The Value of Advice

October 24, 2018

I recently had the opportunity and privilege of sitting down with fellow CFP® and good friend Justin Castelli to “talk shop.” We covered a wide variety of topics (both on and off camera), but the focus of our on-camera conversation was around the value that a true financial advisor/planner provides, what topics that advice covers, and how an advisor charges for that advice.

During this conversation, we connect the value (and fees) of a good planner to not necessarily the amount of time that is spent with the client but the value that is delivered to the client based on the experience and expertise of the planner. We also discuss how it’s not necessarily what an advisor does, but what clients are able to do because we’re in their life, as well as how sometimes it’s the actions NOT taken that can have the biggest impact on a plan. We talked about the way clients look at fees (tied to time vs value delivered) can be similar to the way patients look at exam fees when working with their optometrist, dentists, or physician, sharing a situation that happened early on in my wife’s optometry career:

Bottom line: you should know how much you are paying your advisor on a monthly, quarterly, and annual basis…and, with that information, be able to answer the question of whether value being delivered exceeds the cost of those services. If you don’t know how much you’re paying your advisor, it makes it difficult to determine value gained.

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