When it comes to financial planning, you’re never too young to start. Until recently, most advisors worth visiting required clients to have assets of at least $100,000. For many people, that meant they didn’t even start thinking about hiring a financial advisor until they were ten years out from retirement.
Thanks to changes in the way financial advisors charge, even beginners can take advantage of all the benefits that come with professional asset management. Today, financial advisors work on a variety of different fee schedules, including service-dependent flat fees and hourly rates. This means clients with as little as $1,500 can benefit from a money advisor’s expertise.
Not only will a fiduciary financial advisor help you set and achieve financial goals, but they also help you save and invest more efficiently. Most studies on the benefits of a financial advisor found a net increase in annual returns of 1.5 to 3.5 percent.
One of the major distinctions between all types of financial advisors in Detroit is fiduciary status. Fiduciary advisors are legally obligated to act in their client’s best interest. Non-fiduciary advisors, however, only have to recommend suitable advice for someone in their client’s situation. The difference in these ethical standards means that non-fiduciary advisors are more vulnerable to conflicts of interest.
Robo-advisors are a new alternative to traditional, human financial advisors. Robo-advisors employ a mix of algorithms and user input to build and manage investment portfolios at a fraction of the cost of a human advisor. They’re an accessible option for young people and beginners because they charge less and don’t require asset minimums.
However, the benefit to human advisors is that they offer truly custom financial advice and asset management adaptable to even the most complicated financial situations, making them worth the added cost for clients who can afford it.
The cost of financial advisory services, financial planning and asset management in Detroit varies by company, agent and fee schedule, including:
Hourly rates for financial advisors range between $100 - $300. Flat fees vary by service, but the average flat fee cost for a financial plan is $1,000 - $3,000. Asset management services range between $125 - $200 per month but require minimum assets, usually between $125,000 - $250,000.
Other costs are possible as well if the investor buys a mutual fund or exchange-traded funds, which charge a percentage of assets invested, ranging from 0.5 - 1.25 percent.
Some advisors make money off of the 3 - 5 percent sales commissions on investments they recommend. While many of these advisors are honest actors, others may make recommendations based on the products that offer the highest commissions. This is one reason fiduciary status is so critical.
Fee-only advisors make money exlusively by charging their clients, while fee-based advisors charge both fees and commission.
The best financial advisors in Detroit are certified, licensed and experienced, with a track record of client success. Anyone can technically call themselves a financial advisor since there’s no legal requirement to use the title. However, there are multiple types of legitimate, certified professionals working in the field, and it’s critical to know the difference between them.
|Broker||Exams and registration with SEC||Buying and selling securities|
|Registered Investment Advisor||Registration with the SEC or state board||Securities advice|
|Chartered Financial Analyst||Educational and professional qualifications, as well as three exams||Building financial portfolios|
|Personal Financial Specialist||Certified Public Accountant status as well as two years in personal finance and continuing education requirements||Complicated portfolio and tax preparation; financial planning|
|Certified Financial Planner||Educational and experience requirements as well as a CFP Board Exam and continuing education||Fiduciary financial planning advice|
|Enrolled agent||Examinations and an IRS suitability check||Tax preparation|
If your Detroit financial advisor has a title not included above, it pays to double check their qualifications. The Consumer Financial Protection Bureau provides links to check credentials for different types of financial advisors.
Finally, before you commit to a financial advisor in Detroit, ask questions such as:
Based on their answers, make an educated decision and choose the right financial advisor for you.
Facet Wealth offers individually tailored financial plans and specializes in financial planning and asset management. The company also pairs clients with a CFP based on their goals and needs. Customers enjoy the ease of the company’s virtual meetings and the comfort of knowing they’ll be working with the same money advisor every time.