Quote from Evan Mills
“The biggest question is, if you’re paying 1% AUM, that’s $50,000 on a $5 million portfolio. Are you getting $50,000 worth of advice and expertise? If not, that’s where you should start looking elsewhere, to find an adviser you pay not based on the size of your portfolio, but by the value of the expertise they provide.”
— Evan Mills, Financial Advisor, Scholar Advising
Key Takeaways
A percentage fee becomes a large dollar figure as assets grow. Evan’s example is 1% of a $5 million portfolio, which comes to $50,000 a year. The same percentage that looks small on a statement rises with the balance, whether or not the amount of work changes.
Regular contact is part of what a fee pays for. The couple in the column went at least two years without a meeting while paying 1% on more than $1 million. The planners quoted suggest meeting once or twice a year, so a fee paid without that contact deserves a closer look.
Investment management and retirement planning cover different ground. Greg Black of Tencap notes that an adviser who only talks about returns may skip income, taxes, healthcare and legacy. Those topics shape how a retirement paycheck is built, and portfolio performance alone does not answer them.
The months before retirement are a decision point. Evan calls it one last oil check, and Amy Zamikovsky of Focus Partners points to Social Security timing and tax-efficient withdrawals as questions that arrive right when earned income stops. Changing advisers at this stage has tradeoffs too, including the time a new firm needs to learn a household’s full picture.
Fee models differ, and no single one fits every household. The article cites hourly planners at $200 to $500 per hour and project-based work at $2,000 to $10,000, alongside the assets-under-management model. Each prices advice differently, and a household with complex finances may weigh scope, ongoing access and total cost differently across a retirement that could last 30 years.