What Is Your Financial Advisor REALLY Costing You?

How much did you pay your financial advisor last year - in dollars, not a percentage? Here are the 4 ways advisors get paid, what each one costs, and the conflict each one creates. COMPARE THE COST YOURSELF AUM vs. Flat Fee Calculator - enter your portfolio size and see the difference in dollars. https://valencewm.com/fee-calculator/... Full written breakdown: https://valencewm.com/insights/how-ad... THE 4 MODELS, IN SHORT Commissions - paid when a product is sold or a transaction happens, often built into the product's price, so you may never write a check. For a single transaction it can cost less than an ongoing fee. Watch for: pay is tied to transacting, and some products pay more than others. AUM fee - a percentage of the assets the advisor manages, usually billed quarterly and deducted straight from the account. In a hypothetical example, 1% on a $1,000,000 portfolio is $10,000 a year. Watch for: advice that moves money out of the account, like paying off a mortgage or gifting to your kids, also reduces the advisor's revenue. Flat fee - a stated dollar amount for the year, often priced on the complexity of your situation rather than account size. Watch for: the advisor is paid the same whether they do a lot or a little, so ask what's included. Hourly - a stated rate for time spent, useful for a one-time project or a second opinion. Watch for: you may hesitate to call when the meter is running. FEE-ONLY VS. FEE-BASED Fee-only means the advisor is paid only by clients. Fee-based means the same advisory fees plus the ability to earn commissions on products sold. One word apart, with different conflicts of interest. 3 QUESTIONS TO ASK ANY ADVISOR 1. In actual dollars, what will I pay you in the first year, all-in, including the expenses inside the investments? 2. Are you fee-only or fee-based? Does anyone at your firm earn anything from the products you recommend? 3. What exactly is included in that price, and what costs extra? CHAPTERS 0:00 What did you pay your advisor last year? 0:43 Model 1: Commissions 1:34 Broker vs. adviser: the standards difference 1:56 Model 2: The AUM fee 2:26 Hypothetical: 1% on $1,000,000 3:53 Model 3: The flat fee 4:41 Model 4: Hourly 5:04 Fee-only vs. fee-based 5:54 3 questions to ask any advisor 6:46 What to do next TALK TO US If you'd like to talk through what you find, tell us about your situation and we'll set up a time. https://valencewm.com/contact/?utm_so... Valence Wealth, LLC is a flat-fee registered investment adviser in Scottsdale, Arizona, working with executives and employees whose wealth is concentrated in company stock. Disclosures: The information provided is for educational and informational purposes only and does not constitute investment, tax, or legal advice and should not be relied on as such. It is not a solicitation to buy or an offer to sell any security. It does not take into account any individual's particular investment objectives, financial situation, or needs. You should consult your own financial advisor, tax advisor, or attorney before acting on any information herein. Fee figures in this video are hypothetical and for illustration only. Actual fees vary by firm and fee schedule. Valence Wealth, LLC charges a flat fee and therefore has an interest in the comparison discussed. All investing involves risk, including the possible loss of principal. Valence Wealth, LLC is a registered investment advisor in the State of Arizona. Full disclosures: https://valencewm.com/disclosures/ #FinancialAdvisor #AdvisorFees #FlatFee #FeeOnly #PersonalFinance