Is paying a 1% wealth management fee actually worth it?
Paying an expensive annual percentage fee can cost thousands of dollars out of pocket while underperforming compared to similar portfolios. This makes investors question whether their advisor is actually worth the cost or if they should switch to a lower-cost brokerage like Schwab.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1managing investments independently
- 2reading the personal finance wiki
- 3hiring a flat-fee or hourly fiduciary advisor instead
- 4Switching to a self-managed brokerage like Schwab
- 5Transitioning to a low-cost Boglehead index fund portfolio
- 6Searching online financial forums to learn about advisory fees and firm performance
- 7Using broad market indexes and a 3-fund index portfolio
- 8Putting retirement money into dead-simple target date funds
- 9Paying a flat hourly rate or a one-time fee for specific guidance like tax management or estate planning
In their words
Unedited, most upvoted first, each linked to the thread it came from.
“I felt queasy about giving 1% of our total balance annually. For us, that’s $14k right now.”source ↗
“When it was $40K no problem. When it was 7 figures, I did not want to make a stupid mistake that would cost 10’s of thousands of dollars. I sleep better.”source ↗
“Been with Edward Jones for almost two years. He started off producing returns in the teens for a 80/10/10 portfolio. The 6 months or so they have fallen to 10% for the almost 2 years, 8.44% and 7.4% year to date.”source ↗
“When I compare similar portfolios they are at least 3.5% higher and some much higher.”source ↗
“I'm thinking about going to Schwab but don't want to be unreasonable and jump the gun. Am I giving him enough time.”source ↗
“When is a %fee advisor worth the cost and what services should they be providing?”source ↗
“I feel like I can run projections for the likelihood that I have enough to retire. But how to balance things such that if one sector goes down others can go up and the overall portfolio doesn’t crash.”source ↗
Where this came up
People with this problem also raised
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