Below is an excerpt from an email I received from a financial advisor who regularly reads this blog. His comments were in reference to last week’s post which highlighted a few sources for finding a fee-only investment advisor or financial planner:
Regarding fee-only advisors, I really hope you will highlight Jonathan Chevreau’s comments which were posted here http://network.nationalpost.com/np/blogs/wealthyboomer/archive/2009/02/12/where-to-find-a-fee-only-planner.aspxYou know as a former advisor that a “fee-only” advisor who charges their client 1.5% of assets is no different than the majority of your former colleagues who would happily offer the same deal.Drill down into the numbers and I think you will find that the vast majority of the advisors listed here http://www.canadianbusiness.com/my_money/planning/article.jsp?content=20080310_110229_7096are actually more expensive for the typical client. Ok, fine to say you charge 0.5% on assets over $2,000,000 – but the vast majority of clients are in the $250 to $500K range. It’s a bait and switch – advertise a very low percentage of assets for the one or two accounts they have that are big, and then charge the majority of their clients more than they would pay with most brokers.I really like Jonathan’s article – but I will bet you that very very few of the advisors listed in Duncan Hoods article will ever reference it.Keep up the good work.