We have taught our boys to shop around for the best Financial Planner that they like. We have told them to do research on different Financial Planners from what they charge and more. We want them to feel good about who they work with and are able to talk with them comfortably. If they do choose one to work with, we prefer Free of course or if they do pay, then to pay a fixed cost.
I have talked to people that pay a percentage of their holding to a Financial Planner. Some paid from around $5,000 to $20,000 a year. Ouch. Six years ago, when we had someone want to be our Financial Planner it would have cost us over $6,000 a year. Think if we paid that each year for twenty years for a total of $120,000. Would we have maid more than if we did it ourselves or not.
As always, I am not giving you any Financial Advice and you should seek advice from your Professional Advisors to see what is best for your situation. See my Disclaimer at MillsWay.com. This is for entertainment only.
Basically, there are four fees the boys could pay for a financial planner or advisor;
- Free – I like this option the best.
- Flat Fee – Could range from $500 to $3,500.
- Percentage of your Portfolio – For them to manage your investments monthly. Charges could range from .80% to 2% of your money they are managing for you.
- Hourly Fee – This isn’t a bad option if you just want to see them once or twice to help you with advice. They could also help you create a financial plan. Cost could run $75 to $400 an hour.
Of the four above options I still like the Free option with our current situation. Maybe for the boys one of the other options will work better for them. I know they could benefit from working with a Certified Financial Planner and if it is in their budget it could be a good investment.
Finding a Certified Financial Planner that you may like to work with can be more of a challenge. At least if they are Certified Financial Planner then you know they took the classes and received the training to provide good advice.
For us we just didn’t always like the ones we have worked with. Maybe we are extra picky. But we know what we want and just haven’t had the feeling that the people we have worked with had our best interest.
Questions to Ask
I like to work with Financial Planners or Advisors that can relate to our situation, our ages, our wants and more. For instance, if we are looking at buying Investment Real Estate then we don’t want to work with a Real Estate Agent that has never bought any Investment Properties or who doesn’t currently own some Investment Properties. Some questions we taught the boys to ask a Financial Planner or Advisor is the following.
- How would you Invest our Money?
- How often would you make adjustments?
- How would you communicate with us?
- How much do you have in Investments?
- How your other clients have done when working with you?
- What is your Investment philosophy or strategy?
- How many clients do you work with?
- What do you get paid for your service? What will it cost us?
- Do you push your company items or what is best for us?
- How would you track our success?
- What reports would we get and how often?
- What percentage of withdraw do they recommend at retirement?
- How much in Assets do they recommend in Assets to retire on?
- Why should we work with you?
If the boys do decide to work with a Financial Planner or Advisor hopefully, they will do their research on each one and interview different ones before going with one.
We also have taught the boys that it is OK to change Financial Planners if they aren’t happy with them or the results. They aren’t locked in for life with them. In our early years we had hired different Financial Planners and the longest we stayed with one was about three years.
Even though we like to meet with our Financial Planner at least once a year, maybe the boys will need more or less service from a Financial Planner. If they don’t know for sure if they need a Financial Planner or not then here are some possible reasons to work with one;
- They want a second opinion about their current Financial Plan.
- They need help creating a Financial Plan.
- They are just plan lost and need help with Investing.
- They don’t have the time to manage their own Investing and Financial Plan.
- They are married and it is good to have a third person involved in the Financial Planning that is not involved in the relationship.
If they do decide to work with a Financial Planner and they decide to pay for the services then we hope they try to pay no more than 1.3% and that the rate goes down as their assets under the Financial Planner goes up.
If they don’t have a lot of money yet saved up, we hope they will go with the Free option and use the Free tools at the Big Brokerage houses to find Funds to invest in. Maybe after they have over $250,000 in Assets they could look at possibly paying for a Financial Planner.
We do encourage them to continually learn about Financial Planning and Investing their whole lives and take active roles in managing their money so they are in charge and in control.
I know a lot of people pay for Financial Planners or Advisors fees and that is fine for them. Everyone has different situations. I suggested to Darlene that if I would die that she should go under their Managed Asset Program which is around 1% of the assets under management.
My Dad currently works closely with his Financial planner. I don’t know if he pays for the service or not. I would guess he does and pays a percentage of the assets under management. He seems to talk to his Financial Planner monthly, but yet he is retired and needs to watch things even closer than Darlene and myself currently needs to.
Hiring a financial advisor may be costly, but for some, it can be a worthwhile investment. Whether you feel lost in your finances, you want a second opinion, or you just don’t like dealing with your money on your own, try a financial advisor. We do tell the boys they should have a Financial Planner as a part of their Financial Team and meet with them at least once a year.
Here are some positive quotes I like;
“Get your Money to Work for You… As hard as You Work for it.” By Napoleon Hill
“1. Make Money. 2. Use the Money to Make More Money. 3. Repeat the Process.” By Warren Buffett
“There is no way to happiness; happiness is the Path.” By Buddha
“Change Your Thoughts – Change Your Life” by Wayne W. Dyer
Let me know your thoughts about this blog and let me know of others you would like me to do in the future. I feel we can all learn from each other. That is why I am in the helping people retire early, enjoy life more and be more successful. Also, please see my Disclaimer page.
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