Is a financial adviser ever *not* worth it?

[fortnightlily]

I consider my financial know-how to be decent. We're already checking several boxes: maximizing retirement contributions, contributing to a 529 for college savings, putting savings in high-yield accounts and CDs. I don't think I want to pay someone to actively manage our investments. But I've never consulted an expert and I would like to know if we're in good shape for retirement or even for me to retire early (DH and I have a large age gap, I'd like to retire or semi-retire when he does). 

I'm already paying a few thousand this year to update our will, trust, and health directive paperwork, so I'm wondering if paying a financial advisor would be really worth the presumed additional few grand I'd pay? Or am I gonna feel like I just spent a lot of money to be told "you're in good shape, here's a few ways you could tinker around the edges", y'know?

Has everyone who used a financial advisor felt it was worth it (assuming you liked them)? Has anyone used one and felt like they didn't tell them much they didn't already know?

[minzy]

Well we have never used one and don’t feel we’re suffering for it. However, my husband is very savvy with finances/investing, and a high earner, and I’ve…. been riding his coattails and reading these boards since 2005. 🤪 I am certain firms would love us as clients but we’re not interested in them chipping off part of what we have to tell us we’re doing great. I don’t think there would be harm in a consult per se but I don’t know that what we’d get back for the money would truly be value-added. But I guess I don’t know what I don’t know, so I am of no help! 🤣

If you have specific questions now about the math, though, maybe it is worth it to check in, and if you clean all the legal and financial stuff off your plate in one year, it will probably feel great! You may also be able to get a free partial look by someone. For instance, we spoke with someone at Fidelity when we started moving into Environment, Sustainability, and Governance (ESG) Funds and we didn’t pay for that little chitchat.

[minzy]

You could also get specific and poll the board for suggestions. (Who remembers the Big Dog chats and MM201?)

[wildrice]

We met with a free one last year through my work. I didn't find it that helpful. She had a couple of suggestions, but they weren't anything that I wasn't already aware of. She also suggested saving my retirement contributions post tax (I have the option to do a Roth 403b at work) but I actually decided against that since I think our tax burden will be less in retirement than it is now so I'd rather be taxed then. She also said something about setting goals like owning a second home which does not interest us AT ALL so it didn't seem like we were really on the same page.

Not sure if this post is even helpful since it sounds like we're in different financial positions and a paid advisor might be a little different! But I do feel like unless I wanted to get into the nitty gritty of investing, I am pretty financially savvy otherwise and although I don't always make the recommended moves, I am at least aware of them and have made choices about why we don't do certain things.

[bee20]

I sometimes think of getting a financial advisor to talk through some specific things-my overall fund allocations, my tax strategy, and a double check of my financial projections for retirement. And then I start researching advisors and realize by the time I find one I would want to work with, get on their calendar, get all my information together, review, ponder their advice...I may as well just research some more myself.

Like wildrice, I did try a free one through work, he just said I was doing great and didn't really need help. Thanks I guess.

[shaynaatl]

I think it would be fine to use an hourly financial planner to do a general review of your finances. Even if they don't tell you anything revolutionary, it would be piece of mind. The one potential issue is that fee-only planners are harder find than % of asset planners.

[fortnightlily]

Thanks, yeah, I met with a free one through work and didn't find it very helpful, but I also felt constrained by how much I could leverage them since it was free.

[ohgillian]

This board has heard me say before that I’m a big fan of Vanguard Personal Advisor services. I think the fee is 0.3% of managed assets.

I find it worthwhile to have someone “in it“ with me. We meet several times a year and topics include:

Tax planning

Where to take funds for major purchases (eg vacation house)

Asset allocation across both my vanguard $ and my non-Vanguard $ (eg she advises on what to invest my work 401k in so that it fits with our overall investment strategy)

Check-in on the assumptions that underly our long term goals, and review progress on those goals

Other general financial maintenance, like making sure I set up beneficiaries in my accounts when I changed jobs.


I could do all of this alone/myself, but frankly I don’t want to. There’s also value for me in the peace of mind of knowing someone else agrees with me that we are in track.

[aprilsails]

We have used one for more than a decade and really like working with him but that comes with a few caveats:

1. He is free to us. His services are part of a package deal my FIL has with the investment group and so long as FIL’s holdings remain above $X it remains free. As FIL draws down his investments in retirement we will have to pay. I anticipate that happening in the next five years.

2. Neither DH or I are extraordinarily knowledgeable in this area. We have high incomes. We are smart people and I can do our taxes. I hang out here and he follows personal finance boards on Reddit but neither of us are very inclined to take charge of this ourselves. We would have to spend much more time researching.

3. We’re in Canada. The advice I see here isn’t necessarily applicable to our financial market and the savings programs available are quite different.

4. Since he has been working with us for years he has a very holistic approach. He also keeps track of our insurance policies for STD, LTD, house, car and life and makes suggestions on what we should be changing as our needs change. He tracks our investments through our employers as well, and makes suggestions on where we should invest based on their portfolios.

We feel a bit like slackers about it all but I don’t mind taking advantage at this point. We’ve discussed what we should do once our free ride is over but I expect we will carry on. I think that’s the whole point of this program. It’s too easy and we’re already in it and have made some big gains.

[winemaker06]

Apr 19, 2023 9:30:25 GMT -5 ohgillian said:

This board has heard me say before that I’m a big fan of Vanguard Personal Advisor services. I think the fee is 0.3% of managed assets.

This is so timely for me because Vanguard recently reached out. I wasn’t sure if an initial consult cost anything, or if I could do something short-term. Gathering all the information just to talk with them seems daunting also!

[ohgillian]

Apr 24, 2023 17:49:43 GMT -5 winemaker06 said:

Apr 19, 2023 9:30:25 GMT -5 ohgillian said:

This board has heard me say before that I’m a big fan of Vanguard Personal Advisor services. I think the fee is 0.3% of managed assets.

This is so timely for me because Vanguard recently reached out. I wasn’t sure if an initial consult cost anything, or if I could do something short-term. Gathering all the information just to talk with them seems daunting also!

I'm happy to answer any questions I can. They aren't perfect -- my biggest frustration is that I've been there since 2016 and I just got assigned my 3rd advisor. I was with the first quite awhile and then she got promoted to management; we were only with the 2nd for maybe 2(?) years and now have a third. So that's a con, but on the whole I'm happy. Feel free to PM me if you prefer.

[winemaker06]

Apr 24, 2023 19:54:02 GMT -5 ohgillian said:

Apr 24, 2023 17:49:43 GMT -5 winemaker06 said:

This is so timely for me because Vanguard recently reached out. I wasn’t sure if an initial consult cost anything, or if I could do something short-term. Gathering all the information just to talk with them seems daunting also!

I'm happy to answer any questions I can. They aren't perfect -- my biggest frustration is that I've been there since 2016 and I just got assigned my 3rd advisor. I was with the first quite awhile and then she got promoted to management; we were only with the 2nd for maybe 2(?) years and now have a third. So that's a con, but on the whole I'm happy. Feel free to PM me if you prefer.

Well my comparison is a life insurance salesman who gave us some advice under the guise of financial planning, but then found many ways to tell me during our consults that I shouldn’t be investing on my own because he wanted our commission. That was years ago, but my bar is low!

[aspentosh]

I've been wondering this. We pay a percentage to have our advisor keep an eye on things, but honestly I wonder if we'd be better off saving that percentage and just doing target date funds. I love that we can do sustainable investing (stays away from oil, guns, etc) but other than that, it seems so expensive.

[vmars]

We just started last year and it is worth it for us. I would say if you don’t have a lot of assets it may not be totally necessary. We had just sold our house so we had some money to work with. However, the planner we hired through Ameriprise has been phenomenal to work with.

They literally organized all my finances beyond just bank accounts. They got us set up with disability insurance, life insurance, rolled over a bunch of our accounts so they are all with Ameriprise, opened IRAs for us, etc. They give us specific things to check off like doing all of our estate planning (ours is free through our employer), looked over everything when we applied for our HELOC and will be giving us strategies to pay it down. They take so much of the guess work out of our finances and keep us on track with our financial goals. The fee is about $100/month and we make way more on our investments so it is more than worth it for our family.