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The True Cost of a Financial Advisor, Revealed

Letting a professional handle your financial future may be less costly than you think.

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In a society where people turn to social media for help deciding between paint colors, why do so many trust our financial futures to…ourselves?

As research consistently reveals, working with a financial advisor nets investors an average of 1.5% to 4% in additional annual returns. Planning for retirement without the benefit of a financial advisor’s keen insights just doesn’t seem as practical.

The value of working with a financial advisor varies by person and advisors are legally prohibited from promising returns. Still, research suggests people who work with a financial advisor feel more at ease about their finances and could end up with about 15% more money to spend in retirement.

A recent Vanguard study found that, on average, a $500,000 investment would grow to over $3.4 million under the care of an advisor over 25 years. In contrast, the expected value from self-management would be $1.69 million, or 50% less. In other words, an advisor-managed portfolio would average 8% annualized growth over 25 years, compared to 5% from a self-managed portfolio.

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So, why do some Americans continue to walk the financial road alone and not work with a financial advisor? Some believe they can’t afford it. In actuality, the fees financial advisors charge are often less than most people think, and the insights they add often surpass an advisor’s cost.

The truth is, financial advisors often charge a percentage fee for Assets Under Management of between 1-2%.1 A 2017 AdvisoryHQ study found that the average AUM fee for a $50,000 account was about 1.18% or $590.2 Many Advisors also charge hourly fees of between $100-$300 and between $1000-$3000 for special projects.

Simplifying the Process

It seems logical that a financial advisor can help families make more informed investing and retirement decisions. But for many Americans, the reason they’ve never enlisted the help of a financial advisor is they simply don’t know where to find one, or how to evaluate their proficiency and pricing.

That’s why we created a free quiz to help Americans find and vet qualified financial advisors near them.

This quiz asks about your financial goals, then matches you with three fiduciary financial advisors. You can compare your advisor matches based on their specialty, pricing, and more. You even earn a free consultation with each of our matches, so you can compare them and be fully prepared to pick a financial advisor.

Click here to get started.

Comments
  • Donald J.

    I have worked with financial advisors (working for major companies like Merrill Lynch, etc.) for over 35 years and have been consistently pleased with these associations. Advice has almost always been worthwhile and directed to my goals and desires.

    Reply

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