Skip to main content
No. of Recommendations: 1
So (1) it is not a 6-figure income in any convential sense of income, (2) the couple is paying $10k on less than 90k of income (or 11%+) to their financial advisor, and (3) they are advertising (or allowing their financial advisor to advertise) that they are "fish" happy to be eaten by the sharks????

I'm not sure I'd measure their financial adviser's fee as a percentage of their income. I'd be more inclined to measure it in terms of the return he got for them, and that is different than income. For instance, I have a financial planner, and I pay him a percentage of the assets under his control. I still have other assets that I manage, and I have income that has nothing at all to do with his services.

I measure his performance on if he does better than the market and, more importantly for me, if he does at least as well as I have done with the assets under my control.

For the people in the article, we don't know anything other than what they say they had as income, which seems to actually include money from savings as well as return of capital in the form of their cost basis. We don't actually know what they have for assets that are being managed by their FA. If, for instance, they have a million dollars of assets invested and the FA managed to get a 6% return for them, but they would only have been able to get a 3% return, then I can see where they FA would have certainly earned his fee. I'm obviously making the numbers up, but it does appear to me that we are not seeing anything about the returns he got for his clients, and that is what the FA should really be getting paid to do.

They don't necessarily need to harvest all the capital gains that the FA got last year. They only needed enough for their living expenses.

There's just too much missing from the article, and the parts that are there are not making sense.
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.