Looking for financial advisor in New York City

April 5, 2014 4:54 PM

I'm looking for somebody to help me plan retirement,etc. I had somebody whom I paid by the hour but I called her to do an update and she is retired now. She referred me to somebody who says he charges 0.85% of your money each year as his fee. So if he were to handle all my money and if I had $100,000 at the end of the year he would take $850. I"ve never heard of this kind of arrangement before. Does it sound kosher? Any recommendations for financial advisors/planners who charge by the hour? thanks.
posted by DMelanogaster to Work & Money (7 answers total)

Pretty standard for asset managers to provide financial planning as part of the management fee. 85 bps doesn't sound so outlandish to me.
posted by jpe at 5:09 PM on April 5, 2014

Have you looked into Vanguard? I believe you can hire advisors there, and if you have enough money, they will advise you for free (I believe the same quality of advice).
posted by ClaireBear at 5:39 PM on April 5, 2014 [2 favorites]

The CFP site has a searchable directory, fwiw. There's lots in NYC.
posted by jpe at 5:50 PM on April 5, 2014

Nobody does anything "for free." If you don't understand how the person serving you "for free" manages to pay his rent, you need to watch your wallet very carefully.

(It's entirely possible for service provider to work "for free" as to any particular service recipient. But unless you understand why the provider is working for you for free, you're equally likely -- more likely, IMHO -- to be the mark in somebody else's scam.)

In your hypothetical case (needing advice to manage $100K) I'd be happy to pay someone $850 if their advice allowed me to beat the return of a no-load index fund by more than $850/year. If not ... not so much.
posted by spacewrench at 7:38 PM on April 5, 2014

I'd be happy to pay someone $850 if their advice allowed me to beat the return of a no-load index fund by more than $850/year. If not ... not so much.

I presume the OP doesn't want an advisor for that purpose, but if they did, it should be noted that such an arrangement is pretty much impossible because 1) financial advisors are legally precluded from making such guarantees, 2) financial advisors won't make such guarantees because they know better than to think they can consistently beat the market, and 3) a financial advisor is very unlikely to offer a contingency fee structure under which you don't have to pay unless their advice allows you to beat the market because they know they would lose money because of reason #2 above.

I would try to find a fixed fee advisor, not one that takes a percentage. And I do believe Vanguard offers such fixed fee service.
posted by Dansaman at 10:06 PM on April 5, 2014

85 basis points sounds high to me, but I have very simple needs from a financial advisor. Are you looking for a lot of projections and/or help determining your financial style and goals? The CFP directory is the place to start if you don't have a friend or specific reference.
posted by wnissen at 11:13 PM on April 5, 2014 [1 favorite]

Response by poster: spacewrench, did you read "his fee" as "for free"? Otherwise I cannot understand your post, since it implies that I was requesting free services, when it's clear I am seeking services at an hourly fee rather than a set percentage.
posted by DMelanogaster at 6:42 AM on April 7, 2014