Finding a new financial advisor

[TheWizard]

Not sure I follow you there. I think you are saying the AUM fee is increasing primarily due to the market and not because of the advisors input.

Not really.
At age 76, I have a negative withdrawal rate from my portfolio, call it zero if you want. (Pension/annuity + SS are more than sufficient.)

So if I hired an FA to manage my portfolio (h*** forbid), the 4%/1% thing would make no sense.

Instead, I would say something like: if I had self invested in VOO for 2025, I would have an 18% total return for the year. But my FA delivered a 22% return for the year so his 1% fee was worth it.

Or.......but my FA only delivered a 15% return for 2025 so I'm dumping him ASAP...

 

[target2019]

In the 1% fee over 4% calculation, the lesson is that 4% is the average real return for the average investor.

The investor should become familiar with benchmarking too.

Also check your fund lineup for even more excessive fees.

 

[yakers]

I had a 1% FA 35 years ago and it helped as it started my portfolio and helped with taxes, investments and insurance coverage. Soon didn't need them and went on to Vanguard.
Recently I returned to a sort of FA, I moved a bunch of assets to Schwab and have a free advisor. I still manage my accounts, I did this so someone can assist my DW when I am not around. No need to do much, just make sure she takes RMDs and transfer cash as necessary. The FA made up a whole anallysis for me and I didn't use the advice except it did point to reducing my AA risk which I will be doing my way through RMDs and dividend reinvestments.