Four quick taps show what an adviser costs you in dollars, what that fee has to earn back, and whether it makes sense for you. Sometimes the honest answer is no. Free, no sign-up.
Educational illustration only. A rule of thumb from your answers, not advice and not a promise of any result.
Ten yes-or-no questions on what a good adviser does. You get a grade from A to F and a list of what to ask about. Thinking of hiring one? Use it to see what to look for. About one minute, no sign-up.
A checklist, not a rating of anyone's skill or results. We're an adviser too, so weigh it with that in mind.
It depends on what you need done. An adviser tends to be worth it when you face big decisions that are hard to undo, such as a pension choice, a rollover, or how to draw money in retirement, or when you'd likely sell in a bad market. An adviser is often not worth it if your situation is simple, you enjoy managing your money, and you have the time to do it.
Either way, the question is the same one the SEC tells investors to ask about any cost: "How much does the investment have to increase in value before I break even?" For an adviser, the answer is the fee itself. A 1% fee has to bring you at least 1% a year in better returns, lower taxes or costly mistakes avoided.
Many advisers charge a yearly percentage of what they manage. Others charge by the hour or a flat price. A percentage feels small, but it comes out every year, and the money taken stops growing. The SEC's bulletin on fees shows this with $100,000 growing 4% a year for 20 years. By our arithmetic on the SEC's example, a 1% yearly fee leaves about $180,611 instead of about $219,112, a gap of about $38,500. See your own figures in the fee calculator.
The SEC also says some fees can be negotiated, and it tells investors to shop around before they invest.
Ask for everything in writing: what you'll pay in dollars, whether the adviser is a fiduciary all the time, and what you'll get each year. Check if an adviser is a fiduciary and look up any firm on the SEC's free background check. Then use the Report Card above once a year.
If you ask for one in the app, Eslyn Hernandez, your point of contact here, looks at your answers and sends you a short video on what your decisions involve and what help usually covers. It is general education, not a recommendation. Investing questions go to Will Harrison, our Chief Investment Officer, on a call.
One fee covers two jobs: planning your whole financial life, and managing your investments. There is no extra charge for either.
We start by understanding your situation, then we follow the same seven steps that CFP Board sets for financial planning:
Where the plan starts: your numbers. We build your budget and cash flow (what comes in and goes out each month) and your balance sheet (what you own and what you owe). Those two pages drive every other decision in the plan.
How we test it. We plan around your goals, such as retiring at a certain age or paying for a child's college. Then we run scenarios, like retiring a year later or taking a different pension option, and a Monte Carlo test. That test runs your plan through thousands of possible market paths to show how often the money lasts. It shows the odds, not a promise.
Example: "We want to buy a home." This is how a goal moves through those seven steps. First we look at where you stand today: your income statement (what comes in and goes out each month) and your balance sheet (what you own and owe). Then we test whether the down payment, closing costs and the new monthly cost fit with what you have now, without starving your retirement savings. If they fit, we map out when and how. If they don't yet, we lay out the choices: costs to cut, a later date, a smaller price, or another way to fund the down payment, and show what each one does to the rest of your plan. You pick the path, we help put it in place, and we check it at every yearly meeting. This is an example of the process, not a promise of a result.
What the plan covers:
Will Harrison, our Chief Investment Officer, runs the portfolios, and most of the work is research you never see. He studies and follows the companies we own and the ones we might own: their results, their managers, and the trends around them. He decides what to buy, when to add, and when to sell, and he writes up his thinking every quarter in Inside the Portfolio. His approach:
Day to day, the portfolio work also includes:
Vanguard's research estimates that advisers who follow practices like these can add about 3 percentage points a year to net returns. The biggest piece, about 1.5 points, comes from coaching people to stay invested when markets drop. Vanguard is clear that this is not a steady yearly number. It shows up unevenly, mostly when markets panic or soar, and it varies a lot from person to person. These are Vanguard's estimates across many investors, not a promise of what we will add for you. Sources: Vanguard Advisor's Alpha and its research paper (February 2019).
We charge a percentage of what we manage, and we take no commissions. From our Form ADV brochure, Items 5 and 6:
The fee is taken from your account each month for the month before. Trading costs and the funds' own expenses are separate. How your adviser gets paid, in full.
Want to see costs over the years? Try the fee calculator. Have money with an adviser now? Get a free portfolio review.
Sirmium Capital LLC is a small, independent investment firm in New York, registered as an investment adviser with the State of New York. You can look us up on the SEC's public adviser database under CRD #167682, where our full brochure is posted.
Educational information only. Not investment, tax or legal advice, not a recommendation to buy or sell any security, and not a guarantee. We earn our fee only on money you move to us, so weigh what we say with that in mind. Sirmium Capital LLC is a New York state-registered investment adviser and is not registered with the SEC. Registration does not imply a certain level of skill or training.