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Comment by sb8244 | Hacker News Reader

I looked into fee only advisors in my area for investing and 100% of them charge a minimum of 1% AUM in order to "do their thing" with it. It was pretty crazy experience to go through. Most of these advisors are creating a portfolio using ETF index funds, so it is a pretty outrageous price to pay.

I did find one that sold hourly consultations and she was really helpful at confirming my plan and that another situation I may have gotten myself into was not a good deal for me.

I say all of this because $500-1000 for a fee-only advisor is something I literally could not find. Additionally, advisors I researched have minimums in the hundreds of thousands range.

I ended up following bogleheads methodology and I think I'll be happy. It's still pretty new so no real data yet.

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Vanguard seems to offer advisors at a certain point -https://investor.vanguard.com/advice/financial-advisor but honestly I'm not sure what they can really provide beyond the standard bogleheads.

A separate advice session from a tax guy can be worthwhile but always remember that the tax guys work to minimize taxes, which isn't necessarily always the goal.

The bogleheads forum is great for general advice, even if you only read it: https://www.bogleheads.org

Even simpler than that, is there any reason not to go with something like a Vanguard Lifestrategy which implements something quite close to a Bogleheads mix? Asking sincerely as that’s what I’m using now, and it’s just so easy it feels like there must be some unanticipated downside.

I agree. Buy some low cost diversified funds through Vanguard. I cannot understand why the average investor needs anyone else in the loop.

Those funds have higher costs. If you want to do that (and it's a good idea) look at the portfolio allocation and then buy the ETF version of the underlying assets.

This is really the only downside (beyond them being perhaps too conservative - but you can adjust by selecting a different “year”).

That’s not a fee-only advisor. A fee-only advisor will charge an hourly rate for time you’re actually meeting or a flat dollar amount. Never a percentage of AUM.

Percentage of AUM is a common structure for wealth management/financial advisors.

For ongoing management. Yes. That’s NOT what people need most of the time.

That’s right! Did you know there’s a name for the subset that don’t?

No, you have that wrong. The opposite of "fee-only" is "commissioned-based" - where you don't have transparency into the cost of the advice (which is free at the point it's offered) because it's kicked-back to the advisor by the funds etc. that are being offered.

A fee based on AUM is an entirely standard way of paying a fee-only adviser.

ref. https://www.napfa.org/financial-planning/what-is-fee-only-ad...

Yes but that is the opposite of fee-only

Not true. There’s AUM fee only, and flat fee only.

The term fee-only universally applies to flat fee. Anything AUM based is not fee only.

Could you look at some of the links in this thread applicable to the issue, rather than simply repeating your (minority) opinion as though it's gospel?

It’s extremely common, but it’s not fee only.

Fee only takes an up front fee, sometimes fixed, sometimes hourly.

https://www.investopedia.com/articles/investing/102014/feeon...

The article you're quoting directly contradicts your view, e.g.

>Generally, though, most agree, fee-only refers to payment from fixed, flat, hourly, or percentage-based fees.

Just to be very clear for anyone else who comes across:

Fee-only simply means they are paid an agreed on price from you and they don't get kickbacks, commissions, any type of reward for where you put your money. Fee-only fiduciaries will also have a link on their website to a PDF that very clearly describes the relationship and pricing.

There are hourly fees and AUM fees. I have only seen hourly fees apply for the creation of a financial plan. I did not see any offering in my area of someone managing a portfolio for less than 1% AUM.

The cost of a financial plan was quoted to me at least $6500, so not cheap.

I talked to a "normal" financial advisor as well—they get kickbacks. They tried to put me in super aggressive setups, life insurance, etc. It was not discussed upfront what their cuts are and it was very clear that it wasn't best for me. Be very very cautious if you ever go down this route.

This is not true, I used to believe that and then I met with a fee only advisor, and they did in fact want a percentage of AUM. What the fuck!

Here's what NAPFA says, https://www.napfa.org/financial-planning/what-is-fee-only-ad...:

"Fee-Only financial advisors may be paid hourly, as a retainer, as a percentage of assets (AUM), or as a flat fee, depending upon the planner you choose."

What you are describing is advice-only not fee-only. That's what I want, an advice-only advisor. Good luck finding one. I can't.

I'm probably better off just taking the Series 65 myself for now to see what parts I don't know.

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