Are Financial Advisors Worth It? | Wealth Managers | MUST Ask Question

Are Financial Advisors Worth It? | Wealth Managers |Must Ask Questions
has 5 Important Questions to ask to answer this question.

Camille Gaines, AFC
Wealth coach
Accredited Financial Counselor
----------------------------------------------------------------

Here are the 5 questions to answer whether financial advisors are worth it.
1. Do you get a higher investment return on your own than with your financial advisor AFTER FEES?
The question is not really can you, but do you, since financial advisor fees will eat at least 1% of your investment returns, usually.
Depending on account size – average for a million dollar portfolio is about 1% - Source: advisory HQ
How much your advisor charges

2. Are you willing to take the time it takes to learn how to invest and to invest your own money? If you’re not, this supersedes the other 2 questions. Do you know how to invest? Or are you willing to learn how to invest?
Investing in an etf portfolio is not hard. Most investing strategies, even those a financial advisor uses, divides your investments among stocks and bonds, and possibly another asset or two, but many only invest in stocks and bonds.
3. If you answered yes to the last question, here’s the most important financial advisor interview question:
Is your financial advisor or wealth manager outperforming the benchmark after fees?
What is the benchmark? Index for any asset class, like the S&P 500 index. This is some of the best financial advice I ever learned.
4. Does having a financial advisor keep you from making more money elsewhere?
Job, making alternative investments, such as real estate or small bs
5. Does having FA increase your quality of life by reducing your stress and are you at a point where this can be a priority?

_______________________________________
Retire Certain is about alternative retirement strategies from income streams and wealth building.

Be sure to Subscribe, Click that little Bell after you subscribe so you know when I post a new video, and leave a comment or question.

Nothing in this video is meant to be taken as personal financial advice. Hire a financial professional if you need one. As a wealth coach, I do not invest for others.

[heatherholdings]

I'm left struck with thousands of dollars disappearing from my 401k due to soaring inflation. Where can I safeguard and grow $500k cash for next 2 years at no risk? my goal is to retire early and afford my lifestyle after retirement.

[jenniferswicegood]

I like your comment at the end that hiring a financial advisor really is just delegating to someone else to make your financial decisions for you. Thanks for the thought provoking perspective.

[Alesini]

Great video! Thank you! I just subscribed to your channel 😊

[rbbrfish]

Great sets of questions that should, on their face, seem obvious...but really aren't.
The clarity and common sense is appreciated. Thanks!

[steveallen]

Thanks, great advice, now looking for tools to become more informed on my options

[stephenwright]

I find investing fairly straightforward. Combined with some research on decumulation strategy, tax management, medical considerations, etc. I enjoy doing the management myself, so I wouldn’t look to have someone else do it.

[midwestbd]

Hiring a financial advisor is like going to college. You pay a fee but can learn a ton about investing and money management. The bulk of my portfolio is managed through American Funds and once I felt comfortable investing on my own I starting buying stocks through Vanguard to boost my retirement funds with much lower fees.

[pwong]

I completely agree not worth using a financial advisor and a planner if you have substantial 7 figure portfolio. If in doubt, invest in index funds long term hold in S&P or Nasdaq or large cap equity stocks.

[MrMinnesotaMac]

The question you should be asking is are you prepared to give away 57% of your potential future growth (over 30 years) for a financial advisor. Most advisor companies have gone to a % fee system. My advisor was charging me 1% to manage my accounts whether I made or lost value. Then consider that my advisor put my money into funds that also charges a 1% expense ratio, so now 2% is being taken out every year. Over 30 years that come to 57% of potential growth. Find yourself a low expense ratio index fund and you'll meet the market, which most advisor don't achieve, by the way. This way the potential loss goes from 57% to approx. 5% over 30 years. Oh, and by the way, if your advisor is charging you 2%, you're losing 76% of future growth thanks to those fees. Educate yourself and do it yourself. Not financial advice just a little bit of reality.

[TylerThomas]

The main takeaway from this video for me was to check if the money you make after fees is higher than roughly 7%-8% (the benchmark S&P500 she was mentioning)
If you aren’t making more money than that, then it’s not worth it and you should just figure out how to put your money into an index fund like SPY or VOO or these others.

[vmobile]

There is a lot of comments on investing I don’t understand and a advisor is helping me until I can take over It’s worth the fee until that time i’m on
my own .

[NabilTX]

I've NEVER seen a financial advisor beat the benchmarks! In fact, when asked about their performance they say: no two clients are alike, we cater the portfolio to your needs (a great way out for them not to show their performance!)

[hikkyso]

Thank you for the great advice! I have been paying 2% fee to my advisor for 5 years. She has been very helpful but 2% fee is really big to me.. Recently I began to think that I want to manage my own money... and I found your video. Is it possible to move all the holdings (or a portion) to another my own account if I am willing to learn and manage the investment?

[tonyf]

Financial advisor in our case is worth the .75% all day every day!
After selling our company our advisor readdressed wills, trusts, pension funds, property.
Worry free and performing well above what we would have possibly made with stress!

[anthonyvanburen]

After you enter retirement and your portfolio is set do you still need a financial advisor. I’m thinking I only need a financial advisor for help with Roth conversions and tax harvesting. Perhaps fee only hourly is appropriate.

[ISEEKSPACE]

I don't know how to invest, but was thinking of using robo-advisors to kind of get me started. I've listened to so much content on investing, but none of it really walks you through any of the process or gives you examples on how to use an investing platform and what not. So, at this point, I'm gonna go for a robo-advisor. I would love to create passive income to be a bit more comfortable, but it seems like its all one big secret where they tell you S&P 500 and Vanguard and mutual funds or buy stock or diversify your portfolio and I'm just left with okay, but how? Lol...

[jaynelson]

How much does a financial advisor really cost? According to financial guru Michael Kitces, because they buy most purchases at zero cost and keep you from making dumb mistakes, 1% really costs .33%. In 2022 the market was down 20% (some ETFs 30%) and my low was down 7%, critical when in retirement. I think at least in my case a financial advisor is worth it. Doesn't mean I don't pay attention though...

[JimmyMins]

They are definitely worth it…Of course you have to pay for a service.

[grantmagner]

Have you heard of a company called Facet Wealth? I’m curious what you think. They apparently charge a flat monthly fee (not tied to AUM). I’m also on the fence about getting an advisor since managing my own investments is fun, but sometimes I worry I might be missing something (like tax loss harvesting, optimal rebalancing, asset allocation). Maybe at the end of the day though, after fees, the advisor won’t do much better than a simple boglehead 3-fund portfolio

[jefferyaustin]

Financial advisors suck all your money away. 1% is too much. Remember when the market tanks you still have to pay 1% for the advisors. If have
$ 1, 000, 000, You have to give away $10, 000. Remember the advisors care for their own interest not you.