Asked by Tom  |  Submitted September 18, 2014

My company is offering retirement advice that would cost me about $2500 per year ...

I contribute to 401K and invest in the Fund geared to my retirement year... should I bother with the adviser?

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  Answers  |  6

September 18, 2014

Fees paid to your advisor should provide benefits and value that out weigh the cost, or you should seek out another advisor. In order to do a good job for you the advisor will need to take into account all of your investment and savings resources, match them to your risk tolerance and goals then make a recommendation. If the advisor is limited to just the 401k, then you will need to balance out the rest of your plan on your own.

$commenter.renderDisplayableName() | 05.10.21 @ 08:29


October 01, 2014

I would add consideration of what else the adviser might be doing for you. If he or she will only be dealing with the 401k then arguably you don't need the help. If they will be taking a comprehensive look at all of your finances then it could well be worth the cost. I would be asking "what exactly will I get for my money?" They should be able to provide a good answer. Good luck!

$commenter.renderDisplayableName() | 05.10.21 @ 08:29


November 10, 2015

I agree with what these other professionals have said. When hiring a financial advisor you should get more in value than what is being paid.

What I don’t fully understand is that your company is offering you “retirement advice” that you would have to pay for? If you are paying for it, then it’s not really any benefit being offered by your company. And that price seems extremely high if they are offering to review only your retirement accounts or that’s all you need help with.

Having said that, you mentioned that you were using a “target date” fund so I don’t think you need any advice on your 401k.

The typical financial adviser that charges for financial planning should offer to review your situation at no charge. They should then provide you with a list of what they have found and then charge to help you address the problems that have been found. If they are charging $2,500 up front without knowing whether or not they can provide any value to you is a little odd in my opinion…

Unless what is being offered is a “fee-only advisor” that will cost you $2,500 per year? If this is the case, keep in mind that you then must pay someone else to implement their advice or DIY.

I’m not a big fan of fee only and have set my practice as “fee-based” as I believe the economics are far better for the client. Insurance ALWAYS involves an Agent earning a commission. Investments have costs and a small annual management fee isn’t bad if the portfolio is performing well.

In my practice I charge a planning fee in the first year and the investments/insurance that I assist with cover my compensation in subsequent years. And yes, I provide an initial review of the potential client’s entire situation at no charge. A good review should include estate planning, tax planning, insurance coverages and your investments.

You should probably look for a financial adviser in your area who offers comprehensive wealth management and get a second opinion on your entire situation and go from there.

I hope this helps. I would be happy to answer any follow up questions you may have.
Brad Creger

$commenter.renderDisplayableName() | 05.10.21 @ 08:29


November 10, 2015

I would concur that $2500 in planning fees would only provide value if

(1) you are meeting personally with the advisor
(2) the advice is specific to YOU, and not generic in nature
(3) it encompasses more than just your retirement assets.

I don't know your specific situation, but unless you are an executive with a more complex financial situation, I think you could get advice/basic planning for less than $2500. At that price, you are talking about at least 10 hours of planning.

$commenter.renderDisplayableName() | 05.10.21 @ 08:29


November 19, 2015

Depends what percentage of your invested assets that is, and what they are doing for you?

$commenter.renderDisplayableName() | 05.10.21 @ 08:29


April 03, 2016

Hi Tom.
What are you getting in return for the $2,500? What is the value of the investment?

For example:
If you have a 401(k) with $100,000 in it. Then 12 months later with no additional contributions you have $115K or a 15% ROI. How much are you willing to pay the Advisor that got you this? Keep in mind that if you subtract the $2500 from the $15k in profit. You are left with $12,500 or 12.5% in profit. Is this good for you?

Now add up all the $$ inflows you are getting from the Advisor and subtract all the $$ outflows you are giving. There are also many non $$ services that Advisors offer.. Who is getting more and is it worth it from your perspective? This is an individual answer.

As an Investment Manager (IM), We and our clients demand that they get more from us than we get from them. We have performance based fees for Accredited Investors (AI) -Qualified Clients (QC)in some states, that are 25 over 6 or 25% of profits in excess of a 6% hurdle rate. Example- 10% profit. Minus 6% hurdle equals 4%. Next divide this by 25% profit. Equals our 1% fee.

Our maximum AUM fee for traditional clients (we do not charge an AUM fee for QC's or AI's) is 2%. So, a $100k account would net us $2k in fees. We do require that our clients get more than we do. Some are comfortable with 8%. Others may want 15% or more. Again, this is an individual answer.

Bottom line is what are you getting in return. Discuss this with your Advisor and make certain that your hard earned $$ are working just as hard for you as you have for them.

We encourage you to contact us and other Advisors and always do what is in your best interest. Do contact us directly for further discussions. No obligation.

It's not what you make, It's what you keep that determines your lifestyle.

$commenter.renderDisplayableName() | 05.10.21 @ 08:29