Your financial advisor doesn’t have to charge that much. Here’s how to pay less.
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“I don’t have a lot of money, but I would like to hire a financial advisor. How do you do that? â€This is a question we as personal finance journalists receive frequently. A lot of people think a financial advisor is out of reach for them financially because they don’t have a lot of savings and investments, as advisers often charge around 1% of assets under management and may require you to have a certain level of assets, like $ 100,000, before working with you. here’s how to find a more affordable planner. (This tool can help you find a planner that meets your needs.)
Negotiate everything
Advisor fees are often negotiable, so ask what the advisor can do to make sure you pay less. You may want to suggest annual rather than quarterly meetings, which limit the time an advisor spends with you, which justifies reduced fees. Or you might want to inquire about a discount on the services they provide that you don’t receive or need.
Ask about a junior advisor
If you talk to an advisor and their prices are too high for you, ask if there is someone else on their team who could charge you less. Advisors may have a more junior advisor on their team who may charge a lower hourly rate. Note that if you find a financial advisor willing to pay less, it’s important to confirm their legitimacy. “It comes down to the search for the individual. Also, it is true that a more seasoned advisor with certifications will have a higher rate. This doesn’t mean that advisers who charge less or nothing can’t give good advice, â€says Grace S. Yung, financial planner at Midtown Financial Group.
Ask about plans or other ways to save money
Ask if the advisor could offer you a package or other offer that could help you cut costs. “Sometimes I’ve done volunteer work to help people who can’t afford to hire a financial advisor,†Yung explains. (This tool can help you find a planner that meets your needs.)
Find fixed costs and hourly rates, if that makes sense to you
Some advisers work for an hourly or flat rate that can be negotiable, Yung explains. Sometimes these hourly fees are quite reasonable: Network financial planners like XY Planning Network and Garrett Planning Network can charge less than $ 200 an hour, so if you have specific one-off questions, this could be a relatively affordable option for you. you. And according to data from SmartAsset, financial advisors typically charge a flat fee of $ 1,500 to $ 2,500 for one-time creation of a comprehensive financial plan that includes budgeting, retirement planning, estate planning, planning. tax and risk management. This plan could last you for years
Consider a robo-advisor, especially if they also have access to human advisers
“Robo-advisors offer simplified, low-cost investment management using a digital platform and computer algorithms. In addition to low costs, many have no or few minimum accounts and offer professional investment management for all asset sizes, â€says Tiffany Lam Balfour, investment spokesperson for NerdWallet. Some robo-advisers like SoFi offer free or low-cost access advisers. “Depending on the provider, these services can be at an hourly cost or have varying costs and account minimums. Usually, they will cost less than a traditional in-person financial advisor, â€explains Lam-Balfour.
Look beyond the price on paper
Paying for a financial advisor doesn’t mean you aren’t up to par with trading fees, fund fees, and expense ratios. Make sure you understand the total cost of doing business with your financial advisor. (This tool can help you find a planner that meets your needs.)