How to Save Money on Financial Advisor Fees

How to Save Money on Financial Advisor Fees

In an ideal relationship, you and your financial advisor should both be satisfied with the fees for services that is exchanging hands. But in situation where you think you’re overpaying, what should you do? Perhaps you can persuade your advisor to agree to a lesser fee. 

Even for the best financial advisor, there is a fine line between charging too much and scaring away customers and charging too little that their services do not appear to be worthwhile. Let’s look at how much advisors are often paid, and most importantly, how you can save money on this.

How Much Does a Financial Advisor Cost on Average?

In 2019, the Financial Planning Association of Australia discovered that FPA members charge an average of $2,671 to prepare a Statement of Advice for new clients and $3,757 per year for ongoing advice for clients. According to a report, the average annual cost of getting the services of a financial adviser is around $3,500. On average, the cost of comprehensive ongoing assistance is closer to $5,000 per year.

In some instances, on a $10 million account, clients could anticipate paying a maximum of $50,000. An online report puts it that – a decent charge for money management is roughly 0.25% to 0.30% of assets, so if you don’t want any other guidance, that’s a reasonable fee.

In contrast, financial advisors in Sydney prefer stipulated monthly fees rather than percentages, and these fees depend on the scope of the advice they offer. In some firms, a first-time consultation may cost up to $99.

Getting Value for Your Money

Clients may anticipate asset management services and a detailed financial plan that is updated at least annually for the usual 1% fee. Some firms offer free tax planning services, although many accounting firm partners charge for all tax-related services. 

At Omura, clients don’t pay fees for the value they do not receive. Further, in line with our goal of providing quality and effective financial advice even to the average person, we’ll advise you on the most suitable tax structure for you at no additional price.

Meanwhile, any sum charged over conventional rates is explained by an advisor as adding value. Is the advisor, for example, working as your personal chief financial officer (CFO) and assisting with a tax or estate planning? Are they determining where you are susceptible in terms of asset protection? Is the advisor assisting you in ensuring that your charitable contributions have a greater impact? At that level, input extends beyond money management into the expanding field of wealth management.

Paying Less for Excellent Financial Advice

Although the goal is to minimize fees and expenses as much as possible, it is also vital to examine the level of service and performance provided by the financial advisor. The following are some effective strategies for reducing financial advisor expenditures.

Employing a Fee-Based Financial Advisor

You might have heard about this before, but hiring a fee-based advisor rather than a commission-based one is the best way to ensure you’re getting fair financial advice that’s in your best interests. Fee-based advisors have a larger motivation to develop their clients’ assets. In the long term, this becomes a win-win situation for both the client and the advisor.

Avoid Large Initial Loads

Upfront loadings are sales and commission fees that investment managers charge investors at the start of their relationship with them. Avoid large upfront charges and other ridiculous fees that frequently accompany services supplied by brokers. Loaded mutual funds and equivalent products have no place in today’s low-cost investment world. Fees are a key indicator of investment performance. Low costs mean more money in your investing account and a larger legacy to leave behind.

Bargain for Lower Fees

Negotiating a financial advisor’s charge is another strategy to save money. Prepare to explain why you believe it is excessive and why it makes sense for the advisor to accept you as a customer at a lower fee than their firm generally charges. If you like the adviser but require fewer services than they normally provide to clients, they may be able to justify charging you less. The same is true if you bring them more assets than they are used to managing.

How to Save Money on Financial Advisor Fees

Hire a New Financial Advisor

You might also take a chance on someone who is new to financial advice. They often know they can’t demand top dollar and are hungry, need the business, and are prepared to bargain. With these newbies, you’ll get what you pay for, and they’ll give you more attention. 

Further, with an awareness of their novelty and the desire to build a firm reputation, new financial advisors often study and work extra hard to provide you with the most effective recommendation. Someone who has been doing this for two years does not necessarily perform worse than someone who has been doing it for two decades.

Have you been wondering, where you can get a financial advisor near you? Well, look no further; Omura has got you covered. Just reach out to us via our website, and we’ll pair you up with the best financial advisor for you. Whether you need a financial advisor in Sydney or an Australian financial advisor that can operate anywhere within the country, Omura is your best option. 

FAQs

How Much Does a Financial Advisor Charge on Average?

The average charge for a financial advisor is approximately 1% of the assets they manage. However, the cost can become less as you invest more money.

Which Is Better: Active or Passive Management?

There is no definitive answer to this question. Active management allows you to profit from short-term market swings, but it also entails a higher level of risk. Passive management may not provide as much return in the short run, but it may perform as well as or better than active management over time. However, depending on your desire, we’ll recommend a management style that suits you best.

Which is Better: A Fee-Based or a Commission-Based Financial Advisor?

A fee-based advisor is unquestionably the best option because their costs are determined by their ability to make you money. A commission-based advisor has a vested interest in selling you investments that may be better for them than for you. Notwithstanding, our policies compel us to look out first for your interest, no matter your preferred payment pattern.

Conclusion

When looking for a financial advisor or determining whether to keep your current one, keep in mind that you want the advisor who gives the best value, which may not be the one with the lowest pricing. Consider the services you truly require and how much they are worth to you, and then seek a financial adviser who fulfil these needs. 

At Omura, you have no further need to cut costs since we provide the best services at the best rate possible in the industry. We put you first because your success and satisfaction are our primary reward. So, why not contact us today and access the best financial advisors for the best fee? 

More to read:
Should you sign an exclusive contract with a buyers agent melbourne
Factors to consider before hiring a Melbourne buyers agent
Don’t know how to select a good melbourne buyers agency?