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<p>I assure you that everything is legal and can pass any audit including IRS. </p>
<p>OP, could we talk about the fees from so called financial advisor in your thread? </p>
<p>are you asking if you can talk about the fees that your financial advisor charges you? go ahead.</p>
<p>Our financial advisor doesnât manage all our finances, just our Roth. He charges 0.75% of the total amount managed, and trades stock in the account often. He has a phenomenal long term rate of return, and I think heâs a bargain.</p>
<p>Our financial advisor (me) manages all of our finances. He charges 0.00% of the assets under management. He has a phenomenal long term rate of return, and I think heâs a bargain.</p>
<p>Based on what I am learning, you must have a boat load of $$ in your Roth for the low 0.75% fee. </p>
<p>As a private client of our bank, we pay a one time commission on everything we purchase in our investment accounts. The bank provides quite a list of services at no additional charge.</p>
<p>Recently, we have been invited to dinners by a different Financial groups. They are fee based and they charge 0.75 to 1.5% every year. That seems way too much. </p>
<p>On the other hand, if we have to move the $$ in and out of the market a couple times. The commission may add up too. </p>
<p>Does anyone have a list of pros and cons of these two type of fee structures? I know they need to get paid. But 1% a year, year after year is just too much.</p>
<p>âOur financial advisor (me) manages all of our finances. He charges 0.00% of the assets under management. He has a phenomenal long term rate of return, and I think heâs a bargainâ</p>
<p>Dito here. She charges a one-time flat fee in the amount of one pre-loved WOC - a tiny fraction of the assets under her watchful eye. She also has a trusted partner with a graduate degree in business. ;)</p>
<p>âBased on what I am learning, you must have a boat load of $$ in your Roth for the low 0.75% fee.â</p>
<p>Not really. Just about 330K. But we have only given him less than 20K, about 17 years ago. Approx 18% rate of return, for all 17 years. He never raises his commission, and he wonât take new clients, not even our son. He is amazing and I fear he will retire too soon.</p>
<p>Unfortunately the bulk of our money is in our 401Ks. Yeah, almost no fees on it, since itâs with Vanguard. But a FAR lower rate of return, so after time, the tiny 20k that we gave my husbands friend years ago, will surpass our maxing out our 401K for decades. Itâs all about rate of return, and I just canât seem to get even close to his.</p>
<p>I donât think Iâd invest money with someone unless they had a long, proven track record. Seems most of the time youâd be better off with just a good index fund. So many of these guys seem like theyâre just churning your account, they win, whether you win or lose.</p>
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Legal and ethical are 2 very different things. Donât know whatâs worse. The blatant financial manipulation or the bragging about it and throwing it in everyoneâs faces. </p>
<p>busdriver11: You get an 18% return year after year for 17 years? Thatâs almost too good to be true.</p>
<p>My husbandâs company had a financial advisor for us as part of the benefit package. When my husband quit, the advisor wanted us to stay on as clients for a flat fee of $10,000/year. He offers advice and does our taxes, but does not manage assets. Is that an outrageous rate? We thought so and declined.</p>
<p>@LBowie, it depends on how large your assets are. </p>
<p>But if all he is doing is the taxes it seems like I could easily find someone who would charge a tenth of that or less. And besides, he has given me stupid advice before, like he really had no clue about whether or not we should fill out the FAFSA and steered us wrong, though it did not hurt us either way.</p>
<p>10K/yr sounds high to me. </p>
<p>busdriver11: You get an 18% return year after year for 17 years? Thatâs almost too good to be true.</p>
<p>I agree. Amazing. Thatâs through dot.com bubble and 2008. Not to discredit this success, our ex FA bought Apple for about $50/share in 2003 which we left as is out of sheer inertia. So I could claim we had about 100% annual return for 11 years.</p>
<p>Fees are often charged based on the amount. From what I know, 1% up to a million is common or even on the low side. We used to have a FA who charged 2% and traded a lot. I hated it. So much bookkeeping to check the trades. The monthly statement was so thick that it felt like we were getting a new telephone book every month. I took it over a few years ago and life is much simpler.</p>
<p>$10,000 to manage assets of $1 million is 1% a year. If your assets are $2 million, itâs .5% a year, and so on and so on. And being charged a flat rate means that your advisor wonât âchurnâ your assets to create useless trades for which heâll get a commission. </p>
<p>Create a spreadsheet. Figure out what 10k compounds to after a decade of normal market returns. Go to Bogleheads.org and answer the question: âbut where are the customersâ yachts?â</p>
<p>Ps. I live in a town full of hedge fund managers, money managers, etc. Listening to them talk made me a Boglehead. </p>
<p>No, he is not charging based on amount of assets, and as I said, he is not even managing assets, just giving advice on which 401k funds to choose and allocation, etc. It is a flat, non-negotiable fee. But good point, @VeryHappyâ about it keeping conflict of interest out of it. And thanks for the tip on Bogleheads.org, @IxnayBob!</p>