Question for those with financial advisors

[SnowballCamper]

We have 10-brokerage accounts under mgmt with JPMorgan...3 taxable and 7-IRAs (trad and Roth for my wife and myself and my wife's 3-inherited IRAs). We've labeled our taxable accounts as 'Primary', Nursing Home' and Muni Bond Ladder (my wife wanted a separate fund for a future nursing home stay...she's more comfortable with that).
The 'Primary' account has zero fees and the others have variable fees.

Our NW in January, less the primary account, was ~ $6,511000. The total fees charged that month for those accounts were $2877.00 or .044%. Total income generated by those accounts that month was $10,801. No complaints here.

Thank you for sharing this detail. I'm not trying to nit-pick you, but the industry fee structure in general... So did you pay $2,877/10,801=26% of the gains to your advisor, or $2,877/(10,801+2,877)=21% of the gains to your advisor? (yes, it's a rhetorical question)

I appreciate that you have a complex mix of accounts, but $6.5M in 30 year treasury bonds at today's yield of 4.88% earns 0.0488/12*$6.5M=$26,433 per month. My portfolio of large cap, small cap, international, and govt bond index funds did 2.5% in January (for comparison thats $13,541 on $6.5M). The fund fees are about 0.034% per year, so thats about $184 for the month (again using the $6.5M asset size, much larger than mine).

Yes there can be other benefits for advisor services, but for me it is foolish thinking to pay AUM fees on an ongoing basis for investment management.

 

[rk911]

When we made the decision to hire a money manager we selected and interviewed managers at three firms and talked about our three overriding principles...

- Consolidation of Assets
- Simplification of Assets
- Preservation of Assets

Prior to hiring JPM our principle was KISS. At least that's what we started doing. But over the years we added accounts in various banks and brokerages (AmCentury, Fido, Vanguard, Mairs & Power to name a few) spread far and wide, taxable and tax defered accounts in those same brokerages and banks. Our IRAs and 457 accounts were held by different custodians. It was a lot to keep track of and we planned to do a lot of traveling in our RV after retirement.

We were investing in mutual funds and bank CDs nearly exclusively. After hiring JPM we added ETFs and muni bonds. Could we have done that on our own? Very likely but having a manager do it frees up time for other things. KISS.

Primary above all was/is preserving what we have. As I mentioned in a different thread we do not make routine withdrawls from our accounts. We do take RMDs from our T-IRAs but 100% go to charity via QCD. We took withdrawls for vehicle purchases in 2023 and 2025 and occasionally for home remodeling projects, to fund our DAF and for end-of-year cash gifts.

Color us happy and satisfied. YMMV.

 

[rk911]

Thank you for sharing this detail. I'm not trying to nit-pick you, but the industry fee structure in general... So did you pay $2,877/10,801=26% of the gains to your advisor, or $2,877/(10,801+2,877)=21% of the gains to your advisor? (yes, it's a rhetorical question)

No apologies needed.

JPM's fees are based on the account balance at the end of the month. But the fee is smaller for the 100% the muni bond account (100% buy and hold to maturity) compared to the well diversified 'Nursing Home Fund' (ETFs, mutual funds). The better we do the larger the fee and vice-versa. We do not believe in putting all our eggs in one basket but respect other's opinions on that.

The "income generated" I referred to earlier is cash from the sale of shares, bonds, dividends not re-invested and earned interest. That number changes month-to-month but the total monthly income is always larger than the total monthly fees. In calendar 2025 our accounts generated $304,000 in income against just over $32,000 in fees. Some of that income hit our pockets for purchases I previously mentioned but a lot of it was used to purchase shares in existing or new mutual funds and ETFs, send cash to our DAF, purchase muni bonds or CDs. We have on occasion tax-loss harvested a losing fund and donated the proceeds to our DAF.

This works for us but we recognize and respect other strategies.

 

[YellowSubmarine]

Since September 2025 I employed the pro management services of FIDO to manage 10% of my entire portfolio. I elected the covered call option approach since it is beyond my personal skill set. They charge 1.0%/year. I am up 9% for the full tenure with 18 weeks to the one year anniversary.

 

[RetiredHappy]

Since September 2025 I employed the pro management services of FIDO to manage 10% of my entire portfolio. I elected the covered call option approach since it is beyond my personal skill set. They charge 1.0%/year. I am up 9% for the full tenure with 18 weeks to the one year anniversary.

I just looked at my portfolio, it went up 12% between Sep 1 2025 to April 20 2026. Buy and hold appears to do better than what they are doing.

 

[Car-Guy]

I have a free FA at Schwab. I rarely use him except for "how to do things type questions". I handle my own investment planning and strategy.

 

[YellowSubmarine]

I just looked at my portfolio, it went up 12% between Sep 1 2025 to April 20 2026. Buy and hold appears to do better than what they are doing.

Interesting...I can not compare my diversified portfolio readily as 46% is fixed income and 36% are personally managed equities (plus 10% pro managed). Further, I include expenses in my performance or NAV; hence my personally managed portfolio is up 4.2%. Each aspect of my portfolio serves a special function. Currently , I'm on the fence for the pro results and continuing the relationship. When I signed on, they claimed 16% per year can be expected with a cap of 21% or so due to the option writing. Looks like my annual return is 13.76% pro rated at this moment -that's decent but not great. I'd likely stay on board if this pans out.

 

[RetiredHappy]

Interesting...I can not compare my diversified portfolio readily as 46% is fixed income and 36% are personally managed equities (plus 10% pro managed). Further, I include expenses in my performance or NAV; hence my personally managed portfolio is up 4.2%. Each aspect of my portfolio serves a special function. Currently , I'm on the fence for the pro results and continuing the relationship. When I signed on, they claimed 16% per year can be expected with a cap of 21% or so due to the option writing. Looks like my annual return is 13.76% pro rated at this moment -that's decent but not great. I'd likely stay on board if this pans out.

My 1 year return is 36.62%. But alot has to do with timing, I think last year had a drop before April due to tariffs. My 3-year return is 18.71% per year. We also withdraw between $150K to $200K a year from our portfolio.

 

[G-Money]

We interviewed several Certified Financial Planners (CFPs). CFP is a designation and they have a fiduciary responsibility to you and are different from "financial advisors" who may work on behalf of your custodian or brokerage.

We scheduled consultations and listened to their offerings and examined their fee schedules. 0.9-1% AUM (assets under management) up to the first $1M is fairly typical to start. You can find lower percentages the more you have them manage.

An important piece was "fit" with us and the advisor. We talked to some advisors who were early in their careers and who had personalities that we definitely felt weren't a good fit for us. "Fit" includes very subjective criteria, so this is where you insert your own criteria. We wanted someone who we felt had the necessary portfolio management experience and whom could bring the high level of analysis and detail we needed to the table.

Similar to some criteria outlined above, we wanted asset consolidation, asset management/simplification, and planning. We wanted to challenge our own planning and assumptions, i.e. can we retire on our projected timeline: Show us the data we probably don't already know. I do analysis for a living; I wanted someone who can run faster than me at my own game.

TBH I had no expectation that there would be access to super-secret investment strategy which would outperform the market. I'm not in the least bit surprised that our "model" investment strategy ended up diversified in index funds and ETF's of varying sizes and categories, foreign and domestic, with an allocation reflecting our risk tolerance. It's not rocket science but having a CFP to stay on top of it and keep us investing and adjusting our mix has been a good thing.

The bigger value provided by our CFP has been connecting us to resources to do an insurance/risk analysis of our existing policies, estate planning (wills, POAs, understanding trusts) etc. We had not done estate planning but just completed that last week in our first year with our CFP.

Other than our performance check-ins and meetings focused on specific agenda items (insurance, estate planning) we have someone we can call to help us model around life events. What if we want to consider buying a home in our retirement destination while we're still working. What if one of us needs to stop working earlier than anticipated. Bonuses percentages are known and we'll have $xx to invest or put towards our next milestone - how should we slice it? For that, our CFP has been excellent, would recommend!

 

[Koolau]

Hourly-fee-only advisors are hard to find but that's the only FA I would ever consider. IF you can find one to help you set things up, that's about all you should need IMO.

PERSONAL OPINION ALERT: If you haven't figured out yet, most here don't think paying for an advisor is the best use of your funds nor do most of us consider investing all that complicated or time consuming. I favor the "couch potato" approach to investing. 1) Choose one of the Big Three (Fidelity, Schwab, or Vanguard) 2) Use 2 to 5 of their mutual funds - avoid individual stocks or bonds 3) Spend no more than 4% per year of your stash (adjusted for inflation) 4) Ask questions here 5) Enjoy your retirement. *

*Not professional advice. Just a guy on the internet so do your homework and make your own decisions.

Please consider introducing yourself here: Hi, I am...

 

[Koolau]

Oh, and consider running FIRECalc:

FIRECalc: A different kind of retirement calculator

www.firecalc.com

 

[target2019]

Everyone commenting should understand what Total Portfolio Return is, and isn't.

TPR is not an arbitrary percentage. It's not simply "how much I'm up."

Your AUM fee is measured against the TPM. The spreadsheet calculation XIRR is the required knowledge.

 

[Jerry1]

Everyone commenting should understand what Total Portfolio Return is, and isn't.

TPR is not an arbitrary percentage. It's not simply "how much I'm up."

Your AUM fee is measured against the TPM. The spreadsheet calculation XIRR is the required knowledge.

So what are you saying? Are we under or over valuing the fee? I understand TPR and the fee is a drag on that so in order for the fee to make sense, the advisor has to do better than you can do on your own. If that’s not what you’re getting at, please explain what XIRR does or highlights differently.

 

[YellowSubmarine]

My 1 year return is 36.62%. But alot has to do with timing, I think last year had a drop before April due to tariffs. My 3-year return is 18.71% per year. We also withdraw between $150K to $200K a year from our portfolio.

Your returns are quite impressive, the change in my NAV over the years:
x =11.55% /N=36 years
Retirement only: x=7.22%/ N=15 years
The 7.22% is what motivated me to consider the Professional manager for a portion; and see how they do.

 

[VanWinkle]

Ask if you can pay by check instead of Assets under management and then
prepare to be shocked by the number. It will at least keep your investment money compounding for you instead of leaving the account for your advisor's
account. I would find an hourly advisor instead and get the advice without the depletion of funds from your investment account.

 

[VanWinkle]

Your returns are quite impressive, the change in my NAV over the years:
x =11.55% /N=36 years
Retirement only: x=7.22%/ N=15 years
The 7.22% is what motivated me to consider the Professional manager for a portion; and see how they do.

Higher returns = higher risk, no way to get around that. The only way an advisor can get you higher than market returns is through higher risk. If that suits you, then an advisor is the right choice even if you could do the same risk adjustment yourself.

 

[EastWest Gal]

The education about asset allocation and the various risks and returns, plus learning not to be afraid of a downturn in the market, makes a FA advisor worth it when starting out in investing. It was especially valuable before the internet. I did not have the time to learn much about investing while working 60 hours a week and raising a family, and my husband is still not that interested in it. Using FIRECalc, this forum, and reading, I've become increasingly educated about investing.

In retirement, all I'm doing is selling off small chunks of the taxable portfolio for living expenses and major purchases. There is no need for a FA. We are a few years from RMDs, so the IRA and Roth IRA are reinvested. It's a matter of rebalancing periodically, which I do by what I sell for living expenses. I can do all transactions online through Schwab. I do need to fill out and sign paperwork to gift assets to our son, but that too is scanned and uploaded into a secure message box at Schwab, and they take care of it.

I spend little time working on investments and money. Every 1-2 months I sell some ETF shares and transfer the cash into our checking account. DH takes care of most of the bill paying

And truthfully, it is powerful and freeing to be fully in control of our money. The internet has made it possible to be a DIYer.

 

[YellowSubmarine]

Higher returns = higher risk, no way to get around that. The only way an advisor can get you higher than market returns is through higher risk. If that suits you, then an advisor is the right choice even if you could do the same risk adjustment yourself.

So true, that's why I set the minimum 10% of NAV for the pro management. I figure they must stay above my 15 year average or no consideration given, I will move on. The risk has been assigned to them, and they must perform. I do expect them to perform above my portfolio that has 46% individual bonds and loaded with 36% equity funds with strong income biased.

 

[RetiredHappy]

So true, that's why I set the minimum 10% of NAV for the pro management. I figure they must stay above my 15 year average or no consideration given, I will move on. The risk has been assigned to them, and they must perform. I do expect them to perform above my portfolio that has 46% individual bonds and loaded with 36% equity funds with strong income biased.

Nothing is guaranteed. It is easy to have high returns in a bull run for buy and hold investors like me. Using call options, technically they should continue to make money for you in a bear market.

 

[SecretlyFI]

Keep in mind that when someone else is managing your investments, you have potentially 3 higher costs: the AUM fee, a sales commission on what they buy for you and higher expense ratios on what they buy for you, versus what you would have chosen. And you pay all 3 whether the market is up or down.

 

[G-Money]

Having a CFP avoids the commission and selecting funds which would otherwise benefit him instead of us. We're not tied to any brokerage or custodian, and everything he selects is low/lower-fee expense. I actually look.

Can't get around AUM unless you find a CFP who charges hourly. The ones we found didn't provide the kind of level of strategy we were looking for.

CFP's aren't forever and I intend to compare what we're earning with him versus what I could do myself on my own. If the AUM fee isn't providing value, he's gone. Simple as that.

 

[Lorenzo]

Higher returns = higher risk, no way to get around that. The only way an advisor can get you higher than market returns is through higher risk. If that suits you, then an advisor is the right choice even if you could do the same risk adjustment yourself.

True in general, but it assumes the investor has a good grasp of risk and how it is measured. I'm trying to get my head aroud Sharpe ratios and other measures of risk/return that might help me decide whether there are investments of a type I'm unfamiliar with that might have a surprisingly (to me) better risk/return ratio than my present investments. I read the threads here on things like CEFs and alternative investments, but I could also see consulting a FA who is familiar with those products. I had a FA at one time, but he apparently believed those sort of products were not suitable--or not suitable for me.

 

[Lorenzo]

Keep in mind that when someone else is managing your investments, you have potentially 3 higher costs: the AUM fee, a sales commission on what they buy for you and higher expense ratios on what they buy for you, versus what you would have chosen. And you pay all 3 whether the market is up or down.

My former FA made clear in his contract that the AUM fee was the only way he made money from work he did for me. He received no commissions, and he preferred low-expense funds. Some FAs work the opposite way: no fee, and all commission. There may be some who receive some of both.

 

[milog9197]

Thanks everyone for the thoughtful responses.

Some of you have asked why I want to hire a financial advisor and delegate planning and investing. Here they are:

1. I don't mind losing out on amazing returns and paying a fee in order to ensure I don't run out of money in retirement. My kids are all doing well in their own right, so I don't need to maximize their inheritance. I also have longevity in my family--multiple grandparents lived to 90s/100s!
2. I have no idea how to navigate estate planning, RMDs, tax strategies etc and frankly none of it interests me.
3. I want someone watching my investments and keeping up with best practices.
4. I want my family taken care of if my health goes.

Mostly I posted because I want to make sure I don't get scammed. My main question--is there some kind of website or place I can go to compare total fees of all advisors? I heard some annuities (commission/fees in all) can charge as much as 3%. I've also heard some advisors can charge 2%, while some charge 0.5%. I only want to interview advisors after I've narrowed the field to reputable advisors with low fees. Has any one else tried to do this?

 

[YellowSubmarine]

Thanks everyone for the thoughtful responses.

Some of you have asked why I want to hire a financial advisor and delegate planning and investing. Here they are:

1. I don't mind losing out on amazing returns and paying a fee in order to ensure I don't run out of money in retirement. My kids are all doing well in their own right, so I don't need to maximize their inheritance. I also have longevity in my family--multiple grandparents lived to 90s/100s!
2. I have no idea how to navigate estate planning, RMDs, tax strategies etc and frankly none of it interests me.
3. I want someone watching my investments and keeping up with best practices.
4. I want my family taken care of if my health goes.

Mostly I posted because I want to make sure I don't get scammed. My main question--is there some kind of website or place I can go to compare total fees of all advisors? I heard some annuities (commission/fees in all) can charge as much as 3%. I've also heard some advisors can charge 2%, while some charge 0.5%. I only want to interview advisors after I've narrowed the field to reputable advisors with low fees. Has any one else tried to do this?

Fidelity charges 1% and you are assigned a small army for support. This is in addition to your assigned Financial Advisor. I view the 1% as a "typical" fee that many managed funds will charge, e.g. CEFs. and many global funds. Pay Peter or pay Paul imho.