We Each Hired a Flat Fee Financial Advisor. Was it Worth It?
Jun 19, 2022
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Eric and Jason, who both hired a flat fee financial advisor for $1,000, share their intriguing experiences. They discuss the benefits of the fee-for-service model versus traditional methods. The duo dives into key topics like personalized financial strategies, navigating complex investment decisions, and optimizing retirement savings for small business owners. They also reflect on investment strategies, the significance of targeted questions during consultations, and the impact of professional advice on achieving financial goals. Is this approach right for you? Tune in to find out!
The podcast highlights the benefits of hiring a flat fee financial advisor, contrasting it with traditional asset management fees for cost-effectiveness.
Both hosts emphasize the importance of selecting a suitable advisor who understands individual financial needs and can provide objective insights.
Post-consultation, they value comprehensive reports and actionable steps that prompted them to reevaluate and adjust their investment strategies effectively.
Deep dives
Experimenting with Financial Advisement
Both individuals explored the concept of hiring a fee-for-service financial advisor to independently review their portfolios. They aimed to test this model of financial advisement, contrasting it with traditional asset management arrangements they had encountered in the past. Jason had previously worked with advisors but transitioned to managing his own portfolio. Eric, interested in obtaining an objective professional opinion as he nears retirement, undertook this process as a way of refining his financial strategy.
Selecting the Right Advisor
Finding a suitable financial advisor involved utilizing various resources, including financial media and planner directories. The individuals emphasized the importance of choosing someone who understands their specific financial needs and preferences. Eric scrutinized various advisors' offerings, while Jason selected an individual with a proven track record and expertise in financial media. Their choices were influenced by the desire for an objective review of their portfolios without long-term commitments.
The Initial Consultation Process
The process of consultation began with an introductory call, where the parameters of the service and fee structure were outlined. Clients were required to fill out a detailed questionnaire about their portfolios and specific financial questions before the main consultation. Both individuals took this seriously, submitting extensive lists of questions to ensure they received substantial value from their sessions. They noted that the consultations followed a similar structure, focusing on establishing expectations and discussing portfolio details.
Gaining Insights on Portfolio Strategy
During the consultations, the advisor provided valuable insights into the clients' portfolio allocations and withdrawal strategies. Jason focused on evaluating his asset allocation, which was heavily weighted towards equities, while Eric wanted guidance on transitioning into a more conservative strategy as he approached retirement. Both received feedback that prompted them to reconsider their current allocations, especially regarding fixed income investments and overall risk. The discussions extended into various strategies to mitigate risk and ensure their portfolio structures were more aligned with their retirement goals.
Actionable Steps and Follow-Up
Post-consultation, both individuals received comprehensive reports summarizing their discussions and outlining actionable steps. They recognized certain recommendations that would require immediate attention, like reallocating investments and reviewing their emergency funds. Each was encouraged to follow up with any lingering questions to fine-tune their financial strategies further. They found value in the ongoing opportunity to engage with the advisor for clarification after their initial consultations,ultimately feeling satisfied with the experience they had and the adjustments they made.
Here's what we learned by hiring a financial advisor for a fixed fee of $1,000. Rather than pay a costly ongoing assets under management (AUM) fee, we wanted to test out this increasingly popular fee-for-service advisement model. Eric and Jason discuss each hired the same fee-only, advice-only advisor for $1,000 to evaluate their portfolios and answer a variety of key questions. They share how they found this advisor, what the process was like, the specific questions + answers they had, and who they think could benefit from such a service. Is this the right option for you? Maybe.