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.
Why Advice-Only?
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 […]
How Does Advice-Only Work?
Working with an Advice-Only financial advisor does not require advanced knowledge. You only follow instructions.
How Much Does Advice-Only Cost?
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.
How Qualified Are Advice-Only Financial Advisors?
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 […]
What Are Downsides of Using an Advice-Only Advisor?
Advice-Only has its downsides. Understanding them before you embark on this approach will help you make the most of it.
How Are Advisor Candidates Selected In Search and Screening?
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 […]
What If You Can’t Find Advice-Only Financial Advisors In My Area?
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 […]
What Subject Areas Do Advice-Only Financial Advisors Cover?
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 […]
Can Advice-Only Financial Advisors Help Me Sidestep Bear Market Losses?
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.
Can Advice-Only Financial Advisors Help Me Find The Best Performing Investments?
Advice-Only financial advisors aren’t stock pickers.
Do Advice-Only Financial Advisors Require Any Minimum Assets Or Income?
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 […]
Do Advice-Only Financial Advisors Specialize?
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 […]
Who Will Help Me Implement The Advice?
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 […]
How Should I Prepare To Work With An Advice-Only Financial Advisor?
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 […]
What About Rebalancing And Tax Loss Harvesting When I Go Advice-Only?
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 […]
How Does Advice-Only Compare With Vanguard Personal Advisor Services?
In many ways, working with an Advice-Only financial advisor is still much better than using the Vanguard Personal Advisor Services.
Can I Get Financial Advisor Recommendations From Friends, Family, Co-Workers, Or Neighbors?
Friends, family, co-workers, or neighbors are not reliable sources for financial advisor recommendations.
Can I Find Advice-Only Financial Advisors Myself?
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 […]