Financial advisors typically charge fees based on various structures, including hourly, flat, or a percentage of assets under management. A common rate is around 1%. Clients should feel comfortable discussing fees with their advisors and seek alternatives if unsatisfied. A real-life example underscores this: one client was upset paying $922 of their $2,330 gains – a fee that amounted to 40% of their portfolio's profit, highlighting the importance of transparency in fee structures before entering a financial advisory agreement.
If you're uncomfortable with your financial advisor's fees, it may be time to have a talk or find someone new.
It's important to understand how your financial advisor gets paid before signing up to work with them.
Some charge an hourly fee for guidance. Others charge a flat fee. Another common fee model is to charge a percentage of assets under management.
One advisor in the Reddit post charged 40% of the gains, which left the client unhappy despite the advisor's strategy earning them money.
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