Financial Planning Roundup: Strengths and Weaknesses of Advisor Fee-Only Models

For anybody considering hiring an advisor, it’s important to know exactly what you want. That is, it’s best if you go shopping for an advisor who meets requirements that you have selected, rather than letting somebody come to you to sell you their services.

One way in which advisors can be categorized is by what services they provide. At a very high level, the options would be:

1. Advice-only (i.e., they provide advice but do not manage the portfolio),
2. Portfolio management with very limited advice, or
3. Comprehensive financial planning, together with portfolio management.

Financial planners/advisors can also be grouped by designation (CFP, CPA, PFS, CFA, EA, etc.) or by areas of expertise.

Finally, it’s important to have a good idea of what fee model(s) you’d be willing to accept. Allan Roth recently wrote a piece discussing the pros and cons (from the client perspective) of the various fee-only (i.e., non-commission) models:

• Strengths & Weaknesses of Advisor Fee–Only Models from the Client Perspective from Allan Roth

Other Recommended Reading

• Educating Clients About Common Scams is No Longer Sufficient (guest article by me, for NAPFA Magazine)
• 5 Investments You Don’t Really Need from Christine Benz and Margaret Giles
• Caring for My Father Put My Life on Pause for 7 Years. Here’s What I Learned (The Long View episode with Elliott Appel as guest)
• Why Are Valuations Falling in a Bull Market? from Ben Carlson
• What Was the Best Portfolio Over the Last 50 Years? from Nick Maggiulli
• The New QCD Reporting Rule Raises a Big Question for IRA Owners from Denise Appleby
• Meta’s Muse AI Assistant Has a Vulnerability That Can Turn it into a Mac Backdoor from Pieter Arntz
• IRS Cyber Weaknesses Put Taxpayer Data at Risk Again, TIGTA Says from Martha Waggoner

Thanks for reading!