Fee Only Financial Advisor Near Me: Why and How to Choose One?
There are various types of financial advisors out there, but not all of them turn out to be the best for high net worth individuals and families. People with $5 million to $500 million in liquid assets have complex financial needs that require complex financial solutions that are developed precisely for them and work towards their best interests. This is not possible with just any financial advisor. For customized financial solutions that best align with your goals, you need the best fee only financial advisor. So, instead of searching for just any financial advisor, you need to search for the right fee only financial advisor near me. Read our helpful guide on how to pick a financial advisor for investors with assets worth $10 million or more to learn why this type of advisor is so crucial.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
Wealth managers and advisors at Pillar Wealth Management hold more than thirty years of experience working in this industry and dealing with high net worth clients. We provide a range of financial and advisory services, such as retirement planning, investment management, tax planning, and more, to push our clients towards financial success and security. Be it managing a portfolio or drafting an insurance plan, we care about more than just the numbers and performance. We aim to fulfill your personal goals and targets so that you can live the life you want. Read about why performance isn’t everything from our guide on how to improve the performance of your portfolio for multi-millionaires.
In this blog, we’ll be answering your questions like “what is a fee only financial advisor?” ,“Whether I should use a fee only financial advisor near me?”, “how to find such an advisor?” and “how much to pay them?” Let’s dive right in.
Table of Contents
What is Fee Only Advisor?
There are several different types of financial advisors out there. There are financial planners, broker-dealers, investment brokers, wealth managers and a few more. Then, there are the fiduciary and non-fiduciary types. In addition to that, there are also different types of advisors according to how they are compensated. The three main types are:
- Fee-only financial advisors
- Commission-only financial advisors
- Fee-based financial advisors
Let’s see what each of them does.
As the name suggests, fee only financial advisors charge a management fee only for their services, and that’s it. The more they help you grow your wealth, the more they earn as well. So, it’s in their best interests as well to help you succeed as much as possible. However, that’s not all there is to it. Even within the fee-only advisors, there are a few other types, such as:
One-time flat fees
A one-time flat fee means that you simply pay the advisor only one time. You can discuss your financial situation, and they will recommend certain actions or decisions, and that’s where your relationship ends. Then, you’re all on your own. This is okay if you’re consulting them regarding some very specific aspect of your wealth or short-term plans.
However, you can’t simply keep following their recommendations for the next ten or twenty years. Not only will the market changes make those suggestions and advice irrelevant, but your own financial situation and needs would have also changed.
A percentage-based fee is the opposite of a one-time fee. This kind of fee is charged on an on-going basis where high net worth clients require constant recommendations and management of their finances. Advisors working on a percentage-based fee are actively involved in your financial planning and execution to some extent.
They know about your goals and are always adjusting your plan to mirror those goals. For high net worth individuals and families who either lack the time or expertise to handle their own wealth, this type of fee is ideal, and you can learn more about it by chatting with our managers at Pillar Wealth Management.
The hourly fee is a mixture of both fees mentioned above. Individuals can consult with the advisors from time to time and simply pay for the services rendered then and there. Again, it is better than the one-time fee, but it can be quite inefficient and inconvenient as you will have to bring your advisor up to speed every time.
Commission-only advisors work on commission. They recommend products and securities, and every time they buy and sell them, they earn a commission. As you can probably tell, these kinds of advisors are often tempted to focus more on their own earnings than on yours. They might push you to invest in products that do nothing for your net worth but earn them hefty commissions.
A fee-based advisor is a mixture of commission and fee-only advisors. They do charge some basic fee, but if they are dealing with some other products, they might charge a commission on them too. Sometimes, they will disclose this and sometimes, they might not. Therefore, the safest option is to go for a fee-only financial advisor near me.
Should I Use a Fee Only Financial Advisor?
A financial advisor can be incredibly convenient, if not absolutely necessary, for high net worth individuals. Moreover, when it’s a fee-only financial advisor, you can rest assured knowing that your financial planning and decision-making is in good hands. Here are a few reasons why you should definitely use a fee-only financial advisor.
No Conflict of Interest
As mentioned earlier, with other types of financial advisors, there’s always the risk of conflict of interest. They might be interested in growing their wealth more than yours. However, with fee-only financial advisors, your advisor’s interests align with your interests, so you can expect them to work for you without any conflict of interest.
The more they help you, the more they help themselves. With a conflict of interest, your advisor will simply be taking you towards an uncertain retirement and financial position. Find out why and some other signs of a bad financial advisor by reading our exclusive guide on how to go about choosing the best advisor for yourself.
Financial advisors also tend to have a lot of knowledge and expertise in wealth management and other financial services. They know how to handle large portfolios according to clients’ goals and targets, develop elaborate retirement and estate plans, protect the clients’ assets, minimize their expenses, and a lot more. They know all the ins and outs of the industry and know exactly how to capitalize on market opportunities.
Range of Services
Depending on the type of financial advisor you choose, you can also expect them to be familiar with and offer guidance regarding a wide range of financial and wealth management services. Instead of going to several different people for different services, you can expect financial advisors like wealth managers to look over all aspects of your wealth and assets.
Managers and advisors at Pillar Wealth Management are well-experienced with various financial services such as risk management, investment management, retirement planning, tax optimization and more. Learn about the full range of our services by contacting one of our advisors.
A fee-only financial advisor can also help you minimize your expenses. So, if that’s one of your concerns, you should definitely use a financial advisor. Their extensive expertise allows them to adopt smart strategies that help keep your expenses, such as taxes and internal costs, low while maintaining high returns from your investments.
Moreover, they also always keep you in the loop as to what expenses you can expect and what you can avoid. For more insights like these, order a free copy of our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies for Families Worth $25 million to $500 million.
Constant Evaluation and Adjustments
Like we said earlier, times are always changing. What might seem like a good strategy right now might become obsolete within the next five or ten years. Therefore, even if you have created a comprehensive financial plan with your advisor, you can’t just stick it in the drawer and blindly keep following it.
As the industry evolves, the market conditions shift, and as your own financial situation and goals change, you will want to adjust your financial plan accordingly. A financial advisor can keep an eye on all these and make necessary adjustments as needed.
How Do I Find the Right Fee Only Financial Advisor?
Understanding why you need them is probably the easy part. You must be convinced already and thinking, “how do I find a fee only financial advisor?” Well, here’s where it gets tricky. It’s easy to find any financial advisor, but what you need is the right financial advisor for you. Here are a few ways you can find one. If you want to learn about it in more detail, go through our extensive guide on finding the right financial advisor for investors worth $10 million or more.
Reputation and Credentials
Reputation can tell you a lot about how good a financial advisor is. Don’t just take their word for it when they say they are the best, or they can make you the richest person in the world. Simply see what kind of reputation they have. Moreover, along with that, check their credentials, certifications and other details through a proper background check.
Even if they have an excellent reputation and all the right credentials, there are some things that only come with the right experience. Therefore, make sure they have adequate experience of working in the industry, offering those specific services, and most importantly, working with high net worth clients specifically.
The right advisor for you will actually be concerned with your goals and targets specifically. Accordingly, they will spend some time understanding your needs and coming up with personalized financial solutions.
How Much Should I Expect to Pay a Fee Only Financial Advisor?
You’ve decided to go with a fee-only financial advisor, but you still need to understand how much fee you will be paying. There are two aspects to this.
Since it is a simple fee, you can expect to pay some percentage of the amount of Assets Under Management (AUM). Usually, this percentage is around 1%. However, depending on various factors, this can also go over 2% or fall to less than 0.5%. These management fees also tend to drop lower as the net worth increases.
Money Management Style
How much you should expect to pay to your fee only financial advisor also depends on their money management style. Certain styles call for a lot of active involvement, regular execution of transactions and constantly watching the market trends. This leads to higher management fees. In comparison, some advisors adopt a more laid-back approach and proceed with things slowly but carefully.
As a result, they charge a much lower fee. So, ultimately, how much you should expect to pay depends on a few factors. You can learn more about the impact of these management styles by reading our handy guide on the shifts you must make to maximize the growth of your portfolio. Alternatively, you can get in touch with our advisors and get your questions answered directly.
Choosing a Fee Only Financial Advisor Near Me
When searching for a “fee-only financial advisor near me”, you should take into account several things. You should know beforehand exactly which services you require so that you can choose the right type of financial advisor for yourself. Besides all other things, we suggest always going for a fee-only financial advisor as they face no conflicts of interest, which gives you the assurance that your hired advisor is doing everything he can to help you achieve your goals.
Pillar Wealth Management is a 100% fee-only wealth management firm. Unlike other big financial institutions, we are extremely interested and pretty much obsessed with helping our clients achieve all their short and long-term financial goals and aspirations. Using our extensive range of financial and wealth management services, in-depth knowledge, expertise, and experience spanning over three decades, our managers and advisors develop personalized financial plans according to each client’s unique situation. Book your own consultation session today and get started on your customized financial plan.