While just about half of Millionaire investors find the services of a professional adviser to be very expensive, a majority say they are comfortable with the fees they pay, according to a recent study by Millionaire Corner.
Sixty-one percent said they are comfortable with the adviser fees they pay. Comfort level with adviser fees increases with age, with seniors over the age of 65 the most amenable to the fees they pay (62 percent) and investors under the age of 55 the least (57 percent). This is not surprising as this age level was the most likely (58 percent) to say they find professional advisors to be very expensive.
Of the types of advisor compensation, more than half of Millionaire investors we surveyed (55 percent) prefer to pay fees for financial and investment advice. The remainder prefers that the cost be included in the advisor's commission. Sixty-seven percent said they prefer fixed fees vs. paying a percentage of assets.
There are several advantages to using fee-only financial planners. Unlike most brokers, the majority of fee-only financial planners are fiduciaries, which means they are legally bound to put the interests of their clients first. They look at "the whole picture, from debt to cash flow to employee benefits to estate planning," the Motley Fool's Robert Brokamp noted in a piece he wrote for the blog Get Rich Slowly. Fee-only planners, he added, work on an as-need basis, whether answering specific questions or offering "an objective second opinion" for self-directed investors reassuring themselves they are on the right path. They also tend to have more professional designations than brokers that speak to the education needed to pass the rigorous exams.
Millionaire are virtually split on the question of whether they prefer their advisor fees be tied to product performance (52 percent) or be set at a fixed rate (48 percent). The former was most preferred by 57 percent of investors under the age of 55.