A breakdown showing how a financial advisor provides services far beyond any fees charged
Why pay fees to financial planner companies when you can do it yourself, right? Except, there are cost benefits of using a financial advisor that go beyond merely increasing wealth and financial gain. Strategies like risk management, improving your happiness, timeliness, and behavior management can make using a professional financial planner worthwhile.
When we meet with prospective clients, the elephant in the room is usually fees. The plain truth is, some financial impacts are harder to measure than others. In 2015, Michael Kitces endeavored to quantify these values in the Kitces Report, Vol. 3. Including data from Vanguard, Morningstar and others, the report analyzes the potential quantifiable benefits you may gain that go way beyond any fees charged when you work with a financial advisor. Additional benefits are:
*Results may vary and cannot be guaranteed.
To help you visualize the benefits, the chart below aims to quantify financial planning strategies and their potential impact:
As you can see, the cost benefits of some planning recommendations are quantifiable, like tax-advantaged strategies. Others, like improved saving and spending habits and general financial advice, are harder to assess. The Kitces’ Report chart and article provide some context on how a financial advisor’s skills may add value that may not be possible when you do your own planning.