What is the average rate (percentage) one could expect to spend on a financial advisor without feeling robbed?
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This is a really good question (as opposed to all the "How can I make $500 fast?" and "What would you do with a million dollars?" questions).
I think it's extraordinarily difficult to find a financial advisor who isn't just trying to get rich off his clients. They certainly want their clients to get wealthy, too, but that's not their primary concern -- their commissions are.
Going to a fee-based (rather than a percentage-based) advisor would seem to be a good solution, except that I suspect that the truly good advisers make more money if they're commission-based rather than fee-based.
I went to a fee-based advisor, but canceled the contract before we finished. His advise was for me to invest in high-expense funds and annuities that made no sense for me and for which I suspect he was getting kick-backs from the fund companies.
You can do all the simple stuff yourself. Invest in your 401k. If you're fund, invest in stock index funds with minimal expense ratios. Own your own home. Buy Vanguard or Fidelity index funds with money you save after expenses. Use their money market funds (or ING or something) for your "emergency fund", if you want to have one.
I suspect 95% of people are well served with just a "Financial Planning for Dummies" book. That covers the vast majority of situations and gives you all the *questions* that you want to ask. Then just ask questions here or do Google searches to get your information. You can learn most of this stuff on your own.
If you reach a point (like I did) where you just aren't sure what the right answer is, then go for professional help. But don't trust your financial life to someone else who takes 1% off the top (out of the 6-12% you might be making). Keep that money for yourself.
Low expense ratio funds charge about 0.20% per year. I wouldn't want to pay much more than that to any financial advisor.
Good luck,
Doug
depends on the work he did...
else... study on your own...
Most people are better off starting out with a fee-only financial planner. Initially it may be a higher cost than someone who is paid on a percentage or a commission basis. However after implementing the first set of recommendations, following consultations should go more quickly and should cost less.
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