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Fee Only - No Long Term Relationship Required

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  • Fee Only - No Long Term Relationship Required

    I started thinking Fee Only advisors would be a good match for my current preferences but it looks like many of them charge a flat fee per year and expect to somewhat manage my portfolio. What I really want is for someone to charge me an hourly rate, take a look at my portfolio/assets, provide recommendations that I'll implement and then if I want ad hoc help every few months, I'll pay one off.

    Do most fee only wealth management firms include these types of services as well or do they require that they actual "manage" your portfolio in one of their models?

  • #2
    The best ones such as Roth and Ferri charge $400-$500 per hour I believe. I think they would be worth engaging if I had a complicated portfolio that I needed personalized help to fix, especially if there were a lot of bad investments in a taxable account. If I were starting out and just wanted advice I would just stick to free resources like this and Bogleheads, etc.


    • #3
      I think most firms want an ongoing relationship because it brings in more money without the need for constantly marketing for new customers.

      The two mentioned will do exactly what you asked.
      The Fiance Buff has a service that will link you to hourly fee advisers.
      People often mention the Garrett Planning Network as offering hourly fee advice.


      • #4
        There are at least several advisors on the list of WCI-approved financial firms that will provide a financial evaluation/recommendations for an hourly rate with the option to change to an annual flat rate for a higher level of service in the future if desired.


        • #5
          Though you have a relatively specific question, I'm not sure many advisors would charge 1 or 2 hours and be able to answer appropriately. An advisor will need to understand your goals, spending priorities, contribution rates and opportunities, and risk tolerance, etc. To understand you and answer your question effectively, I would guess plan on retaining a planner for around 15 hours of which at least 3 will be on the phone with you. As others have stated, you can try here and bogleheads first, it has the advantage of free, though like in formal planning approach the more information/detail provided will allow people to better answer.


          • #6
            I believe there was a guest blog post on it. I wasn't able to find it.


            • #7
              Think of it this way, to get a baseline there’s a lot of upfront work (if you want it done right). It’s no different than the more intensive series of diagnostics/tests before being able to have a treatment plan. So if you have a fiduciary there will typically be this type of upfront planning or setup fee. From there more flexibility is available firm by firm. Just remember that if you don’t keep some kind of relationship along the way they will need to invest time (that you’re billed for in the hourly sessions) to catch back up with updating everything that’s changed between your last meeting and that time. In my experience that’s where having a flat annual fee after the initial plan with at least an annual meeting (like a financial physical) can be a good fit, with no money management required. Your value comes in getting a call now about reviewing Roth conversion or TLH considerations, or navigating how to be best positioned with the SECURE Act legislative changes, etc. in addition to the portfolio reviews.

              You won’t find the transactional “sell this, buy that” because as fee only there is the fiduciary standard. Without a thorough understanding of your situation, goals, concerns etc. we can’t give fiduciary advice. I hope that helps & wish you luck!
              Founder, Coastal Wealth Planners- Fiduciary Tax-Sensitive Retirement Planning & Wealth Management email: [email protected]


              • #8

                Hourly WCI vendor.


                • #9
                  You're really looking for advice only advisor, not fee only. Harry Sit?



                  • #10
                    Your best bet is probably Garrett Planning Network. All fee-only, all hourly. To addressafan ’s comment, I cannot speak for others, but we spend ~35 - 50 hours developing a comprehensive plan in the first year. Ongoing, we reach out to meet quarterly and update the plan annually. They may choose to skip a quarter and then have a flurry of meetings.

                    In-between meetings, we are available as needed to update budgets and goals, run scenarios, review contracts, assist with tax and estate planning, review asset protection, etc. For example, one client is nervous about shuttering their practice before this winds down. So we’ll be meeting to update “normal” budget for “best case” and “worst case” scenarios. This cannot be done in 30 minutes - it requires a deep discussion, sometimes involving tears. And most of our clients do not have us manage their portfolios - we give them DIY recommendations. While we ask that they stay 1 year, we have no requirement to lock clients in to our services.

                    There is no way we would do a spot check and recommend a portfolio without having a solid plan in place that we are comfortable will meet a client’s long-term goals and short-term liquidity needs. I am not saying this is the best or the only way to do it, just offering an alternative. Clients regularly comment that they had no idea what real financial planning involves.

                    We’re not the only firm who does this and this is not an advertisement for Fox. I just want to clarify that comprehensive financial planning firms do not go on cruise control after developing the initial plan. At least we don’t. Certainly, none of our clients’ lives are on cruise control.

                    I think there is a place in the planning profession for both styles of advice.
                    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


                    • #11
                      Hard to imagine many people need 35-50 hours of initial planning. Are these people with a dozen closely held businesses around the world? Several families? Why in the world would someone with one job and liquid investments need anything approaching that?

                      Comprehensive estate planning for us a few years ago did not involve anything close to 35 hours. No need to repeat for many years.

                      For those whose financial lives are so complicated that they do need 50 hours, can't they just pay for that many hours, without any expectation of ongoing services or fees?

                      I would not want someone calling me quarterly or annually. If I need for help I will seek it out. I can go years without needing any. Our financial lives are simple. Taxes are simple. Insurance is simple. What more do we need?


                      • #12
                        I spend 35-50 hours every 2 weeks researching markets/funds, personal finances, business strategy, risk management, real estate, reevaluating insurance needs, legacy/estate planning, emerging business/tax law, etc. With some of the comments I see here, I'm impressed that an advisor can educate a new client enough (who doesn't do their own in depth research) with 35-50 hours of work. 35-50 hours is a drop in the bucket when it comes to financial literacy.

                        I get hours and hours of necessary and regular tax and legal advice from CPA's and lawyers who are friends and family. I don't use a formal investment advisor as I haven't found anybody fond of active sector investing versus DCA index investing. Knowing myself, I wasn't going to let anybody convince me that a net inflow into the markets last year with the treasury investment in a 10 year old bull was a good idea, or to use my one year emergency fund to invest in such a vulnerable market. It was my red line. Way too risky for my tolerance. I would just drive them nuts and probably get fired, that's my biggest fear. They are still very valuable to clients that want to DCA index funds and can prevent big mistakes, educate clients that don't do their own independent learning. Worth every penny, especially in times like these.


                        • #13
                          Can you give examples of what new knowledge you have had to acquire with this 25 hours a week dedication to finance? Are your taxes constantly changing? If so, why? Are the assets you hold constantly changing? Do you turn over your entire portfolio every week? If so, why?

                          Do you have a day job?


                          • #14
                            Originally posted by afan View Post
                            Can you give examples of what new knowledge you have had to acquire with this 25 hours a week dedication to finance? Are your taxes constantly changing? If so, why? Are the assets you hold constantly changing? Do you turn over your entire portfolio every week? If so, why?

                            Do you have a day job?
                            For background, I own a multiple provider primary care business and commercial real estate with multiple tenants. As such, I spend 3.5 days per week in direct patient care with the remaining 12 hours focused on administrative duties. Such duties include but not limited to optimizing revenues by implementing new business offerings, networking, marketing, and the second part of that equation is reducing costs by regularly reevaluating and modifying supplier relationships. All that requires regular research. On cost benefit analysis of new offerings - do I implement in house x-rays, pharmacy, Holter, wound care services, accept walk-ins, etc? Do we have the volume to add another provider? Do we have appropriate levels of staffing? With our current services, have we negotiated the best value with our service contractors, insurance plans, supply vendors? I don't have a purchasing department with a small practice and our purchases approximate 750K-$1M/year now. Human resources and interviewing. Business ownership is not a static thing and as the sole owner I have to worry about the welfare of 15 employees and their families. Is our business and real estate adequately insured? With real estate, do I strategically pay down debt or invest surplus? For me, the right answer changes based on the circumstances of the day. State lease sales tax rates have changed a few times recently for some reason. Reviewing and preparing monthly bank statements for our CPA and to keep a close eye on business and real estate holding company finances. Small business access to adequate credit especially in times like these. All this can easily take 12 hours a week.

                            After hours and weekends, easy to spend another 12 hours a week. My estate is highly likely to be taxable upon transfer to children, so that is addressed ongoing. Tax laws change like last year's 10K limit on residential real estate deductions - that may alter mortgage decisions, for example. I prefer sector mutual funds, so I study the companies held by the funds. I prefer to buy low and not buy high, call it timing but in reality it has nothing to do with numerical market levels rather with underlying market fundamentals and psychology, bull bear cycles, market data (trends in VIX, unemployment rate, corporate profits, treasury inversion, GDP, election uncertainty), etc. I prefer to diversify into non market investments. This is what I like to do - it's my skiing in the mountains or fishing on the quiet lake. Most others prefer the skiing and fishing, so a good advisor can do this part for them.

                            There's also always something new coming up. Right now is managing the coronavirus risks - a personal health and business existential threat. Close business or remain open? Telemedicine options. Send high risk coronavirus patient to drive thru testing centers or test in parking low with PPE? Keep payroll or furlough? Do I have enough emergency funds saved to keep business operational and for how long? How many patients will lose insurance coverage? Just applied for a small business bridge loan at 0% 12 months, different than the offerings coming up in the $2 trillion stimulus that also needs to be researched and weighed. Took work to gather the necessary information. Further stimulus packages? These all ultimately have a bearing on finances and investments.

                            Personal finances. Tap IRA with new coronavirus rules needed? College and professional school funding for children. Future wedding funding for children. Budgeting in an age of potentially lower incomes. Tap a credit line? Sell assets? Call me crazy, but I like to consider ahead of a cash crunch.

                            To answer your question, I buy and hold mutual funds for the long term, other than the ones that underperform are traded out in early bulls or converted to cash equivalents in overheated markets.

                            Maybe I'm slow. I give credit to those that do this with under 25 hours a week. I can and I enjoy doing these things. I must to have continued for over two decades.


                            • #15
                              Most of what you have described is simply running a business. One would have to make those decisions constantly, even if there were no new laws, regulations or options arising.

                              As for personal finance, which is where financial advisers offer to help, I still don't see the need for even 12 hours per week.

                              Personal finances. Tap IRA with new coronavirus rules needed? College and professional school funding for children. Future wedding funding for children. Budgeting in an age of potentially lower incomes. Tap a credit line? Sell assets? Call me crazy, but I like to consider ahead of a cash crunch.
                              These are personal finance questions but the answers don't change weekly. Most would be set once and not change until, for example, the federal estate tax exclusion changes. That happens every few years lately, not every day. Even changes in the limit only affects plans if one moves between affected and not affected. That might not occur in your lifetime.

                              Education funding is the same way. Once you set up a plan, no need to change it every 5 years, let alone every week. Pointless to revise long term budgets now when no one has any idea of the long term effect of the crisis on incomes or prices.

                              ​​​Why would one even consider tapping credit lines or selling assets? Why would one reconsider this weekly?I would not take on more debt based on anything that has happened so far, or any reasonable projection of what will happen in the future. What will the economy look like in 5 years? No one knows. No one knows what it will be like in 6 months. Spending a dozen hours a week planning for this is at best useless and could lead to to extreme and inappropriate actions at worst.

                              Far, far better to set up an asset allocation with which you are comfortable and cash flows that can sustain a temporary interruption in income, then let those be.

                              I have not found the need to do anything in response to the crisis. My income is probably going down, but unlikely to go to zero. My investments are long term, so I don't change them because of a few weeks of market volatility. They were not based on the assumption that we would never have another recession, so the advent of a downturn changes nothing.

                              You have to run your business. You may or may not have to re evaluate every business financial decision every day. If you do need to do this, you desperately need to organize your business affairs much better.

                              You have no need to spend more than a few hours a year on your personal finances. If you have set things up such that more than that is required you need to simplify.