Do you really need a professional financial advisor?

It depends on how much you invest and how complicated your portfolio is. If you are an average person who has a 401(k) and maybe buys and sells a few stocks on the side, it’s not likely worth paying a financial advisor to help you manage your assets.


How much do they charge on average?

Generally, financial advisors in the U.S. calculate their fees based on a percentage of the dollar amount of your investment portfolio. The average advisor in the U.S. charges 0.95% of AUM. The latter stands for Assets Under Management.

Thus, if you have $1 million in investment assets, a financial advisor will charge you $9,500 annually. If you have $500,000, then it’s about $4,750. That gives you an idea about costs.

How do you know when it’s worth the price of the fee to hire a financial advisor? Ask yourself these questions:


Do I really have time to give my investments the ongoing attention needed to maximize returns?

A lot of people fool themselves into thinking they have the time to manage their investments. Don’t worry if that’s you. You’re in the majority! The fact is that most people tell themselves that they are going to take the time required to ride their portfolio and keep it in optimal shape. Then life gets in the way. The demands of a job, family, extracurricular activities and the rest take center stage. If that’s you, consider hiring a professional to manage your portfolio.

How organized are my assets?

If you haven’t reviewed your portfolio for six months and then find it a swampy affair, you probably need a financial advisor. Once you get to the point of disorganization, it can be mind-numbingly difficult to straighten things out. That’s a bad situation in dire need of a remedy.


Am I facing a major life-altering decision?

There are times when we reach a crossroads in life and a major decision looms. This may be the things like considering retirement, selling your business or moving across the country to take another job. These kinds of decisions will have a major impact on your portfolio. A financial advisor can make sure that unforeseen negative consequences don’t throw a monkey wrench into your asset regime.