Advice-Only is above and beyond fee-only in that the advisor focuses on giving you the best advice rather than managing your assets for a large fee year after year.
Advice-Only dawned on me when I had a problem with my air conditioner. Even though the thermostat was switched to OFF inside, the “engine” outside continued running. I noticed the problem when I heard the noise outside the window. I didn’t know how long it ran continuously before I noticed, or how much electricity was […]
Working with an Advice-Only financial advisor does not require advanced knowledge. You only follow instructions.
The up-front cost of using an Advice-Only financial advisor is substantially less than the fees automatically taken from your accounts each and every year.
All Advice-Only financial advisors who pass my screening must have a CFP®, equivalent credential, or qualifying experience. The vast majority have the CFP® credential itself. Only very few don’t have it but I let them pass based on their experience. CFP® certification is based on Four E’s: education, examination, experience, and ethics. Candidates must complete an […]
Advice-Only has its downsides. Understanding them before you embark on this approach will help you make the most of it.
The first round of search and screening is focused on the business model. The advisor and the advisor’s practice must meet all 7 Advice-Only criteria (see What Is Advice-Only?). Failing any one of the criteria disqualifies the advisor from consideration. Most advisors fail the screening at this stage. Among the candidates who pass, because many […]
In any metro area, there are far fewer Advice-Only financial advisors than advisors who sell products for commissions or advisors who manage your money for high recurring fees. I do my best to find Advice-Only financial advisors near you but there will be cases I can’t find anyone close. However, if you are truly interested […]
In general Advice-Only financial advisors offer planning services in all subject areas covered by the CFP® principal knowledge topics. I’m listing some of them here: Cashflow and Debt Education Planning Insurance Planning Investment Planning Tax Planning Retirement Savings and Income Planning Estate Planning Because Advice-Only financial advisors don’t sell any product, if they think you […]
Advice-Only financial advisors help you construct a diversified portfolio that mitigates bear market losses but they don’t predict when the markets will go down.
Advice-Only financial advisors aren’t stock pickers.
Because Advice-Only financial advisors only sell their advice, they typically don’t require any minimum assets or minimum income. Because they don’t charge a percentage of your assets, how much assets you have is irrelevant. Financial planning for someone with $5 million in assets and multiple types of accounts may cost more than planning for someone […]
Some do, partly based on their own stage in life and partly driven by their clients and client referrals. Some Advice-Only financial advisors work more with early career professionals, divorced women, near retirees, state government employees, teachers, artists, athletes, … However, it’s not necessarily true that working with those demographics requires very specialized knowledge or […]
Once you get the advice from your Advice-Only financial advisor, implementing the advice is easy. In my Advice-Only manifesto Advice-Only: The Best Model For Financial Advice People Need And Want, I used an analogy of getting the diagnosis and prescription from your doctor and taking the pills yourself. It’s exactly like that, only easier, because […]
When you work with an Advice-Only financial advisor, you have confidence the advisor only works to your best interest. Gather and Supply Information The advisor will need information from you in order to get a clear picture of your financial situation. These can include account statements, tax returns, insurance policy information, retirement plan information, your […]
Rebalancing means selling some investments and buying some other investments in order to return your asset allocation to the desired percentages. Tax loss harvesting means selling some investments that lost value in order to realize a capital loss and use the loss to offset realized capital gains and income. Tax loss harvesting only applies to […]
In many ways, working with an Advice-Only financial advisor is still much better than using the Vanguard Personal Advisor Services.
Friends, family, co-workers, or neighbors are not reliable sources for financial advisor recommendations.
Absolutely. There’s no secret in how to find Advice-Only financial advisors nor any shortcut. You just have to look at each advisor and determine whether the services are Advice-Only. The following organizations are good starting points for fee-only advisors but keep in mind only a small subset of them are Advice-Only. Many members of these […]