How much does your bean counter charge?

bigtiller · Mar 3, 2015

Mine charged a flat rate for 15 years and then changed to .15% per year of the invested amount in my 401K, which more than doubled the charge. Now he wants to change it to 1% which will be about 6.6 times the amount of .15% charged for the same work.

So in dollar terms, it went from $46 to $150 and now $1000 every quarter. And he is not even a broker or an adviser, he is a planner!

How much does your guy charge?

MossRoad · Mar 3, 2015

I'd ask him why the invested amount in your 401K has anything to do with his services? Whether its $100 or $100,000 its just a number he has to plug in to a spread sheet. Sounds like he's sticking it to you. Get another accountant.

2458n · Mar 3, 2015

I would say your man has picked up some bad habits and needs a way to pay. How did he justify the change to .15. Must have had some bad planning if he had to now go to 1%. If he can not run his operation ,why would he be handling yours. At least YOU THINK ALL YOUR MONEY IS SAFE. WAIT TILL YOU TRY TO CASH OUT AND MOVE ON.

bigtiller · Mar 3, 2015

He told me that 1% per year is the standard fee for accounts under 500,000

Sodo · Mar 3, 2015

bigtiller said:
He told me that 1% per year is the standard fee for accounts under 500,000

This isn't a bean counter this sounds like a portfolio manager.

Basically he's finding that he has to get rid of the accounts that don't pay for his time, which he now thinks is worth ore than it used to be. Maybe because he's doing well.

It really depends how he's doing, what kind of return he's getting for you. Asking on TBN is one thing, but if you can find other clients, who have been there for awhile (and thru the wild ride of 2009, and ask them how they came out) you will find out what you need to know. I see 1% as reasonable for a guy who can get you about 4-5%. Merrill Lynch charges 1.2% for $1M, I bet 1.5% or more for $500,000.

Other financial planners are dying to get ahold of your money, why don't you interview some? They will certainly tell you their rates. Go ask Merrill Lynch.

randy41 · Mar 4, 2015

its not very clear what this guy does for you.

fishheadbob · Mar 4, 2015

Sodo said:
This isn't a bean counter this sounds like a portfolio manager.

Basically he's finding that he has to get rid of the accounts that don't pay for his time, which he now thinks is worth ore than it used to be. Maybe because he's doing well.

It really depends how he's doing, what kind of return he's getting for you. Asking on TBN is one thing, but if you can find other clients, who have been there for awhile (and thru the wild ride of 2009, and ask them how they came out) you will find out what you need to know. I see 1% as reasonable for a guy who can get you about 4-5%. Merrill Lynch charges 1.2% for $1M, I bet 1.5% or more for $500,000.

Other financial planners are dying to get ahold of your money, why don't you interview some? They will certainly tell you their rates. Go ask Merrill Lynch.

I agree. 1% is relatively standard. While you can do better or worse on fees, the important thing is how does your guy have your portfolio structured . Is it inline with your age and your risk tolerance ? Are you a riverboat gambler type, or are you a safety first, no risk investor ? First thing I'd do is set up a meeting with your guy to discuss your concerns; for $4000 he can buy you a pretty good cup of coffee, plus he gets to write it off. I would certainly ask him about his fee increase; if he raised your fees he also raised a lot of other people. Some of them walked on him, some of those who walked he was glad to see go, and some of them he misses the $4000 or whatever he used to get. He may cut you a deal, or he may get you to think 1% is a bargain for you, I certainly don't know.
If you want to cut him loose ask people in a similar boat about their experiences with financial guys and start interviewing them. $400k makes you pretty attractive.

buckeyefarmer · Mar 4, 2015

I count my own beans.

Clay45 · Mar 4, 2015

If your accountant hadn't increased his/her fees in 15 years I'd be surprised they only doubled them. Obviously they are structuring their fees to accomodate the majority of their client base. While you can certainly negotiate you need to first decide if you are satisfied with their performance and make your decision to leave or stay based upon that.

MoKelly · Mar 4, 2015

I would never, ever pay a guy based on the market value of your portfolio. In my opinion, its a bad model.

There are plenty of advisors who will bill you based on hours worked on your business.

Also, I recommend separating your advisor from the firm you use to execute trades.

Conflicts-of-interest can be great in the financial world. Conflicts-of-interest are rarely helpful to the person paying the bills.

MoKelly