Voices: Are advisors overpaid?
January 13, 2020 by Allan Boomer
I offended an entire table of fellow financial advisors while attending a conference last year when I made this statement: “Everyone at this table makes too much money relative to what we do.”
I went on to explain that in no other profession do service providers have the luxury of basing their prices on what their clients can afford to pay. Imagine a lawyer with one hourly rate for one group of clients and a higher rate for another group. A doctor who charges a higher copay to his patients who make more money. Or a mechanic who … well I guess mechanics would be the exception.
I passed my first securities exam in 2000. At the time, financial advisors were charging an average fee of 1% to their clients for investment advice. Twenty years later, many advisors are still charging similar fees — a recent study by RIA in a Box, that surveyed 1500 firms, found the average advisory fee charged to clients was 0.95%.
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