facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Should You Pay A Financial Advisor? Thumbnail

Should You Pay A Financial Advisor?

Should You Pay A Financial Advisor?

Typically, you pay an advisor the same reason you pay a mechanic to repair your car. If you wanted to repair it yourself, you probably could, but what's your time worth? Is that really what you want to do? Can you do a good job?

At 80/20 Financial Services, our mission is to increase your time, money and peace of mind by helping you create a retirement income and investment plan that aligns with your goals and guide you through the completion of that plan year after year.

Our Price

In order to provide you with the best service possible we have to be very selective when deciding to work with potential clients. We aren't for everyone.

Pre-Retirement Phase- You have at least $750,000 of assets between your employer retirement accounts and any personal accounts. In this phase we charge a consulting price of $240/hr. Initial consultation is always free and we only meet when needed. 

Retirement Phase- You have at least $750,000 of assets between your employer retirement accounts and any personal accounts. In this phase we bill using the Assets Under Management (AUM) model. We charge 0.75% on the assets we manage. 

Ex. $1,000,000 x 0.75% = $7,500 per year total billed quarterly at $1,875 per quarter.

Our price is billed to your investment accounts (you do not write a check for this) and it covers all your retirement planning needs not just the management of investments. 

Managing Investments

Many think this process is 95% of what we do as retirement income planners. When actually more like 5% of what we do. At 80/20 Financial Services we believe in a common sense approach to investing. Ever read The Tortoise and the Hare? The Tortoise wins every time I read that story and that's the approach we take with your retirement money.

We will never try to sell you on some brand new single stock or some other speculative investment not appropriate for you. We do not believe in investing your retirement income in single stocks. However, we do believe in investing your money in mutual funds with at least 10 years or more of history with well known and respected mutual fund companies.

We also believe a significant portion of your retirement money should be in equity type mutual funds. Equity type mutual funds are stocks bundled together. For example, we might look at an S&P 500 mutual fund. This fund would hold stocks in the 500 most successful companies in the United States. So when we buy this fund, we own stock or equity in all 500 companies at the same time. One of those companies fails, there are 499 others to keep that mutual fund from failing.

Equity Mutual Funds

Why do we believe you should have a significant portion of your retirement money in equity type mutual funds? Because historically speaking, it's the only way to keep up with and out pace inflation. We all know 20 years ago you could buy a stamp for about $0.32. Today that same stamp costs $0.55. The exact same thing will happen to your retirement money in 20 years if you don't invest in equities. Your purchasing power will be cut in approximately half. This is not a question of if, but when.

Many believe investing in the "market" is too "risky". However, many are confusing the word risky with volatile. Does the market fluctuate daily? It absolutely does, however, look at the history in terms of years and not days. Twenty years ago in 1999 the Dow Jones was at approximately 15,000 points. Today in July 2019 it stands at 26,000 points. That's nearly a 75% increase in the last 20 years! And this includes the recession in 2008. My point is we aren't investing for the day. We are investing for the next 30 years of your retirement. So on a daily basis it can be volatile, but on a long term basis, we don't believe risky is the word that describes what actually happens.

So, Again, Why Should You Pay A Financial Advisor?

Does it seem probable to you that with the sources my firm has access to that it might cause your long-term investment return to be at least 1% per year more than you might obtain on your own?

Does it seem probable to you that we will save you at least 1% per year in the costs of mistakes you might make on your own that we will help you not make?

Does it also seem probable that we might save you at least the equivalent of 1% percent per year in time, energy, worry, and record keeping?

Here's the good news!  We charge less than 1% on any money we manage for you. Contact us for specifics.

Many people think the secret sauce is the advisor picking the investments for you. We believe the most valuable service we offer is preventing clients from making financial mistakes they can't recover from.  There is a world of difference between investment returns and investor returns.

"As your advisor we are a walking talking insurance plan hired to protect one of the largest assets you own, your retirement nest egg. Except unlike most insurance plans we protect you before a disaster strikes, not after a disaster strikes." Brian Coleman/Owner 80/20 Financial

There is no fine print and there are no hidden fees. We strive for complete transparency. Hope this shed's some light on what we believe and why we charge what we charge.

You Need A Plan

A goal of retiring - without a plan - is simply a plan to run out of money. At 80/20 Financial Services we specialize in helping cooperative employees plan their retirement. We can show you how to turn your 401k and your R&S lump sum into a stream of income just like when you were working while also helping you achieve your desired financial outcomes in retirement.

If you're age 50 or over and still in the accumulation phase (pre-retirement) we can help you figure out where you need to go and how to get there. If you are retired or nearing retirement, we can create a plan which will outpace inflation and accomplish any other retirement goals you might have.

The consultation is free and without obligation. Contact us to set up a consultation.

For more articles about retirement planning and investing click here. 

Brian Coleman/Electric Cooperative Retirement Specialist

80/20 Financial Services is an Independent Registered Investment Advisory Firm. We help Electric Cooperative Employees create their retirement income and investment plans.