, but I want to have wonderful experiences with them and pay for that (Thanks Jim Lange!), have a good responsible plan, a good teacher, a man of decent character to work with me to do the best job.
If you think I am a spendthrift fool, then please respond with your point of view, challenge me. I am fully willing to learn from you as well: Show me your work and some evidence that this is less than a really great decision.
Mathematically, the only way that $10K per year in fees is less than 1% in asset under management fees is if you have more than $1 million in assets. That’s low seven figures ($1,000,000 or more), not low six figure ($100,000 to maybe ~$350,000). I suspect the confusion is that you’re saying you have low six figures when you should say that you have low seven figures.
If you’re getting good financial advice at a price that you find reasonable, that’s good for all concerned.
I was a major med school Ph.D. peds faculty member for 37 yrs. For more than the 2nd half of my career I became a DIY hobbyist and spent most of my leisure reading as a Boglehead, plus follower of Humble Dollar and Bill Bernstein. I have never felt the need for paid financial advice. I was fortunate to marry a woman as frugal as myself. We have no mortgage or other loans. As retirees with a $2M portfolio, we are able to live happily off of SS and a very modest employer healthcare benefit. Our RMDs are gifted to our children. As descendants of depression era parents, it has not been difficult to live the American dream.
As an off shoot of this discussion, how does one find competent, reasonable priced, non self-serving Trust management? I set up a Spend Thrift Trust for my 25 yo daughter. I’m 75 and my friends who are financially savy are also in my age bracket, so the Trust will have to be administered and invested for long time. I contacted the big 3:
1. Fidelity Trust administration fees were actually the lowest, but they only use their actively managed, more expensive funds. When I asked if I could request investments in their low cost index funds they showed no interest.
2. Vanguard never returned my call and I’ve heard/read other negative comments on their customer service (although who can predict sevice years from now). However, I will try again.
3. Schwab also has low fees, including their investment products, but they make most of their profits with invested money sitting in their very low yielding bank deposit accounts, which could be financially “deadly” over decades.
Jim, any suggestions? Are you aware of any of your recomended advisors who can serve as initial Co-Trustee, subsequent Successor Trustee, and who will (hopefully) be around for decades. Thanks. Matt
Good question. No good answer. I’ll start looking around and see if we can come up with a good sponsor to reward with lots of business from good folks like you.
Great. Thank you.
Is paying for a tax planner tax deductible if I am 100% self-employed?
Business tax planning yes. Personal tax planning no. Not since 2018. More info here:
https://www.carsonthorncpa.com/news/can-i-deduct-my-tax-preparation-fees
Just a very high-priority topic, for most of us I’m sure, that I wish Jim had even more blogs and back + forth discussions about. This is great!
Glad you liked it.