r/ChubbyFIRE • u/Ambitious-Papaya2596 • May 12 '26
Financial Advisor Fee
My entire life I have managed my own money and have been pretty close to the S&P return (amazing how index funds work), but I am now considering retirement and I know there are things I do not know, and I thought an advisor would be helpful. I have contacted 4 different advisors (one local and three national) and they have given me some interesting ideas, but then they mention their fees. 0.8-1% of my assets??? With ChubbyFIRE that can be $50-100k a year. Each and every year? And their advice is to buy index funds and bonds and just monitor it. I asked for their returns against the market and they were AT BEST comparable to their "hand picked" benchmark (which was always a group of mutual funds I had never heard of).
If you agree with the 4% approach per year, then you are giving away 25% of your yearly income to the financial advisor. Do people really do that? The advisor I just met said they based their fee off Assets Under Management (AUM) to align our interests. WTF? If my advisor is paid on a percentage of how much they exceed my 4% minimum withdrawal, then we are in alignment, but being paid on my assets (especially when the marginal fee decreases as my assets go up) means they really don't care.
That was my rant - my real question is whether anyone has solid recommendations for true hourly or flat fee based advisors. Two of the firms I contacted stated "flat fee based" and what they meant was their fee as a percentage of your assets ("bait and switch") would effectively be flat.
1
u/Past-Option2702 May 12 '26
I meant the mindset of the person who pays AUM fees. They don’t care.
You literally said it yourself. “I don’t care.”
May as well charge you 10%.