The cost of hiring a financial advisor is difficult to pin down to a single amount. In fact, many would argue that the value you get from using an advisor is more important than the cost in numbers. For many investors, having professionals who can see you through your whole wealth cycle is more important than what they charge.
Read on to learn more about the cost and value of using a financial advisor.
Do Financial Advisors Have Different Fee Structures?
Financial advisors have a lot of variations in the fees that they charge, from flat fees to percentages. In many cases, the fee depends on the number of assets that the advisor manages. Regardless of the advisor’s fees, it is important for anyone you work with to be as transparent as possible, so you aren’t caught off-guard when the fees are charged.
One thing that many agree on, regardless of what structure their advisor uses, is that the advisor’s value matters more than their cost. Many investors are concerned about whether an advisor is worth their money if their wealth hasn’t been growing steadily. Seeing some type of value in using an advisor is what matters in these situations.
How the Value Matters More Than the Cost to Hire a Financial Advisor
When considering the cost to hire a financial advisor, many look at the overall value that the advisor offers over the actual cost. What does value mean in this case? Value is easy to describe as what you get out of using a financial advisor instead of what you pay specifically.
For example, what is the outcome of using an advisor? Do you see your wealth grow or have a better idea of how to make this happen? If the answer to these questions is “Yes,” you are getting a good value.
Another way to look at the value is whether managing your wealth and financial assets is something you have the time to do. Also, think about whether you have the expertise to make the right decisions. If you cannot answer “Yes” to these questions, the value of using a professional will be worth it for you.
Inexperienced investors can make decisions not in their best interests in the long run. The Internet is full of financial advice from investors highlighting what has worked for them that may not translate well for everyone else. An advisor’s value could include being able to spare you from poorly-suited advice.
Why Being There the Whole Time Matters
Relatively few people possess wealth that did not have some type of effort involved. A key to long-term financial success for many people involves starting off with an amount certain to grow consistently. The right advisor can play a leading role in making this growth happen.
Although some relatively low percentages may seem like a good deal at a glance, low fees aren’t an indicator that an advisor will be there in the long run. In fact, if it seems like you’re getting too good a deal for it to be true, you should have good reason to question it. Ask yourself if the advisor’s fees seem consistent with someone who will be there for you in the long run.
Ideally, an advisor should know how to adapt to changes in the markets, as well as be able to predict these changes. Today’s financial markets are more fluid than ever, and advisors who want you to succeed in growing your wealth need to adapt their strategies accordingly. The more adaptable your advisor’s strategy, the greater the potential benefits for you.
Prevail offers innovative solutions for your financial planning needs; contact us today to see what we can do for you so you can see the value of the cost to hire a financial advisor.