When you’re doing well financially, paying advisor fees might seem unnecessary. So do you need an advisor if you’re already in a good place?
Having a successful retirement isn’t just about not running out of money; it’s about what more you can do.
Through a real-life client story, I explain how having an advisor’s perspective to implement the right strategy can be more valuable than the cost of their fee.
Advisors can help you avoid biases in the way you invest and plan. They can ensure you have the right withdrawal strategy and don’t overpay on taxes. When handling finances for yourself, you may worry about what you could be missing. A good financial advisor will give you peace of mind, knowing you have all the right information.
It’s important to reframe your thinking: Is the cost of your advisor justified by the value provided?
Questions Answered:
What’s the opportunity cost of not having an advisor?
What value does an advisor provide when you are stable financially?
Timestamps:
0:00 Financial advisor vs DIY
3:37 Does an advisor add value?
8:30 Story of lost opportunity
12:27 Understand the bigger picture
13:41 Being ok vs optimizing
17:44 Risk of wrong withdrawal strategy
21:13 Risk of overpaying taxes
22:20 Continuity costs
23:27 The real goal
27:31 Appropriately compare
Create Your Custom Strategy ⬇️
When you’re doing well financially, paying advisor fees might seem unnecessary. So do you need an advisor if you’re already in a good place?
Having a successful retirement isn’t just about not running out of money; it’s about what more you can do.
Through a real-life client story, I explain how having an advisor’s perspective to implement the right strategy can be more valuable than the cost of their fee.
Advisors can help you avoid biases in the way you invest and plan. They can ensure you have the right withdrawal strategy and don’t overpay on taxes. When handling finances for yourself, you may worry about what you could be missing. A good financial advisor will give you peace of mind, knowing you have all the right information.
It’s important to reframe your thinking: Is the cost of your advisor justified by the value provided?
Questions Answered:
What’s the opportunity cost of not having an advisor?
What value does an advisor provide when you are stable financially?
Timestamps:
0:00 Financial advisor vs DIY
3:37 Does an advisor add value?
8:30 Story of lost opportunity
12:27 Understand the bigger picture
13:41 Being ok vs optimizing
17:44 Risk of wrong withdrawal strategy
21:13 Risk of overpaying taxes
22:20 Continuity costs
23:27 The real goal
27:31 Appropriately compare
Create Your Custom Strategy ⬇️
Ready for retirement. A listener wants to know if he's crazy for paying his financial advisor $25,000 per year when he thinks he might be able to do the same work on his own for free. So on today's episode, discuss ways to know if he's crazy for doing this, for continuing to pay his advisor, and I'll point out things you should look at to know if this cost is potentially justified. It's all coming up next on Ready for Retirement. This is another episode of Ready for Retirement. I'm your host, james Cannell, and I'm here to teach you how to get the most out of life with your money. And now on to the episode. Today's episode is based upon a listener question. This listener's name is Don, and Don submits the following. He says First off, I love your podcast and I've learned so much from you. To be honest, listening and reading as much as I have over the last year or so has emboldened me to realize that my current financial advisor makes much worse decisions than I have. Over a 10-year time period, all that I have done is work, put away money, raised a family and trusted that my advisor was making sound decisions. Well, now that the kids are grown and I'm slowing down at my job. I realize that I believe I can do all of this on my own for free instead of paying an advisor. Now $25,000 per year on average, as my assets have increased. I have a portfolio of approximately $4 million and my estimate that my expenses in retirement will be approximately $120,000 per year in today's dollars. Doing this simple math, I'm not too worried about running out of money. So my question is why not simply invest in the S&P 500 fund and keep it all simple, with about three years of cash reserves to weather and downturn in the S&P 500 fund, take from the cash from the markets down and take from the other assets from the markets up. Also, in the meantime, convert as much as makes sense from a tax standpoint to my Roth IRA from my traditional IRA. Does this seem like a sound plan? Thank you so much, don. Well, thank you, don, very much for that question, and I think you're probably asking a question that a lot of people have, which is look, as my portfolio has grown, as my assets have grown, the fee that I'm paying to my financial advisor has grown, and some of these things I think I might be able to do on my own. How on earth am I supposed to tell whether or not it makes sense for me to continue paying this fee at all, and at what point does it make sense to do it on my own or even potentially look for a new advisor to help with it? That's what we're going to be looking at Now.
Speaker 1:Here's what Don asked. He essentially asked does this seem like a sound plan? And to re-summarize his plan, his plan was take everything and put it in the S&P 500, have a few years of living expenses set aside in cash so that if and when the S&P 500 has some down years, he can pull from his cash reserves, as opposed to having to pull money out of the S&P 500. He's saying I know my portfolio balance is $4 million. I think I probably need about $120,000 to live on. This seems simple enough.
Speaker 1:What's wrong with this plan of me doing this on my own? This seems sound and reasonable to me. Well, I will agree with that, don, that it does seem reasonable enough and again, that's not advice or recommendation to go ahead and do that. As much as just saying looking at some basic numbers seems reasonable. But I would phrase your question a bit differently. Instead of asking is this a sound plan that I can do on my own for free. What I would instead ask is does working with an advisor add value to what I'm currently doing in excess of their fee? So it's not necessarily a mutually exclusive thing. Your plan can be reasonable and at the same time, it could potentially be valuable to work with a financial advisor. I'm not saying it is or isn't, and, don, I'm certainly not saying in your specific situation, it is or isn't. As much as I want to help provide a framework for how do you even go about understanding the potential value you're getting from a financial advisor versus what things could you simply do on your own? So what I would add to that is another way of asking this is does work with an advisor at value to what I'm currently doing in excess of their fee?
Speaker 1:At the end of the day, it's that simple. You could have a perfectly reasonable plan that you could implement on your own for quote unquote free, but that doesn't necessarily mean that there's not any value to pain and advisor to any extent to adding value above and beyond that. So just because you do something well doesn't mean you couldn't still do better with professional help. Now full disclosure here. I think a lot of you already know this. I am a financial advisor, so obviously I'm going to have some biases here, but what I'm going to try to do is help you to understand what should you be getting if you are paying any type of fee, and how do you start to look through this? Or we'd do this in a way that's beneficial to understanding what you personally should do. So just because you could do something well, it doesn't mean you couldn't still do better with professional help on the guarantee that you will, but it certainly doesn't exclude it.
Speaker 1:So I'm not going to reframe the question in Don's case and put it even more simply in Don's case, does my advisor provide value in excess of $25,000 per year? And here's why I want to start with that, don. Is is the question of is putting all my money in the S&P 500, the few years cash it aside? So that being the question asking, is that reasonable? That's a very different question, an entirely different question than can an advisor potentially add value in excess of his or her fee Few?
Speaker 1:Side notes before jumping in for today, number one there are good advisors and there are bad advisors. I will make no assumption, don, as to which type of an advisor you are working with. I don't know Don. I don't know his advisor, so I'm going to be speaking in generalities today. However, I do know and recognize that there's a wide spectrum of potential types of advisors you could be working with.
Speaker 1:Number two the second point I want to make is everyone has an advisor. So, as we're talking about the cost of working with an advisor, don't sit there and think, oh, why do this on my own and I keep up based on podcasts or reading or videos that I watch? Well, if that's the case, then wonderful, but you are your own advisor, so you have to hold your feet to the fire the same way that you would hold any advisor's feet to the fire is. Let's see how can we be objective about this, of what's the value we're getting from our advisor which for many of us listening, might be ourselves, and what's the cost of that advisor, which, for many of us listening, I'll say this some of the worst advisors I've ever seen are people who do things on their own and make horrible decisions that end up costing them dearly. Not a blanket statement, but just something that I think all of us need to be aware of that everyone has an advisor. And number three.
Speaker 1:The third thing that I want to point out before we get going is I want to quickly talk about what this episode isn't. There's a tangential question here, which is the way that advisors charge their services, whether that's an hourly charge, whether that's a fixed fee for services provided, whether that is charging based on a percentage of assets that the advisor is managing. All of these types of payments are perfectly valid, all have their pros and cons, but what they isn't today isn't a comparison of those different types of service models. So I know that could be derived from the question that Don asked, but I just want to acknowledge that that's a perfectly reasonable question. It's just not necessarily something I'm going to be going over on today's episode. So, with that being said, let's just jump in here and I'm going to try to make this podcast as much about general principles as possible, while using Don's question as a frame of reference here, also given that my experience is as a financial advisor. No, I'm going to have some biases that are going to come out here, so just recognize that ahead of time.
Speaker 1:Here's one more thing I actually want to add before we jump in. Is Don made the question or is someone insinuated in his question. He said look, I'm kind of okay. I run the numbers, I can look at my portfolio value, I can look at what I want to spend. I feel like I'm okay. I'm in a good enough position not to need a financial advisor.
Speaker 1:I want to reframe one thing and all again go back to my experiences here the people coming to us, the people working with myself and other advisors here at Root Financial. They're not coming to us because they're in dire financial straits and need someone to rescue them. They've typically done really well. They've got $3 million, $5 million, $10 million or more in their portfolio and they just want to make the most of what they have. They know that as their net worth grows and as their portfolio grows, they're really not satisfied with just doing okay. They want to fully optimize every aspect of their financial life and that's really why they're reaching out to us. They're wise enough to at least consider using an advisor to help them find opportunities they otherwise would have missed on their own and to avoid mistakes or avoid blind spots they otherwise might have fallen into. So don't necessarily think I'm going to be okay. Therefore, I don't need an advisor. Reframe it again, as is the costs of this advisor justified by the value that I'm going to receive? That should be the question that leads to all of this.
Speaker 1:Now I'm going to start with the story. I remember speaking to the prospective client and this was early 2020, when this client originally reached out to me. Their portfolio was pretty much all in cash. They had a handful of investments, but for the most part, they were all in cash, and they had been in cash for some time because they had previously had some concerns about a big market downturn, so they went to cash to protect against that. Now, when they came to me, they had about $3.2 million in their portfolio and what they explained to me was here's our portfolio yes, we're in cash. We're waiting for the market to pull back because that will present to us an opportunity to buy back in, and we went to cash a couple years ago. We would just feel kind of silly going back in now. Markets have gone higher the last couple of years. We're looking for the opportunity for the market to pull back 20, 30 percent or so. Then we're going to reenter the market.
Speaker 1:So we started doing some planning work and this was February of 2020, or thereabouts and what I did is I laid out a retirement strategy, I laid out an investment plan, I laid out a tax plan and I gave them a proposal. I walked them through what all that would look like and I quoted my fee to them, and at that time, my fee would have been about $22,000 per year, so a pretty significant fee. Now, one thing that's important to know is this couple. They had reservations about the fee from the very beginning. They're very cost conscious and so, even going through this, I knew in the back of my head there's probably a low chance, to maybe even a very low chance that this couple actually moves forward with some of this, but we went through it anyways. Later, that proposal did all of this stuff.
Speaker 1:Now, this was right in the middle of COVID if you remember COVID, february-ish of 2020, shutdowns went into effect and then we had a horrible market. The market lost about a third of its value in five short weeks, starting in February of 2020 and ending in March of 2020. Now, to me as a financial planner, this kind of represented best case scenario, at least for the client. They had been in cash for a long time, they were looking for a pullback and about a week after I delivered their proposal, I reached out to them and I checked in and I said hey, is this something that you'd want to move forward with? And oh, by the way, that pullback you've been waiting for, the market has now delivered it on a silver platter. Now, the circumstances are less than ideal, but what we now have is what you've been saying you've been looking for. So I emailed that to them. I said please let me know if you'd like to move forward and please let me know if you have any other questions. To which they responded and I'm reading verbatim here no further questions here. And then, with exclamation, though I'm sure glad we didn't immediately move our cash forward per the planning.
Speaker 1:Here's the thing. I understood what he was feeling in that moment. The market had just lost a third of its value, shutdowns were going into effect, the market was free falling and he said we do not want to move forward. I understand that that's a scary time to invest. The problem is and I'm not kidding when I say this the day that he sent that email was March 23rd of 2020. That marked the exact bottom of the stock market, and the market then had its 50 best days in a row that it's ever had in the history of the S&P 500. It's up big since that point, even with the bear market in 2020 and the choppy market we've had in 2023,.
Speaker 1:I went back as I was preparing for this episode and I looked at the portfolio that I recommended, which was a fairly balanced to moderate portfolio, and that portfolio is up over $1.9 million since I made the recommendation. So why do I tell this story? Well, I tell this story because this cost, this $22,000 per year, was so front and center for this particular prospect that they lost side of the bigger picture. The bigger cost, in the grand scheme of things, is the $1.9 million in counting this prospect or this person has now lost out on over the last three plus years. And so I say that because so often the cost that we see is the cost that we focus on, but we have to understand the bigger picture. What's the cost of not implementing the right strategy? What's the cost of not working with an advisor? By the way, I'm not saying that simple story should be the reason everyone should work with an advisor. A lot of people aren't like that. All that I'm saying is we have to be aware that sometimes the most expensive costs are the costs we don't see, the costs that aren't apparent, the costs that hopefully a good advisor might potentially be able to keep us from.
Speaker 1:So, as we start to explore some of Don's questions and some general principles here, one thing that I want to point out is that, for many people I've met over the years, the biggest cost that they paid wasn't the fees they paid their financial advisor. It was the cost that one single mistake that costs them a huge amount of money or time or opportunity. And the hard part is these costs aren't obvious, at least they're not obvious ahead of time. In retrospect, it's easy to see the hundreds of thousands or millions of dollars of one bad decision made, but it's harder to see that in the present moment. And so the hardest thing is those costs are not obvious ahead of time, and the overwhelming majority of us don't think we'd fall prey to these same mistakes. But we have to hold at least the possibility that we are all human and we're all susceptible to certain types of mistakes.
Speaker 1:So, don, let's go to your specific situation, and while I can't provide specific recommendation or guidance, let's just pick some things out here. One of the things that Don said is this. He said I have a portfolio of approximately $4 million and I estimate that my expenses in retirement will be $120,000 per year in today's dollars. Doing this simple math, I'm not too worried about running out of money, end quote. So, don, I'd echo that, looking at the numbers, looking at the math, the math checks out. If you divide 120,000 per year by $4 million, that represents about a 3% withdrawal rate that you need from your portfolio to meet all your needs. Here's the thing, though I assume you probably have some type of social security, maybe you and your spouse both have social security. Let's assume even that $60,000 per year. Well, if 60,000 per year is coming from those sources and you need 120,000, then really it's only 60,000 that you need from your portfolio. And if you only need 60,000 from your portfolio, then you only need one and a half percent of your portfolio to be okay, to not run out of money.
Speaker 1:And this is where it gets challenging for some people, as they think okay, I'm going to be okay already, I'm not going to run out of money already. What do I need a financial advisor for? Which is why I would go back to the point of, if you think, the goal of a financial advisor so that you don't run out of money. Reframe that. Are there things that financial advisor could still do to optimize your investments, your tax strategy, your overall financial picture, not necessarily just getting you to a point where you're going to be okay? So what are those other things? Well, I would look at, don, at the cost you potentially pay not to have an advisor. The first is opportunity cost.
Speaker 1:So Don mentioned my question is why not simply invest in the S&P 500 fund and keep it all simple, with about three years cash reserves to weather any downturns in the S&P 500. Well, this is an area that I think an advisor should be able to add value in a couple of ways. Number one is avoiding biases. We are all subject to various biases that impact the way that we invest, the way we plan, the way we live, the way we do everything. Right here, what I think is being exposed is simply recency bias.
Speaker 1:So many people feel comfortable just owning the S&P 500 right now, but that hasn't always been the case. 10 to 12 years ago, the S&P 500 had just come off a horrible decade. Very few people wanted to own the S&P 500, let alone all their money in the S&P 500 because it had just gone through a really horrible decade, from 2000 to 2010. Well, fast forward 10 years. What's been the number one performer? Well, the S&P 500 has been right up there. So what it's causing people to do is just own that, own more and more of that which, if you look at it, is just a version of performance chasing. Nobody wanted to own it after the 2000s, so everyone was out of it. Everyone wants to own it now, after the 2010s, when it's done incredibly well, so that's something that none of us really want to admit, but that's just performance chasing. All of your money is there Now.
Speaker 1:By the way, I think the S&P 500 and its constituents, or its components, are incredible companies. These are the best companies in the world. So I'm not here to say you shouldn't own it. You should absolutely own it and for most people, I think it should absolutely be the biggest part of their portfolio. However, if that's all you own, there's probably going to be a cost there. There's a cost associated with that in terms of either lesser returns that you can expect over time or more risk that you're accepting, especially in your retirement years.
Speaker 1:So, as we look at the cost of not hiring an advisor. In Don's case, that's potentially one. Again, I want to make clear what I'm saying is does that mean you should go pay $25,000 to an advisor just for that? No, not at all. All that I'm saying is that cost is very apparent. It's very clear, it's very obvious. Let's explore the other potential costs you might be paying that you might be completely oblivious to today, without proper perspective. So would you be okay, don, probably going to be just fine. You don't need an advisor to be okay. You've done the hard work already to get there. But could you optimize what you're doing? I certainly think there's potential for that to be the case.
Speaker 1:The second potential cost is having the wrong withdrawal strategy. So, $25,000 per year I'm going to go back to the fee that Don is paying his advisor. I'd say a lot of money. There's no doubt about that. That represents about 0.625% of the value of Don's portfolio. So when we go back to, is that advisor worth it or not, one thing that we want to know is can that advisor add 0.625% or more of value to make up for that cost? Now, I don't think that an advisor is going to outperform the market. At least, I don't think they're going to consistently outperform the market. However, the right withdrawal strategy in retirement absolutely can allow you to outperform what you otherwise would have done with the wrong withdrawal strategy. One of the ways I'll explain this to people is in retirement, the way that you win is by not losing.
Speaker 1:If we go back to that S&P 500 example again, if you invested all of your money in the S&P 500, the beginning of 2000, yes, I'm absolutely cherry picking dates here that portfolio would have had a pretty decent return over the next call at 23 years or so, through 2023. That portfolio would be up about 7%. So I mean that portfolio being 100% of your money in the S&P 500 invested on January 1st of 2000 and you just let it run for the next 23 years, it's up right about 7%. So underneath or beneath its long-term average, but still a pretty solid return going forward. Now what if you were not just investing all of your money in the S&P 500 on January 1st of 2000, but you were also starting to take money from the S&P 500 or from your portfolio? And let's just assume you're taking 5% per year from your portfolio, starting that year and then increasing it with inflation. While that seems like you'd still have a pretty optimal outcome. You're taking 5%, but you average 7% per year growth. You would think that your portfolio would continue growing.
Speaker 1:For you, the challenge, though the hard part of investing, though the hard part of withdrawal strategies is you would have actually completely run out of money somewhere in the year of 2018. So the reason you ran out of money is because of what we all know as sequence of return risk. Sure, 7% was the average return over that 23 year time period, and if you weren't touching it, you achieved that 7% return. But if you were pulling money out of it, you had some pretty devastating years early on. In 2000, the S&P was down about 9%. 2001, it was down about 12%. 2002, it was down 22%. So you combine that with withdrawals throughout that, you're really starting to cannibalize your portfolio and it's not going to be able to last you throughout retirement. So that's right.
Speaker 1:Talk about the cost of the wrong withdrawal strategy Isn't just looking at what's the return of your investments going to be within your portfolio. It's how much sooner do you draw that portfolio down than you otherwise would have had you been more diversified, had you had a withdrawal strategy that allowed you to take an intentional part of your portfolio that had gone up, instead of just blindly taking from the entirety of your portfolio. Going back to Don's case, I don't necessarily think that this example I just gave applies perfectly to Don, because Don might only need to take 2% or 3% of his portfolio out each year. The example I used was a 5% withdrawal rate. However, could Don improve his withdrawal strategy by adding, above and beyond just the S&P 500? And by having a more dynamic withdrawal approach? I certainly think there's good potential for that.
Speaker 1:The next potential cost of not working with an advisor is are you overpaying in taxes? Now, don, you mentioned doing Roth conversion, so it sounds like maybe you're pretty on top of this, but having that right balance of how much are you converting? Because it's very possible to under convert money from IRAs to Roth IRAs. If you're not familiar with what I'm talking about, go back and look at many of past episodes I've done, where I talk about why this adds value and why it should be done. Sometimes, though or many times, though, I should say people come to me they know they need to do a Roth conversion strategy, but the way they've modeled it out, they're either significantly under converting, which means they're leaving a lot of money on the table or they're significantly over converting, which in some cases means they're paying much more in taxes to do that than they otherwise would have had. They just not even known what a Roth conversion was and sailed off into retirement without doing anything. So having the right tax strategy can save tens or hundreds of thousands of dollars or more versus no strategy or the wrong strategy, and that's something to potentially look at.
Speaker 1:As Don, is your tax strategy superior to, or at least equal to, what your advisor doing is a question that I might ask myself. Another cost is continuity, don. What happens if something happens to you? Is your spouse as involved with finances? What would the cost of a transition be if your spouse really wasn't involved and didn't know where accounts were, and didn't know what the strategy was, and didn't even know basic things like where do I access passwords, how do I pay bills? Where does money come in each month? That alone isn't a reason to go pay an advisor $25,000 per year, and I want to make that very clear. But I do want you to start thinking about what are the potential hidden costs involved of doing this on my own, because, going back to Don's words, I could be just fine. Based on my portfolio value and the amount that I want to take out of my portfolio, the final cost that I saved for last is maybe the most important of all these, and I'll tell this to clients all the time is we're going to do the investing, we're going to do the withdrawal strategies, we're going to do the estate review, the tax review, the tax strategy, all that stuff.
Speaker 1:But if we're just doing all that and you're worried, or you are incredibly anxious, or you just feel like you don't have any grasp of what your finances can do, or your unhappy retirement, you've kind of missed the point. The goal of a good financial plan should be to support the life that you want to live, to support a life of meaning and purpose and happiness, which, of course, we can't create for you, but we can help you to focus on. And if you are doing things on your own but you're constantly worried, or you're constantly second guessing, or you're constantly worrying, what am I missing or what do I not know? I don't know. If you're asking yourself those questions, you have to ask what's the cost of peace of mind? What price would you pay for peace of mind, the thing for a lot of people the peace of mind and confidence of knowing, okay, I've got someone who is looking at this with me and for me. I have someone who's bringing things to me that need to be done so I can be totally freed up to travel, to spend time with family, to spend time doing the types of activities I love, as opposed to having to worry about Roth conversions and investing. Where do I pull money from this year? So what does that ideal life look like? What does that peace of mind worth? How do you make sure that you can fully pursue what makes you happy and have a team of advisors on your side that's helping to implement the financial strategies?
Speaker 1:One exercise I would do someone like Don is I'd say look, let's model out what if you do only spend $120,000 per year. So that's the number that Don gave us and he has $4 million in his portfolio. I have no idea if there's any real estate, I have no idea what social security or any potential pensions look like, but let's model it out. I wouldn't be surprised if we say, don, here's what this looks like. Yes, you're going to be okay in terms of your ability to spend $120,000 per year, but let's look at Don at age 90 or 95. I would not be surprised in the slightest if that $4 million portfolio was projected to be closer to $10 million or $12 million at that point, even under some fairly moderate assumptions. I would then ask Don, what would you like to see that $10 to $12 million do for you at that point?
Speaker 1:Those are some of the powerful conversations, because it's at that point that it becomes real to people of look, not only can you retire and be okay, but look what else you could potentially do, whether that's giving money to children or charity, whether that's enhancing lifestyle, whether that's doing something that you never thought was possible because you always felt like you had to live within a certain amount. Those are the conversations that are really powerful, because what we're doing is we're saying look, let's meet all of your current needs. So we're typically thinking, day to day, month to month, year to year, we're going to meet your needs, we're going to show you where money is going to come from. And oh, by the way, by the end of your life you're projected to have 10 plus million dollars in your portfolio, still using Don's portfolios as a hypothetical starting point. Well, that reframes things for them.
Speaker 1:Sometimes it's oh my gosh, I don't want 10 million or 15 million or 30 million in my portfolio the day I die. I want to know what else can I do today to fully live. Or you know what? Yeah, that's money that I want to give to children. Well, great, but by the time you're 90 or 95, your children might be 60 or 65. They maybe don't need that money from you anymore. But today they're starting families, they're trying to buy a home, they're trying to save for college. How much more powerful would it be to help them with those types of things today when they could really use it? Or maybe it's. You know, I don't really want to leave money to kids. It's all going to charity Wonderful. How many deserving charities are there today that could use some of those funds today? And oh, by the way, that now opens up other tax opportunities that we can plan around and strategize around.
Speaker 1:So really, the goal of good financial planning is to live an aligned life and not to have all this money pushed out and deferred out, only for you to wake up one day and say, gosh, it's nice to have $10 million in my portfolio, but what was the opportunity cost of that? What else could I have been doing with my spouse, with my kids, with my grandchildren, my community? What else could I have been doing that I missed because I didn't have someone helping me to understand the weight of some of these decisions or the trade-off of some of these decisions, and now I missed some wonderful opportunities. That's a potential cost that is difficult to put a price tag on. So, as we start to wrap this up, this isn't to say, don, you should go pay $25,000 or $30,000 or $35,000 per year for an advisor. This is just to say how do you appropriately compare the potential costs of an advisor, whether that advisor is charging based on your portfolio, or an hourly fee or a fixed fee? How do you compare that to the potential cost of going at this alone, if you're not necessarily going to be implementing all the strategies in the way that they're most optimized, will then you start to understand what's the cost of working with an advisor? But, more importantly, what's the cost of not working with an advisor? Now, some of this I know is pretty generic.
Speaker 1:I did another podcast episode in YouTube video called when Does it Make Sense to Work with a Financial Advisor? Today was along the same lines, but today was about how do you frame things correctly of what's the cost of working with versus what's the cost of not working with an advisor. But check that out. On that episode you go through what's some of the value that a good financial advisor you should expect to receive from them. But at the end of the day, I think the question that all of us have to ask ourselves is does the value I'm receiving in working with this advisor exceed the cost of an advisor? This isn't me saying one price instructor is better than another, or everyone should have an advisor or everyone shouldn't have an advisor. It's all about how do we frame things correctly so we can make the right decisions for us. So that is it for today's episode.
Speaker 1:Don, I really appreciate your question. I think that it's a very good one, that a lot of people are asking similar types of questions around. So thank you for allowing us to use you as an example. I hope that was helpful. Hope that was helpful to all of you tuned in, as always, appreciate your listening and I'll see you all next time.
Speaker 1:Hey everyone, it's me again for the Disclaimer. Please be smart about this. Before doing anything, please be sure to consult with your tax planner or financial planner. Nothing in this podcast should be construed as investment, tax, legal or other financial advice. It is for informational purposes only. Thank you for listening to another episode of the Ready for Retirement podcast. If you want to see how Root Financial can help you implement the techniques I discussed in this podcast, then go to rootfinancialpartnerscom and click Start here, where you can schedule a call to one of our advisors. We work with clients all over the country and we love the opportunity to speak with you about your goals and how we might be able to help. And please remember, nothing we discuss in this podcast is intended to serve as advice. You should always consult a financial, legal or tax professional who's familiar with your unique circumstances before making any financial decisions.