Cost of fee-only financial advisor

[marcus_aurelius]

Context: I'm 50, DW is 48, looking to retire in the next 3-5 years. Living in SF bay area. Net worth is $6M including paid off house, $3.4M not including the house. I have spoken with a few fee-only financial advisors who are fiduciaries and don't have any conflicts of interest (i.e. who're shilling their own funds, etc.) The goal is to do a one-time comprehensive financial plan and rebalance every year after that. The work will involve rebalancing my tech-heavy portfolio, reduce volatility, suggest a sequence of withdrawal, suggest estate planning for the kids, do tax minimization, etc. I expect it to be a decent amount of work.

I found one who seems quite good but her fees are $5800. For anyone who's done this, is this a reasonable fee?

Thank you.

[wageslave23]

That seems very reasonable.  Most financial advisors charge 1% of assets under management which would be 35k per year and do roughly the same thing. Rebalance periodically, help you plan for the future.

[ATtiny85]

Why not do a case study here? I am willing to state with certainty that there are a number of very helpful folks here who are way more competent and knowledgeable than all but a select few advisors out there.

Of course, a bunch of us are not and will also weigh in…

[reeshau]

Are you looking for them to manage your money, or to plan for you, then you execute it?

For just planning, this seems high.  But that may be Bay Area pricing, plus potentially your own complexities.  Did they quote it as a flat rate, or do they express it as a percent of assets?

I paid $1,200 for a full retirement plan before my son was born, in 2014.  That was in the Detroit area.  The planner was a member of the Garrett Planning Network.  He would do "refresh" sessions for $400, up to a few years after the initial plan.

[marcus_aurelius]

Why not do a case study here? I am willing to state with certainty that there are a number of very helpful folks here who are way more competent and knowledgeable than all but a select few advisors out there.

Of course, a bunch of us are not and will also weigh in…

Good idea, will give it a shot!

Are you looking for them to manage your money, or to plan for you, then you execute it?

For just planning, this seems high.  But that may be Bay Area pricing, plus potentially your own complexities.  Did they quote it as a flat rate, or do they express it as a percent of assets?

This is for them to plan it and me to execute it. They quoted it as a flat fee instead of a percent of assets, but I think the high fee took into consideration the overall complexity of my portfolio and situation.

[FLBiker]

I think that's reasonable.  I've been quoted anywhere from $3000-$10000 for a comprehensive plan, and we're a bit complicated because we have assets in both the US and Canada.  I've never done it, though, because I've yet to be convinced that they'd offer me anything beyond what I already know (or can find online).  I've also asked them for samples of the types of reports that they provide, and I've been underwhelmed.  For example, I was interested in getting a detailed drawdown plan, and I've yet to see anything that optimizes things as far as I'd like.  Thus, I'm still doing my own.  Similarly, I've been underwhelmed with the estate planning side of it -- from what I've seen, it doesn't offset any of the work (or expense) that a lawyer needs to do.

That being said, if you find someone that really excels at these elements (estate and drawdown planning) please let me know!

[AJDZee]

That's reasonable. I'm sure you could shop around and find cheaper, but not sure it's worth it. I recently had a plan done for $3600CAD.

I'd caution against asking this community for a 'plan', it could end up costing you much more than $6000.
From my experience the folks on here focus on the 'accumulation' strategy, but have little knowledge on withdraw strategies, for tax and estate planning.

[joemandadman189]

We tried out the Personal Capital financial advisors for about 8 months their fees were pretty standard, 0.89%, but they did .49% on 401ks. But their software looked at the most tax efficient way to use our nest eggs and how best to grow them over time. Even down to when to take social security to reduce tax burden. I am sure you can find all this online somewhere for free and build a spreadsheet to do it. their free calculator can do a lot of this planning as well.

I ended up stopping the service because i wasnt comfortable not "being in charge" of our assets and i didnt see additional value in their retirement planning methods. We basically ended up in in the same place with roughly the same Stash numbers and similar time to FIRE with different methods. Also they moved us more into bonds (10-20%)  then bonds had the worst year in like 100 years.

before that we look at getting a fee only financial plan and i think it was ~$3k but that was 6 years ago

[Sandi_k]

If you're a DIYer in investments, everything will sound outrageous. As a previous poster noted, this board is great for accumulation, but I would (and have) go to the Bogleheads forum for more sophisticated withdrawal and tax planning input.

If you really do want another set of eyes on it, they frequently recommend two software tools:

- Pralana (Gold, which is a little more expensive than the Bronze, but it's updated for SECURE 2.0 and the impending changes when the TCJR Act rebounds in 2026). It's apparently good with taxes and Roth conversions.

https://pralanaretirementcalculator.com/pralana-gold/

- The Retiree Portfolio Model, a crowd-sourced piece of software that is Excel-based.

https://www.bogleheads.org/wiki/Retiree_Portfolio_Model

The last thing I would note is there are two amalgamators of fee-based, hourly planners: The Garrett Planning Network, and the XY Planning Network.

https://www.garrettplanningnetwork.com/

https://www.xyplanningnetwork.com/consumer/

[ATtiny85]

Based on the case study, I see no reason to pay a dollar for a plan at this point. There are just a handful of moves needed to shore things up. The biggest thing still needed is for OP to share their thoughts on desired asset allocation.

https://forum.mrmoneymustache.com/case-studies/complex-case-study-robustify-my-portfolio!/

[MDM]

If you're a DIYer in investments, everything will sound outrageous. As a previous poster noted, this board is great for accumulation, but I would (and have) go to the Bogleheads forum for more sophisticated withdrawal and tax planning input.

What do you think of Using PlanVision - $189 per year for Financial Advising?

[chasesfish]

Very reasonable cost.

I have a FIREy friend that quit his first career and setup an RIA to fee based planning.  He charges $5,000/yr or $6,500/yr depending on if you want to include portfolio management. 

 

[Dee18]

I pay $150 an hour for a great advisor.  I initially provided him with all my information (accounts and their balances and allocations) as well as a clear timeline and set of goals.  He spent four hours preparing an initial plan, had a 90 minute meeting with me, mapped out some changes to the initial plan based on our discussion (billed as one hour), and met again for a 30 minute review of those changes.  Thus the initial plan total cost was $1050.  That was 4 years ago.  I now meet with him an hour or 90 minutes occasionally…about every 6 to 8 months.  He only charges based on one’s net worth if you have him handle everything.  That is also the practice in the city where my mother lives.  I might not have hired a financial advisor because I was comfortable with my choices on my own, but I met him in a free session provided my employer (when they announced the termination of the pension plan).  I thought he was great and I wanted someone available to advise my 20 something daughter if anything were to happen to me.

[Must_ache]

Are you proposing to deal with someone in SanFran?  I wonder if the cost would go down considerably if you "outsourced" to a city/state that has houses under a million dollars.  If you don't mind doing any meetings over the internet, that is.  In the end you would just be relaying a bunch of information back and forth, I don't see why it couldn't be done long-distance.

[marcus_aurelius]

I pay $150 an hour for a great advisor.  I initially provided him with all my information (accounts and their balances and allocations) as well as a clear timeline and set of goals.  He spent four hours preparing an initial plan, had a 90 minute meeting with me, mapped out some changes to the initial plan based on our discussion (billed as one hour), and met again for a 30 minute review of those changes.  Thus the initial plan total cost was $1050.  That was 4 years ago.  I now meet with him an hour or 90 minutes occasionally…about every 6 to 8 months.

I don't want the advisor to "handle anything", just give unbiased advice, so this might be just what I need. I PM'ed you if you can share your advisor's contact info.

Are you proposing to deal with someone in SanFran?  I wonder if the cost would go down considerably if you "outsourced" to a city/state that has houses under a million dollars.

I definitely don't mind working with anyone online even if they're on the other side of the country.

[evme]

OP @marcus_aurelius , I suppose it depends on what you are getting for the $5800. Did you ask for a sample of the kind of report she would present if you hire her?

If you are willing to put in the work yourself you can probably get all the info you need by posting on Bogleheads. They will have suggestions on rebalancing, sequence of withdrawl, tax minimization, etc, but weeding through the replies and figuring out what is optimal for your situation will be the toughest part. It's a matter of how much time you want to put into it and your overall financial literacy. It is always good to have an extra set of eyes look at a financial plan though.