Finance Dude-
First, let me say, I appreciate the fact that you provide insight and advice that comes from a different perspective, which is often quite helpful.
That being said, and honestly NOT trying to be haggy or anything - I just am curious regarding "fee-based" financial advising charges.
Let's start off by saying any professional deserves to be paid well if they are providing good/great service for their fees. For example, I don't mind paying our attorney his fee of $300 per hour
because he is worth every penny and we use his services sparingly.
To continue regarding FA fees, you stated:
"If that doesn't work, offer to pay for an hour consultation with a local CFP. You can find them through referral or at
www.fpa.net. They charge from $75-$250 an hour most areas. "
"The average net worth of my clients is $2-$4 million dollars. And although a number of them have money at Vanguard/Fidelity/Schwab, it's not 100% of their portfolio like it is for almost everrybody here."
and can't find the exact quote, but you posted YOUR rate schedule through your agency with I believe a minimum fee of .35% on assets over one million.
(I do understand you work for an agency and don't set the rates yourself)
Here is my question and point:
If I were one of your typical clients - having $3M in total assets (not including real estate), you would automatically charge me .35% per year ($10,500) for your services. If I have most of my assets in Vanguard, but need some help from you to make sure I am on the right page for SWR, diversification/risk, and tax implications - wouldn't I be (much) better off with another (capable) fee-based FA who charges me by the hour. Again, assuming I have a good idea what I am doing and I just need fine tuning? I just don't understand how you can be "fee-based" and yet charge me by a percentage of my net-worth. It doesn't sound congruent to me.
Also, if you advise only on a portion of someone's portfolio - do you just charge on that? Again, wouldn't you be better off (as a CLIENT) to pay hourly? Also, once the initial stuff is done - it should be pretty much set it and forget it, so again an hourly fee to come back once a year for a check up but not to pay $10,500 for that privilege/service?!?
I actually like your posts and that you tend to be so cool - headed, so please don't take this personally! Also, you really do seem to have your clients best interests at heart from what you say here. I just can't see giving ANYONE a % of my hard-earned stash. If you could explain why this is kosher, I would sincerely appreciate it.
Thanks!
Jane
(hoping you are taking this interragation ok - :
)