Here is a good article you should read, especially if you’re considering hiring a financial advisor. But I don’t think it actually goes far enough in examining the fees for service financial advisors charge.
Some firms/advisors charge low fees and offer “comprehensive financial planning”. Other firms charge higher fees and also offer “comprehensive financial planning.”
Which should YOU go with? Well, if both firms are offering the same advice, it would make sense to go with the lower cost, right? Well, is the lower cost firm actually offering “comprehensive financial planning?”
That’d be like a mechanic saying he’s going to maintain your vehicle for you for a fee, but what he really only does is oil change and rotate the tires. A different mechanic though also says he will maintain your vehicle for you but he does true full service, belts, brakes, alignments, spark plugs, filters, engine maintenance, truly the whole thing…but, of course, he charges a MUCH higher fee.
However if you are ignorant about vehicles and just hear the term “full maintenance” which mechanic are you likely to employ?
It’s the exact same scenario in the financial advisory realm. And yet, like if you hire the cheaper mechanic you won’t know what true services you didn’t receive until the car breaks down in the middle of the Mojave desert.
In financial planning, you will realize the services you neglected to receive at the worst possible time; Death of a loved one, and the beneficiary designations were not changed from 25 years earlier, a debilitating illness where you have no way to act the afflicted’s behalf, when your retirement plan begins to skid off track and it looks like you’re going to have drastically cut back or run out of money, when the taxes you pay increased substantially because your RMDs have jumped and now your Medicare premiums go up double, even triple…etc.