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Is a financial advisor worth it?

Pay an adviser for a decision you will not make well alone. Skip an ongoing percent when the job is one fund you will leave alone. Price the fee in dollars.

The short answer

Pay an adviser when you are about to make a decision that is hard to undo, and you will not do the work yourself. A rollover, a pension choice, the year you retire, a death, or a large block of company stock are that kind of decision.

An ongoing percent of assets is a weak buy when the portfolio is already one target-date fund and the adviser will leave it there. Turn every quote into dollars first. If the brochure says 1% and the account is $500,000, the fee is $5,000 this year. That math is the test. A promise that the adviser "pays for themselves" is not.

What to do

  1. Write one sentence: the decision you need in the next year. If you cannot name it, you are shopping for a relationship, not a job. Pause and name the job.
  2. Get the yearly fee in dollars on your balance. Use the advisor fee calculator with the rate from the brochure, not a rate from an ad. The categories on the filing are explained in how much a financial advisor costs.
  3. Open Search and read two firm pages.
  4. On each ADV panel, open Item 5G. Item 5G lists the services the firm says it offers. If the work you wrote in step 1 is not on that list, the fee buys something else.
  5. Ask what you will hold in your hands: a written plan, a managed portfolio, or both. A portfolio-only service does not answer a pension question. If the choice is how they bill, see flat fee vs AUM.
  6. If the decision is a workplace-plan rollover, read the rollover FAQ before anyone moves the money. Ask for a written comparison of staying in the plan versus rolling. Pay that rises only if you roll is a conflict, not a reason to hurry.

What to look for on Best Investors

  • Item 5G, matched to your sentence. Financial planning and portfolio management are different boxes. Hire the one you named.
  • Item 5E, matched to the bill. A percent, a fixed fee, and hourly charges are different ways to buy the same decision. The checkbox is not the price. Item 5E is the map.
  • AUM on the firm page. Assets under management are a size figure from the filing. They are not a return, and they are not proof the firm is worth 1% of your account.
  • Item 11. Read disclosures because they are facts about the firm. A blank Item 11 is not a reason to hire. See how to read Item 11.

Common mistakes

  • Hiring because a friend said the adviser beat the market. You do not have that track record in Form ADV, and this site does not audit one.
  • Paying a percent every year to hold a single target-date fund you already own inside a workplace plan.
  • Judging the firm by assets, headcount, or a city ranking. Those are not the decision in your sentence.
  • Accepting "about 1%" and never multiplying it by your balance.
  • Skipping Item 5G, then learning later that tax work, a mortgage question, or estate documents were out of scope.
  • Rolling a 401(k) in the first meeting because the fee sounds small next to the account.

Related questions

Which decisions are worth a fee?

Staying in a workplace plan versus rolling out. Taking a pension as a lump sum versus a monthly check. When to claim Social Security. What to do with a large block of company stock. What a surviving spouse should do with the accounts in the first months. A target-date fund does not make those calls. A person might. Get the answer in writing, with the fee beside it.

What if I only need a plan once?

Buy the plan. A fixed fee or an hourly project can end when the document is done. You do not have to buy a permanent percent to get a binder. Ask the firm to price that project alone.

Will a good adviser earn more than the fee?

Nobody on this site can promise that. Markets move. A written plan can still be worth the fee if it stops a mistake that costs more than $5,000, even when the portfolio return is ordinary. Judge the quote against that mistake, not against a slogan.

Is a robo-advisor enough?

For a plain portfolio you will leave alone, a digital program can be the whole product. Read the scope before you assume it covers a rollover or a retirement paycheck. See financial advisor vs robo-advisor.

Limits

This page does not tell you to hire or to skip an adviser. It is not legal or investment advice, and Best Investors is not the SEC.

The firm filled out Form ADV. We do not audit assets, fees, performance, or Item 11. The $5,000 example is 1% of $500,000. It is not a typical fee and not a forecast of what you will pay.

If our page and IAPD disagree, use IAPD.

Sources

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