Updated 5 months ago on . Most recent reply
Do I (we) need a financial advisor?
Hi everyone,
Need some feedback from you who have experience in this department. Do my wife and I need a financial advisor (or anything in that realm) this early in our careers?
We currently have 1 primary and 2 LTRs. I do plan on growing the RE portfolio and want to make sure the next moves are savvy.
We have decent 401ks, and limited liquid funds in savings...
Thank you for your time
Most Popular Reply
Armando,
I think it depends on where you are starting from. Looking back, I think I got into using a financial advisor too early in my journey. The disadvantage is that they were assets under management group. Which means I paid a lot of the money in fees until I found out I was paying a lot. Remember with such a provider, the less money you have under management, the more you pay as a percentage in fees, so for a start, I was paying 2.5%. This happened in a good and bad year. It was not until I asked that the fees were dropped to 1% and even that is a lot when you zoom out to over 15 years.
Also, many do not know much about real estate and are unwilling to advise on taxes as they are not tax professionals. Your benefits for having one are guidance on portfolio set up, consult for total financial checkup, and development of trusts through a legacy attorney for your family. All these are very necessary which is why I think if I must do it over, I will go the route of fee for service, not asset under management.
In financial terms, having asset under management CFP is like a very healthy person with a low-deductible insurance which means you pay high premium every month for something you hardly use. While fee for service is like having HSA which grows while invested for years and is still there when you need it.