You might want some advice on saving for a down payment, investing for your child’s college education, or saving for your retirement unless you are a financial expert with time to dedicate to handling your money and assets. A financial advisor can be helpful in this situation. However, finding the ideal advisor for your needs can be challenging. There are roughly 200,000+ options available.
There is a wide range in their certifications, fees, minimums, & services, and not all of them work as fiduciaries—that is, they prioritize the needs of their clients over their own. Understanding your options and, most importantly, your goals before you work with a financial advisor in Katy, TX, is helpful.
How do they work?
There are several ways to pay fee-only advisors, each with pros and cons. Even though annual fees are popular and only require a little upfront, an hourly rate might be less expensive if your needs are simple. “With one of these alternate payment plans, I think it is fair to say that almost anybody can get professional financial advice,” Rostad stated.
- Annual percentage of your assets
Payment is the most widely used method as a proportion of assets under management. Annual fees are usually in the range of 1%. The majority of these fee-only advisors, though not all of them, typically demand a minimum of assets between $250,000 and several million dollars. For instance, a $400,000 asset investor would pay about $4,000 annually, which would be taken out of their account balance every quarter. Creating a financial plan, which typically costs several thousand dollars, may also be billed separately to them.
- Hourly charges and other options
Some fee-only advisors bill by the project, hourly rates, flat fees, or monthly subscriptions. Representatives of the Garrett Planning Network typically charge several hundred dollars per hour. Facet Wealth advisors charge an annual flat rate based on the complexity of a client’s financial situation. They only communicate with clients virtually. XY Planning Network fee-for-service advisors offer a customizable payment plan that can be paid as a percentage of AUM, a flat fee, a retainer, or an hourly rate.
- Robo advisors
An automated digital advisor service is an additional, less expensive choice for investors. The annual fee for these allegedly robo-advisors is typically relatively low—approximately 0.25% of whatever assets you invest—but it can be nearly twice as high if they provide access to human advisors. While Schwab’s Intelligent Portfolios Premium, which gives users access to human advisors, takes a $30 monthly subscription fee after an initial $300 payment, some robos, like Fidelity Go, have flat fees.