Are You Getting Your Money's Worth for What You're Paying Your Financial Adviser?

Investment management can cost as little as 0.25 percent of a portfolio's value each year. Yet many people still pay 1 percent, or even more, for financial advice.Whether they're getting a good deal depends on exactly what they get in exchange. Spoiler alert: Many should be getting a lot more, or paying a lot less.Financial advice can encompass a lot of different services, which fall primarily into two camps:1. Investment management, which includes picking the right mix of stocks, bonds and cash.2. Financial planning, which can include everything from budgeting advice to estate planning.Comprehensive financial planners have traditionally supplied both investment management and planning services, often charging a percentage of the clients' assets that they manage. A recent survey of nearly 1,000 financial planners by trade publication Inside Information found that the bigger the portfolio, the lower the percentage clients paid. The median annual charge was 1 percent for portfolios of $1 million or less, sliding to 0.5 percent for portfolios of $5 million to $10 million. The survey focused on independent advisers who typically charge fees, rather than brokers or insurance agents who are often paid by commissions.  Continue reading...