Best Ways To Maximize Your Financial Advisor To Build More Wealth

I don't have a financial advisor, but I do have a Citigold wealth manager assigned to me for an after-tax investment account. You get one of those after you cross a certain asset threshold. This self-managed account was seeded by my severance check in June 2012 and it has grown quite handsomely since due to regular contributions and the bull market.

Citibank has a wealth management division where you pay ~1% of your assets in fees. But I'm not down with traditional advisor fees. I enjoy managing my own money because I have the time and knowledge to do so. John, my wealth manager, makes trades for me for $9.95, highlights interesting investment ideas, gives me some color on what he's seeing in the markets and what his clients are doing. From there, I decide what to invest.

The last investment idea he highlighted was an S&P 500 structured note where an investor gets 150% of the upside in the S&P 500 after 5 years, no dividends, and a 30% downside barrier to get all his money back. I'm always worried about putting new money to work when the stock market is at all-time highs, but I also know that markets tend to make higher highs in the long run. In the end, I decided to invest $50,000 in this security through this account.

John highlighted this idea to me because he knows my investment criteria. We talk or exchange e-mails on a weekly basis. If we weren't in regular contact, then there's a high chance I would have missed this particular note. There's always so much going on and I know he didn't call all of his clients about it. It's up to us to find the best opportunities at any moment in time.

What I've discovered after consulting with dozens of personal finance clients over the years is that those who do have money with a robo-advisor or a traditional wealth advisor do not keep their financial advisor updated. Not only do they not keep their financial advisor updated with their financial goals, they don't even get on the phone to get a monthly or quarterly rundown of their portfolio performance or hear their advisor's market outlook.

Financial advisors love it when their clients don't ask them for anything. Once they've set up their client's asset allocation, all they've got to do is blast you their regular generic market update and collect fees. What a great business. Demand better.

Make Your Financial Advisor Work For His Money

I'd like everybody who has money with a digital wealth advisor or traditional wealth advisor to contact them today to arrange a 30-60 minute call. On this call you should go through the following three things:

1) Get an investment portfolio update. The update should include a run down of your winners and losers, an analysis of your current asset allocation, a rundown of the fees you have paid so far, and a comparison of your investment portfolio's performance versus the S&P 500 or whatever index you've benchmarked.

If your investment portfolio's performance is not keeping up with your desired benchmark, you must ask your advisor why. There's no point consistently underperforming your benchmark if you are paying a fee. You must ask what are the benefits you've received for the fees you are paying.

Wish I was up 23.14% for 2016, but the 23.14% includes contributions. Up closer to ~8% for all investment portfolios. Personal Capital dashboard, Portfolio -> Performance -> Select Investment Account(s)
Wish I was up 28.88% for 2016, but the figure includes contributions. Personal Capital dashboard: Portfolio -> Performance -> Select Investment Account(s)

2) Update your advisor with your financial goals. Your financial advisor can't read your mind. You must keep him or her regularly updated on changes in your financial goals. Even if you haven't made any changes, it's up to you to remind him what your financial goals are. I guarantee you he will have no idea about the specifics if you haven't spoken in the past 12 months.

When I first sat down with my wealth manager in 2012, I told him I was bullish on the economy and wanted to invest heavily in stocks with my severance check. The severance felt like a lottery ticket worthy of being parlayed into something greater. 100% of my severance check was invested in the S&P 500 and Dow Jones Industrial Index as a result.

Now, my outlook is more conservative because I want to protect the ~60% gains I've made since 2012. As a result, I sent John this e-mail:

Dear John,

Hope you had a great vacation. I've got some new goals I'd like to share with you for the new year that I hope you can help me with.

a) I'd like to shift my asset allocation to 40% stocks and 60% bonds to get more defensive. Let's identify long-term holdings to sell to minimize taxes.

b) I'd like to invest all new money in a similar 40% stocks and 60% bonds ratio. My monthly cadence will be $10,000 – $30,000 a month on average. If I haven't invested anything for the month, please follow up.

c) With the sell-off in bonds, I'd like to start building a significant municipal bond portfolio. My short-term goal is to build a $250,000 muni bond portfolio that spits off ~$6,250 a year in double taxation free income through CMF and MUB.

d) Please also send me new California municipal bond issuances with at least a 2.5% coupon. I'd like to buy specific bonds at par in $10,000 – $20,000 increments. I've got a strong focus on building double taxation free passive income over the next three years.

e) Within five years, I hope to use new money to build a muni bond portfolio equivalent to the principal left on my primary residence so I can live for free. Based on regular monthly mortgage payments and random principal pay downs, I expect the matching figure to be around $650,000 from the $819,000 mortgage today.

f) By June 1, 2017, I will have about $340,000 in a CD and $60,000 in a private investment come due. Depending on where the stock market and bond market are at the time, I'd like to deploy $300,000 of the proceeds in low risk investments that have a high chance of producing a 4% gross yield. Please keep an eye out for such securities.

It's been an incredible run since we first started working together in 2012. Let's protect the gains we've made so far and lower our risk exposure. Nobody has ever lost locking in a gain!



Now that my wealth manager knows my intentions, he can present to me more suitable ideas that fit my goals. Every single e-mail and phone call I have with him will be much more focused. He doesn't have to guess what I want since he knows exactly what I want.

3) Provide a complete financial picture. The more your financial advisor knows about your entire net worth, the more appropriate recommendations he can make. The advice can be very different if he thinks your entire net worth is made up of the $500,000 you have with him versus if the $500,000 is just 20% of your net worth.

Since I've got my main savings account plus a couple mortgages with Citibank, I've determined my financial advisor knows enough financial information about me. I haven't disclosed my assets at any other institution to keep him focused.

Related: Suggested Net Worth Allocation By Age And Work Experience

4) Create some incentives for your financial advisor. Financial institutions are always creating incentives for customers to do more business. You should consider doing the same to get better service. Your financial advisor deals with many clients daily. It's natural for him to service the clients who have the most amount of money first.

If your portfolio is on the smaller side, the easiest way you can improve service is by keeping your advisor up to date with new monies you plan to invest. A savvy financial advisor will focus on your upside financial potential. Telling John I've got an influx of $400,000 by June 1, 2017 helps keep him motivated to continue sending me a monthly run down of his best investment ideas at the very least. When he was traveling abroad, he was actively responding to my e-mails at midnight his time. I really appreciate such service.

If you don't have an influx of cash coming in, you can always talk about your plans for a potential influx. Instead of saying I've got $400,000 coming in next year that needs to be put to work, I could tell him I'm thinking of selling my business for a large windfall within the next five years. That will surely get him pumped to provide great service.

Finally, one of the easiest ways to get better customer service is to simply be nice. People who sell, love to talk to people they like. It's an easier phone call to make.

SEP-IRA snapshot using Personal Capital's Portfolio -> Allocation feature.
My SEP-IRA snapshot I started in 2013 using Personal Capital's Portfolio -> Allocation -> Select Investment Account.

Help Others Help You

We should all be maximizing benefits and minimizing costs. Don't settle with the service you are already getting. Just the other day I was hitting my 15GB data limit with AT&T. I called them up and they increased my monthly data limit to 20GB for no extra charge. Ask for more.

It feels great knowing you've got someone looking out for your best interests. There's just too much going on for you to keep track of everything happening in the financial markets. Give your financial advisor a game plan to follow so you can focus on the things that bring you the most joy.

Recommendation To Build Wealth

Manage Your Money In One Place: Sign up for Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances yourself. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.

After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Definitely run your numbers to see how you’re doing. I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.

Personal Capital Retirement Planner
Is your retirement plan on track? Find out for free after you link your accounts.

Updated for 2019 and beyond.

52 thoughts on “Best Ways To Maximize Your Financial Advisor To Build More Wealth”

  1. I’ve been using Spanish Peaks Capital mgmt. Have any of you had any experience w them? I’m definitely going to go over a lot of these things with them when I talk to them next. Glad to hear that the fees are competitive. Thanks.

  2. Tyler Meredith

    I like the recommendation to provide a complete financial picture and history. It makes sense that financial planners need the most information possible to make sure the planning is effective. It’s something to remember because having this in the initial meetings with a planner could be good to save a lot of time.

  3. Single Income Life

    Great article, Sam! E-mail sent requesting a meeting. This is my first year with an advisor and meeting with him will be a great opportunity for me to assess whether he is worth the 1% asset management fee. Thanks for the article. I probably wouldn’t have taken action otherwise.

  4. I think I have a really cheap arrangement. My independent financial advisor charges me $1600/yr to manage my $2M Vanguard account mainly made up of index funds. So his fee comes out to .0008, which seems remarkably low compared to Vanguard Personal Advisor Services, which charges 0.3% ($1600/yr vs. $6000/yr).

    However, he doesn’t like me to contact him that much. He’s OK with me asking him a couple of questions during the year but mainly wants to keep our relationship to the annual in-person meeting for asset reallocation.

    My question: Since he’s so inexpensive and seems to be a good and talented manager, do I have the right to ask him for all that other stuff: an analysis of your current asset allocation, a comparison of your investment portfolio’s performance versus the S&P 500, etc?

    1. That actually sounds like a REALLY low price. Most index funds charge 0.1-0.5%. As someone who does NOT have a financial advisor (meaning take my opinion with a grain of sodium chloride), I would say that his services have been pretty reasonable for what he’s charging. I assume he’s making the occasional trade to keep your portfolio well balanced and diversified.

      I could be wrong, but it sounds like a very low price to me based on the percentage.

      Of course, you still have every right to ask him questions and set more meetings with him. You’re still paying for the service. If it’s too much for the fees he charges, he can charge you more or refer you to another advisor.

      ARB–Angry Retail Banker

      1. Hi ARB: Yes, it is a really low price. And he’s not making occasional trades. We meet face-to-face once a year to rebalance. That’s it plus a couple of questions he answers during the year. He recently raised his fee from $1300/yr to $1600/yr because he was spending more time on my account so he’s already starting to charge me more. It’s still super cheap, though. One question…why are you angry (ARB)?

  5. Honestly, I’d say that most people on here probably don’t even need a financial advisor. Most people with money who aren’t investing experts and have years to build wealth would probably be best off socking their after tax wealth away in an S&P 500 index fund and various US municipal bonds or bond funds, not stuff that’s super complicated. Even someone going out on their own and investing in dividend growth stocks would find it very difficult to lose money with a portfolio of well known multimillion dollar companies that have raised their dividends for decades on end.

    For many people that don’t even know how the stock market works and came into money overnight, a financial advisor might be best. They would have saved more than a few pro athletes. But for you, Sam? And the pretty financially savvy Financial Samurai readership? Why would you pay 1% in fees to a financial advisor when you all know how to do this yourself?

    ARB–Angry Retail Banker

    1. I think you misunderstood. FS said:

      Citibank has a wealth management division where you pay ~1% of your assets in fees. But I’m not down with traditional advisor fees. I enjoy managing my own money because I have the time and knowledge to do so.

      So he does NOT pay 1% in fees . . . this is a concierge service based on the amount of assets he has with them.

  6. Hi Sam

    Based on your Venture debt investing posts, I decided to contact a few firms that may be currently raising funds. Can you share your due diligence process when you invested in venture debt? it’s an entirely new concept for me and I would like to know how you did your due diligence. The company i am looking at is Trinity Capital Investment. Thank you!

  7. Hi Sam,

    I started following Financial Samurai about six months ago and have really enjoyed your posts, so thank you!

    Reading this article made me reflect – again – on my own aggravating situation. Perhaps you have some advice:

    I have a full-service financial advisor by marriage, not by choice.

    When I first met my husband in 2010, he was just starting his (new) career as a financial advisor, and I was a single professional who had always managed my own portfolio in a low-cost Schwab brokerage account. When we got married three years later, I had to give up my “outside” brokerage account to comply with his firm’s conflict-of-interest policy. My only option if I wanted a have brokerage account was to open one with his full-service, full-fee firm. (Say that 10 times fast!)

    Please don’t misunderstand me – my husband is a wonderful, intelligent, hard-working, customer-focused professional who loves what he does and is very good at it, but it really STINKS to have to pay a large Wall Street bank 1% of my managed assets every year. I wouldn’t mind if the fees – or even a reasonable fraction of them – went to my husband, but they don’t. He is still the “new kid” on his team, so for every dollar I pay in fees, he sees about 3 cents!

    Any thoughts?

    1. No advice here, just commentary. I believe this practice should be illegal. The only conflict of interest is for a firm to be able to mandate that their employees AND their families be customers on condition of employment. It’s the same sort of BS as the accredited investor rule, but that’s another conversation. The practice should be outlawed.

      At the BARE minimum, the firm that you have to transfer your money to should be required to either match the fees your previous firm charged or waive them entirely. If you are happy with your low cost firm, then you should be able to keep those costs in the new one. If that means that they are servicing you at a loss, well THEY are the ones that required you be their customer.

      Okay, let me just figure out how to get down from my soapbox now. It’s a long drop.

      ARB–Angry Retail Banker

  8. Hi Sam,

    I’m scheduling my call for next week! One thing I want to ask is about fees cause I’m in a target retirement fund because I feel more comfortable in the fund setting the allocation for retirement investments and adjusting them as times goes on. But I want to see if my advisor suggests it’s better for me to allocate and avoid the fund fees.

  9. FIREin' London

    Hi Sam,

    Some great tips in there! Over here in the UK, I do use an advisor, who charges 0.5% of all contributions.

    You are spot on that you have to share your goals, otherwise how can they know what to recommend and try to achieve? Mine knows my goals, and also most of my assets – he has never attempted to try and “take into management” one of my investment accounts as he knows what we do, and we even have as part of our yearly check in a “who beat who” to make it a healthy competition. That way I get the advice tailored to me (including the “you are holding too much cash really” which was fair). I get a monthly update, but I also have access online to view the performance, which I do each month.

    Other than that I dont talk to him that often, however when I do need to talk to him (e.g. mortgage refinance, new portfolio etc.) and then we spend quite a lot of time going through, tailoring the objectives of that area, and fine tuning until we hit my goal.

    That said, if there is ongoing underperformance then I will move on!


  10. AustralianDividendInvestor

    Personally, I liked the idea of implying that you will be receiving a large windfall in order to motivate your advisor! A little bit sneaky and a bit ironic, as you know that the advisor is incentivised to sell to you as well!

    Advisors are exactly that; there to advise. Don’t outsource your financial understanding, people! No one cares as much about your financial well-being as you will.

  11. This what bugs me about financial advisors. They are basically financial consultants. If someone pays you a fee to advise them and invest their money, why are they not pro-active, why must you call them? Why must you chase them to perform their job?

    I’m an engineering consultant. We are never allowed to sit on our bums and get paid. We highlight opportunites, chase the client down for approval and basically have to be on point at all times. They have it way too easy.

  12. Did I read correctly that you are only paying 9.95 a trade and he’s spending a ton of time working for you and offering first class service and giving you consistent and well thought out advice? I certainly hope not, or the poor guy won’t be in business very long.

    1. You did indeed. When you cross a certain threshold of assets, they assign you an “advisor” as part of the service. Think of him as a concierge who helps me find ideas and reach financial goals.

      I’ve got a lot of assets and loans with Citi. I’ve been a client for 16 years. I’ve also referred a lot of business their way over the years. Would you believe it, they actually take me out to ball games and send me gift certificates to steak dinners as well. For a related post, check out: How To Get The Best Mortgage Rate Possible

      Does your banker not do the same for you?

  13. PatientWealthBuilder

    I don’t have a financial advisor because I have all of my money with an online brokerage. Its been fun to not have one because I think they would convince me to go off my plan.

    I do agree though – you should share your goals and make your financial advisor work for their money. I worked for a stock broker as an intern a couple different times in my college years and was amazed at how many clients just let the broker trade their account and never told him what they wanted. He had almost a thousand clients and many of them didn’t contact him during the year!

  14. I was wondering if you’ve looking into the EBAY 6% Note, due 2056. It’s currently trading at the issue price of $25/note and seems fairly liquid. While not tax exempt, it seems that there is little downside at or below $25/note/

  15. Sam, great ideas on how to get the most from your advisors! You are right, if you are going to pay someone a fee to give you advice and invest your money, it’s your job to make sure you are getting as much service as you can from the relationship.

    I’ve never used an advisor as I enjoy doing it myself and I keep things pretty straightforward as well. Primarily a portfolio of index funds which I rebalance once or twice a year.

    I have taken advantage of free initial consults with financial advisors that they provide through my employer just to make sure I am not missing anything. So far so good! I’m a DIY type of guy.

  16. Adam and Jane

    Glad to hear you are getting value from your wealth mgr.

    We dont have a financial advisor. I dont see a need to pay someone 1-1.5% to manage our money since we are SO financially conservative.

    2/3 of our muni bond portfolio are in 3 banks so we had to use the bank’s “financial adivsor” to purchase the individual muni bonds. All 3 of them are financial salesmen. After they make you take a standard risk assessment test then the sales pitch starts. It never fails. All three tried to sell annuities, bond funds, mutual funds and then life insurance to us! They dont make money from selling individual muni bonds. We always hand pick each individual muni bond.

    Our remaining 1/3 of muni bonds are in Fidelity which is our last brokerage account created. After several years of buying bonds, we learned that banks charge at least 2% more per muni bond compared to self service brokerage like Fidelity. For example, a muni bond at Fildelity may cost $100 PAR but it would be $102 at a bank. We NOW only buy our munis in Fidelity and will transfer the money from the banks when the bonds there are called or matures.

    We have a simple goal. To be financially independent via a conservative path. We had one financial advisor recommended a wealth account and a conservative muni bond fund. Each account started with 100K each. Well, several years ago, both accounts lost 9K combined. we had enough and cashed out. That year we earned 45K from our individual muni bonds minus 9K lost is 36K triple tax free earned overall. That 9K loss was our financial education. Trust NO ONE and never do that again!

    Now, we ONLY buy individual munis in Fidelity. I think we are doing OK on our own. With our muni bond portfolio, future pensions at 55 and 401Ks at 59.5, it will generate passive income 3.3 times our yearly expenses.


    1. I also hate losing money and thought about converting to bonds from a bond fund. What criteria do you use when hand picking munis?

      1. Adam and Jane

        My Muni bonds criterias

        1. Ratings is extremely important. I tend to avoid investment grade which is a B. I look for bonds that are rated a min of upper med grade (single A).

        Best quality – AAA
        High Quality – AA
        Upper Med Grade – A

        See this site for the ratings chart –

        2. Buy what you know.

        I like MTA (mass transit), water, Dorm Authorities for schools and hospitals. Make sure the school and hospitals are well know. People will always need these facilities. Bonds will vary from state to state so buy what you know in your state.

        3. I only buy Revenue Bonds. I avoid GO (General Obligation) bonds. With revenue bonds, municipalities can increase revenues to pay back bond holders.

        4. Tax exemption. Make sure it is totally tax free. Check the bond details.

        Federally taxable – NO
        Subject to AMT – NO

        5. Insured

        If a muni bond is insured then the bond is safer. Insured bond are tough to find and they are usually a bit more expensive.

        6. YTW (Yield To Worst or Yield To Call) greater than 4%. In a 33% tax bracket, it is like a 6% CD.

        YTW is the min the bond will earn when a bond is called. Most bonds are callable after 10 years of being issued so I dont really pay attention to maturity date. Bond prices are currently dropping so I like to buy bonds in x amounts. Dont spend all your money on just one bond. Currently, I can easily buy a 4% bond below PAR. I am hoping to get 4.5% YTW next and then a 5% YTW bonds in the near future. In the end, just be happy with the yield and dont go crazy if the bond price drops. If you hold the bond until it is called or matures then you will get the face value back to avoid lost of principle except for the premium paid.

        7. Call dates, mature dates and month interest is paid.

        You can buy bonds with different call dates and maturity dates to create a bond ladder. This way your bonds will return your principle at different years so that all of your money is not locked to a specifc year.

        I also look for bonds to pay on different months of the year so that I will get bond payment every month. This is not a show stopper but it is nice to get payments every month.

        8. Price of the bond.

        Try to buy bonds at face value of $100 (PAR) or less. If you have to pay a premium then pay at most 1-2 dollars. For example, a 4% bond at $102 will take 6 months to break even. When this bond is called or matures, only the face value is returned to you. If you paid a premium then it will result in a lost of principle. This is not a big deal if especially you are happy with the yield and the interest you received.

        Let me know if you have any additional questions.


        1. Great info! You’ll love an upcoming post I have regarding zero coupon municipal bonds. You can copy and paste this comment there if you’d like.

          One question, GO versus revenue. GO is backed by taxes, which cannot be escaped. Revenue bonds is backed by the operational revenue of the system e.g. train fare. What if the train blows up and loses all its revenue? Isn’t that much more risky?

          1. Adam and Jane

            I am looking forward in reading your upcoming post on zero coupon muni bonds! My co-worker told me about them in 2008-2009 but I was not interested because I wanted interest payments through out the year and not just when the bond matures. We needed passive income to cover monthly expenses in case I had to quit due to a bad re-org or get laid off. I guess it is personal preference.

            I started out buying GO bonds because they were backed by taxes. Many thought that GO bonds were safe too until issues in Detriot and Puerto Rico. As a result, I now buy REV bonds. To be on the safe side, one can buy a mixture of GO and REV bonds but it comes down to financial stability of your state.

            What you said about trains blowing up to lose revenue can happen. Accidents do happen like we have seen recently in Hoboken NJ or with NYC Metro North train that derailed in 2013. I would think that Mass transit is insured too. There are millions of people that depend on mass transit so it may be risky but I dont worry about it. There can be natural or man made disasters too.

            In general, muni bonds are quite safe and rarely defaults but we can survive if we lose all of our bond principle. That is why we have 3 separate streams of income from munis, pensions and 401Ks. Each stream covers our expenses. If we lose 1 or 2 streams of income then we are still fine.


        2. Great post Adam. Thanks for sharing you experience in so much detail. Just started looking at bonds.

        3. MuniBondGuy

          I have worked in the municipal bond industry (trader/sales) for almost 2 decades at a major bank. One major misconception is buying high premium bonds. High premium bonds contain deep in the money call options and tend to provide significant downside protection in a rising interest rate environment. If you buy a 30y bond with a 10y call at a significant premium, there is a high likelihood, your bond will get called in 10 years. If you buy a low coupon bond you will likely own that bond for 30 years at a below market rate if rates rise. Given rates are still at close to all time highs, i recommend buying bonds with high coupons. Also, if you buy a bond at par and need to sell it in a higher rate environment, they are less liquid as discount bonds create taxable income for the next buyer of your bonds. Institutional funds (Vanguard, Fidelity, etc) will generally only buy premium bonds for these reasons. Par bonds are only sold to retail investors to make them feel better about not paying a premium.

        4. This is really helpful information. Thanks for sharing your knowledge in such an easily digestible manner.

  17. I hired a financial advisor 3 years ago after about 25 years doing it myself. Why? First, I just felt that my investable assets were getting considerable, needing more expertise and time than I had to diversify, allocate and manage tax impacts (i.e., harvesting). I’m also getting closer to retiring 2-3 years, at the age of 55-56 so my days of contributing are limited so I want to make sure I’m invested right to take distributions from gains rather than the principle.

    When I was researching advisors, I narrowed my list of 10 down to 3 through my own research of FINRA, SEC and Google. Then I interviewed the 3 finalists and asked if I could speak with a few of their current clients.

    I finally selected my advisor after about 6 months or more of research and have a good relationship with them and meet with them quarterly at least. They are very proactive about calling out and having client phone conferences during market turmoil or major events (i.e., Brexit). I’m analytical by nature as I’m in technology management but also have a degree in finance. We often have very good discussions as I have a good understanding of personal finance.

    I don’t like paying fees as much as the next guy and I continually press my advisor on not only their fee but that of fund fees I’m invested in by using Personal Capital to see how much I’m paying. Currently I’m paying .5% assets under management, annually and paid quarterly.

    I will definitely use the suggestions in this post to maximize my financial advice. Thanks for the insight!

    1. Well done being so thorough in your financial advisor selection process! That shows you care massively about your money. It’s so funny how people can more time researching a pair of jeans or a car than on researching about money related things.

  18. Does anyone here use “Vanguard Personal Advisor Services”? They charge 0.3% and they can lay out an investment plan. I tried Betterment but i am looking for someone who can help me with after tax money?

    Sam, thanks for writing this(every) post.


    1. No problem Srini. I’ve heard good things about Vanguard PAS. So cheap, with the cheapest funds, and a person to talk to. It’s worth setting up an exploratory consultation.

  19. The Green Swan

    I’ve never thought about using a financial advisor. Usually I do the research myself or consult with my brother (with no fees!) Whether you use one or not, goals and benchmarks are clearly important. When going the individual route it works to still write them down and make them evident to yourself. Helps you stick with them!

  20. Jim @ Route To Retire

    I actually hired a financial advisor for the first time a few months ago. However, I did it with the intent of it being more of a one-off kind of event – someone to basically review my plan and check my work, so to speak.

    Even though he did agree with most of what I’m doing (*sigh of relief*), his suggestions on some changes he wanted me to make made me want to work with him down the line. I don’t think I need him on a regular basis, but I will be working with him every couple years now to review where I’m at and see what changes he thinks should be made.

    — Jim

  21. I haven’t used a financial advisor before except for briefly to help set up my self employed retirement accounts if that counts. I’ve always placed my own trades and decided when to rebalance, etc. But I can definitely see the benefits of having one for those less familiar with the martkets or who don’t want to be bothered with keeping track and making trading decisions, etc.

    You bring up a really good set of points in this post because I can imagine a lot of people who do utilize financial advisors aren’t proactively reaching out to them and keeping them updated of their goals. I was talking to one of my friends who has an advisor and she had no idea how her portfolio was performing and hadn’t talked to her advisor in over a year. Just bc she doesn’t want to manage her own portfolio doesn’t mean she shouldn’t be regularly aware of how it’s doing and what actions if any her advisor is taking. She’s paying for him to manage it so she should get her managament fee’s worth and get regular updates.

  22. BooCoo Money

    Hello Sam

    Excellent Post….. But I do have a question. For the past 5 years I have been my own financial advisor. I have been beating the S&P 500 for a few years now which is pretty awesome, but I’m really getting tired. I would like to allow a financial advisor in charge of my portfolio, but I feel like there interests are always to make another buck instead of looking out whats best for me from past tense experience. Plus I have enjoyed the next to nothing fees. What do you suggest? Is a financial advisor the best solution or should I just continue doing what I’m doing?


    1. Hard to say as I don’t know what your overall financial situation is and goals.

      You can always farm out a portion of your investable assets in the beginning to see how you like the experience and how they do. If you like them, send more assets their way.

  23. I don’t use a financial advisor right now because I like (and have the time to) manage my own money. A lot of the times I find that the fees are absolutely crazy. My friend’s dad uses an advisor that charges $50 a trade!

    “Create some incentives for your financial advisor”–Great Tip. I had a friend that worked in Goldman’s wealth management business and he said some clients would always dangle money over his head. It certainly made him work harder to get their business!

  24. Justin Pogo

    Great post Sam! As someone who works with financial advisors daily you hit a number of things right on the nail. You mentioned you speak with your advisor weekly- are the one initiating the contact or is he/she?

    1. It’s both really. He sends me ideas every month, and I inquire about ideas a couple times a month at least.

      There are endless investment ideas. It’s all about screening the best ones, talking things through, and investing to the best of our abilities.

  25. As always, great article.
    Yes, I use a Financial Advisor, but only for roughly 50% of my assets. But as mentioned in your article, two things differentiate me:
    One — he knows about all of my assets, not just what he manages. So my over all total picture can be better managed knowing what I already own, my thought processes, etc.
    Two — yes, I speak to him often. Not monthly, but at least every other month to keep him updated on my life…. my wife retired recently; he shifted the focus. He knows I’m wanting to retire, so his managing style reflects that.

    I use Personal Capital as well (free access only) and it doesn’t properly allocate some of my assets. Bonds. Which makes using it tougher than it needs to be.
    If I can spend money in other areas of my life, why not here with a Financial Planner?

  26. Great article! I don’t use a Financial Advisor as I also enjoy making my own investments and I have the time to do so. I also don’t enjoy paying fees if I can help it :-)

    Recently after reading your article on venture debt investing, I started to look at more alternative investments to diversify my portfolio. Do you have any suggestions on how to best find and get access to alternative investments? is it easier through a wealth management firm or financial advisor?

    I am referring to venture debt, early stage vc, private equity, structured settlements, royalty purchase funds etc, I meet the qualified purchaser status. So far I’ve just been googling and emailing funds individually. Thanks Sam!

    1. Hi Danny,

      Perhaps a good place to start is Angelist. They’ve got endless private deals there. All my private deals have been made through my network now that I think of it. But, there are also platforms that allow you to invest in private deals like CircleUp, Fundbase, etc.

      I’m really focused on real estate crowdsourcing currently, especially as yields rise.



    I had a financial advisor for years, and I must admit I didn’t do any of this. I’m sure he loved me. We met once a year in which I never asked any questions, probably because I didn’t know what my goals were. I ultimately got rid of him once I found out how much I was paying in fees! I manage my own investments now, with exception of my 401Ks. I’ve started using Personal Capital, but have not taken advantage of their financial advisors. Given that I don’t have a ton of money to invest, I think I do pretty well on my own. As my portfolio grows and I become less willing to actively manage my investment, I’m sure I will be on the look out for a good financial advisor. These are all great tips and I will definitely keep it bookmarked for the future.

  28. Great post!! I have always wondered if 1% fee was to much glad to know that is your fee also. I invest through Edward Jones and my advisor does a great job of keeping me up to date. I will be using a more focused approach the next I talk with him. Thank You!!

  29. My work has some sort of contracted advisory firm on 401 k accounts which is always hounding me to use them. I largely tune them out because of their Half a percent fee and instead do it all myself. It doesn’t help like you indicated they’ve never spoken to me so how would they even know muy goals. Still I get the value. If I needed one I’d probably spend a fixed fee every few years for a evaluation of my situation rather then a retainer version. Then your right though, ensuring they know my goals is the critical piece.

  30. Matt @ Distilled Dollar

    Great ideas and suggestions! I’ll have to incorporate some of these on my next round of conversations.

    The overall advice here is golden: have clear goals and set benchmarks.

    I go to one guy to bounce ideas off of and make sure I’m covered for insurance. I find that when I update my guy on personal goals, he tends to think, “Oh that’s nice, but here’s where the real game plan is.” He then gives me the standard advice on saving to buy a home ASAP. Sensible advice, but not as tailored as I would prefer.

    I’m surprised you didn’t mention fiduciary in your post as this is a pre-req to having a sensible discussion with a financial advisor. One warning though, I just learned people can be registered as dual agents, where they are a registered fiduciary AND they can promote their own products. To anyone reading, make sure your advisor is a fiduciary AND not a dual agent.

  31. Go Finance Yourself!

    I don’t have a financial advisor. I utilize Wealthfront for the bulk of my after-tax portfolio. Earlier this year I had a financial advisor call on me. His fees started at 1.5% and he was pushing a permanent insurance policy on me that didn’t meet my needs. When he wasn’t able to give me a good explanation of how he would earn his fee year after year, I told him I wasn’t interested. With all the resources currently out there, I don’t see the need for anyone with a little bit of financial knowledge to pay 1.5% to an advisor. From what I’ve seen, in many cases you may get your money’s worth with the initial setup, but after that the advisor is just collecting their healthy fee without really doing much.

    If you’re making big enough trades, then I definitely see the value of having something like the Citi advisor who will keep you informed of what’s out there and will just charge a fee to make the trade. Definitely something to look into once I get my after-tax portfolio built up. Thanks for the interesting post!

    1. A whole life insurance policy is the most lucrative commission paying financial instrument a financial advisor can sell to his/her client. It’s OK if you have a top tax bracket income, maxed out all your pre-tax accounts, are on track to pass the death tax limit, and have money coming out the wazoo. But for most people, it’s best to just stick with a term life insurance policy.

      The other benefit of paying a financial advisor is that s/he can get you in investments at a lower preferred rate. Finally, if you simply don’t know what you are doing and come into a large sum of money, you could easily blow yourself up by more than 1-2% by making some ill-advised investments.

      Pros and cons!

      1. Go Finance Yourself!

        He was selling the whole life policy pretty hard and I assumed it was because of the high commissions. I’ll admit I was tempted until I dug into the numbers further. It didn’t provide near the return he was touting and I didn’t need anywhere close to that level of insurance.

        Agree on your financial advisor points. In some cases they are a good deal. Mostly if you have a crap ton of money, aren’t motivated to do it yourself or don’t know anything about finance and don’t want to learn. For the vast majority though, I don’t think their situation changes enough to warrant the high yearly fees.

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