How Much of a Service Charge Should You Pay a Financial Advisor?

High Fees Hurt Investment Returns

Service charges and advisory fees limit your investment returns. Every dollar you pay for financial advice is a dollar that you can't invest and a dollar you can't watch grow as annual returns begin to compound.

Good Advice Costs Money

A dollar invested badly could soon become pennies. If you're not particularly savvy when it comes to investing, you may want to think twice before investing without the help of a certified or licensed financial advisor. Make sure you shop around and find a financial advisor that you trust.

Bottom Line

Ask yourself how much you value the advice. There are many pay structures to choose from when dealing with financial advisors, including fee-based, whereby you pay your financial advisor a percentage of the assets being managed, and commission, in which the financial advisor takes a percentage of the dollar value of each trade.

References

• SEC: Protect Your Money

Resources

• NAPFA: Find a Fee-Based Financial Advisor
• CFP: Find a Certified Financial Planner