How Much Does a Financial Advisor Cost? Is It Worth It?

Choosing a financial advisor is no small decision, and choosing the right financial advisor can be a life-changing step, and it should be a positive one. When you’re unsure, it’s much easier to put off the search year after year. You could have numerous reasons why you have delayed your hunt for a financial advisor. Perhaps you have a retirement account with your employer and no real outside investments. Maybe you’ve been pleased with the performance of stock positions you chose years ago and don’t want to touch a thing.

Questions come up that remain unanswered. One of which is: how much does a financial advisor cost? Or: aren’t wealth management services expensive? At some point, you have likely thought, “Do I have enough money to hire a finance pro?” Although all the considerations above are important, hiring a financial advisor isn’t as tough or expensive as you might think.

Different levels of advisory services

Certified Financial Advisors offer a wide range of services to address the needs of a variety of investors. Consider these real-life scenarios that require different types of financial advisory services:

• If you’re thirty-something and single, you probably do not need estate planning services. However, if you have a retirement account, restricted stock units (RSUs), and plan to buy a house within five years, a financial advisor can help you achieve that. You only pay for the services you need.
• Two people planning on getting married or living together with combined incomes should consult a financial advisor. Even the most well-intentioned couples can’t see into the future. However, a financial advisor will help you two prepare for the unexpected. Make a financial plan with a third party upfront and avoid disagreements later. No surprises!
• You’ve been working in your field for over twenty-five years, and retirement is beginning to peek over the horizon. Up until now, you have been very careful about saving and retirement planning. You owe very little debt, and you own a home. Now is the time to think about what you need to live on once you retire, and how your funds will be distributed. Experienced finance professionals help simplify decision making for people like you every day.
• Years of hard work and good timing have resulted in strong financial results for you. You have disposable income that you want to use for investment capital but aren’t entirely sure how much to invest. Some decisions are ambiguous. For example, should you purchase shares of the retail or advisory class of a mutual fund?  Think about how to tie all your assets together in a way that will balance risk. How much does a financial advisor cost? Not much if they can help you to preserve and generate wealth.

Experienced financial advisors can help you to find the most tax-friendly way of making new investment decisions. Also, remember that having your tax accountant and financial advisor working together can have a tremendous impact on what deductions get applied. At a firm like SD Mayer, your tax accountant and financial advisor are one in the same, meaning that your tax planning and financial planning are part of an integrated plan.

How do fees get charged?

So, to the question, how much does a financial advisor cost? There are two classes of financial advisor fee structures: fee-only or commissioned. Choosing a fee-only advisor is ideal. Why? Fee-based financial planner sales structures are usually very straightforward. Some financial planners charge by the hour. Whether or not you add to your mutual fund or buy new stock shares, you pay the same amount. Wealth managers charge a monthly or quarterly consulting fee of 0.9% - 1.5% of the market value of your portfolio.

Financial planners who are paid on commissions can’t demonstrate the same level of independence as easily. Essentially, they base their main source of profits on the number of trades they make on investments they sell you. Commissions-based businesses are also tied more closely to quarterly sales targets and cycles.

Where to begin my search?

It’s never too soon to start looking for a financial advisor. So, how much does a financial advisor cost? You should never get charged for an initial consultation. A good financial advisor expects you to take the time you need to decide whether they are the right fit.  And the cost is minimal when compared to doing nothing.

SD Mayer explains what your options are and what they will mean to you down the road. They are available to answer any of your questions, happily! Decades of wealth management experience in the San Francisco Bay Area and beyond will help you feel confident that utilizing a financial advisor will ultimately help you see greater returns on your investments and set you off on a solid financial path.

SD Mayer’s team of wealth managers work with every kind of investor, so whether you are just getting started or are highly experienced, we can work with you where you’re at to achieve whatever financial goals you may have. Contact us today to get started with an initial consultation.

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