Dear Liz: You always advocate hiring a fee-only financial advisor. But where do you really find one? I found those who say they are fee-only are really “assets under management” advisors when you dig down deep, and the cheapest fee-only advisor I’ve found costs $6,000. I just want them to look over my financial plan and help craft a retirement investment portfolio.
Answer: The “assets under management” model — where the advisor charges 1% or so of your portfolio in exchange for financial advice — is probably the most common fee-only arrangement. But there are others. The Garrett Planning Network, for example, represents planners who charge by the hour. XY Planning Network and Alliance for Comprehensive Planners offer referrals to planners who charge retainer fees.
You also might consider talking to an accredited financial counselor. These fee-only, fiduciary professionals typically charge less than a comprehensive financial planner does and could be a good fit for those with simpler needs. You can get referrals from the Assn. for Financial Counseling & Planning Education.
Liz… fed only advisors by the hour is unsustainable in my opinion. I want an advisor that charges a reasonable rate by the hour. I cannot afford $300 or more an hour. These advisors typically wants you to pay upfront rather than deducting from a retirement account like Schwab does. I find Schwab’s intelligent portfolio to be more affordable.