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When it comes to financial advisors, many investors wonder how much they should be paying in fees — and whether it’s worth it. There are several fee structures to choose from (as well as the option of doing it yourself). So how do you know which option works best for you?
Take Josh, for example. His financial advisor is managing a $300,000 portfolio. So far, the returns have been a whopping 30% but Josh is also paying a 2% fixed fee to his advisor.
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That adds up to $6,000 in total fees annually, though as his total invested assets increase over time, he’ll pay more. Assuming he didn’t invest any more money, the cumulative fees paid on a compounding 30% return over 10 years mean his advisor would earn more than $220,000.
While Josh is happy with the performance of his portfolio, he knows it’s…
