What is a reasonable fee for a financial advisor?
Question:
Answer:
Unless you are quite wealthy and in need of extensive estate planning you should never have to pay $5,000 for a plan. That is just ridiculous. For a comprehensive plan with only basic estate planning you will be in the $1,000 -$2,500 range. I don't mean to pick on the Senor, but never take advice from someone who:
A) Tells you what to do without asking about your financial situation, goals, concerns and outlook EXTENSIVELY FIRST.
B) Tells you only to consider buying term life insurance.
C) Uses a multiple of salary approach to determining your need for coverage.
Seek out a financial planner in your area. try the Planner Search feature on the Financial Planning Association's website: www.fpanet.org
When interviewing planners ask alot of questions. How do you get paid? What is your investment philosophy? If I came to you 5 years ago would your advice to me then be different than what it is now? Do you have any clients that would be willing to talk to me about your services?
A planner that has trouble answering these questions should be given more scrutiny. Good Luck.
depends on what they provide - Various advisors can provide an overall financial plan or just specific investment advice and some just sell mutual funds and collect their fee from the fund company. Some charge a 1% fee on assets, other charge a flat fee like $500 for an individual financial plan.
It depends on how complex your issues are. The firm I work for charges $5,000.00 for a comprehensive personal financial plan.
If that number is too big, your best bet is to max out your 401K to take advantage of all mathching. Any money that is left should go into a Roth IRA until you max that out. With all of your investment dollars, buy well diversified balanced funds, (the younger you are the more aggressive it should be), from someone like WM Group of Funds or Frank Russell. Don't try to outguess the market.
Buy term insurance that covers at least ten years of your income. And pay your bills. If you do all that, you will be able to afford the $5,000.00 it takes when you need more sophisticated help.
A lot of people want to pay $150 - $250 for a financial plan. We can barely turn on the copier for that.
More Related Questions & Answers...