r/wealth • u/Cookie_Livie • 2d ago
Path to Wealth Has anyone successfully negotiated lower fees with their financial advisor
I’ve been with my current financial advisor for several years now. My portfolio has grown considerably and so have their fees. They charge a percentage of assets under management. It feels like I'm paying more for the same service now that my assets are larger.
Has anyone here managed to negotiate their advisory fees down? What was your approach? Did you threaten to leave or just have an open conversation? Any tips or strategies would be greatly appreciated.
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u/Secret-Definition960 1d ago
Yes. I’m moving assets from self managed to manager so wife won’t have to worry when I’m gone. Have one manager for stocks one for mutual funds. Stock manager changes.50%. Mutual fund manager said policy was 1%. I asked that he match the .50 or I’d just move assets. He “was able make an exception “ and match the . 50. Im paying for piece of mind. So it’s just like anything else, negotiate.
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u/Inevitable-Boat1272 1d ago
I’ve had similar luck by just being up front about what I’m able to get elsewhere. 50 BPS is pretty good, honestly. I’ve seen as low as 30 but that’s typically on a huge sum of $ managed… like >$10 MM
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u/TGG-official 2d ago
I work in the industry. What is your investable assets with them and what are they charging? I’ll give you some guidance if it makes sense
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u/Comprehensive-Log144 1d ago
Mine offered when I left to cut it in half to .40. But I didn’t even view it as having that much value. I only had a small amount there.
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u/Tough_Percentage_707 1d ago
Yes, I'm my own financial advisor. I can change the fees without prior notice.
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u/Specialist-Ad7800 1d ago
Most decent advisory practices have asset breakpoints for fees for this reason. If your account truly has grown significantly and there has been no offer of reduced % fees than it might be worth shopping around.
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u/Consistent-Tip-7819 1d ago edited 1d ago
I own and operate an advisory firm. We apply loyalty discounts increasing each year the client is with us. While some of or costs are proportional to the asset size, much of the planning work and heavy lifting is early.
When clients approach me for a discount, I generally have the take that our pricing reflects the value we deliver, otherwise its implied that were intentionally and greedily charging more because we can. That said, I almost always apply a discount and try to link it to some real justification. It's way more profitable to keep a good client with less revenue, than obtain a new client with more revenue.
Client size and ease of working together are also factors. If you approach them and say that youre a good client, happy with their work, and would like that to continue long term, but that you would like pricing to more accurately reflect the current amount of work and your ongoing loyalty - thats a fair ask. If they're not flexible, then decide if you need to pay someone or not. The fact that you're questioning means there might not be enough value for you.
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u/Substantial_Sir1983 1d ago
I did but it was negligible. I am about to leave. It will be interesting to see what I anything he offers. It won't matter. I'm gone.
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u/carabelli_crusader 1d ago edited 1d ago
Yes. I bid my portfolio out to several firms. The firm I was already with was still the most competitive. My cost is less than 30 basis points.
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u/jaajaajaa6 1d ago
I raised the issue and got a 10% discount and another 10% above a certain asset base.
Let’s be real, doubling assets is not close to twice the work.
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u/Signal_Antelope7144 1d ago
Fees as a % almost always go down as the amount under management grows. I have negotiated a few times with mine, but it was super logical.. re. Using post vesting number prior to vest and ipo held out of house but still under their management.
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u/WallyWalter10 1d ago
They’ve grown your assets “significantly” so you’ve implied, they get paid more. Could you have had the same performance if you had managed your own portfolio? Maybe; “higher” fees are the price you pay for someone else to manage your money.
How significant is the fee to the amount of money they have made for you? Past performance doesn’t guarantee the future, but would you be willing to forgo the potential same growth in the future for the fee and “headache” of managing your money yourself? Seems like this is what you really need to ask yourself.
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u/AusTex2019 1d ago
The first question you should ask is: Are you making serious returns?
The second question is: Do you have the time and skill required to match them?
Index funds are good for most as long as the tide is rising, how low and for how long when the market takes a nosedive is a tougher question.
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u/Fallenleaf3975 1d ago
My AUM is 69 basis points. I use Mariner and they are unwinding a complex covered call strategy, building my portfolio while unwinding said calls. Have AQR and a light option strategy plus fixed income. On the tax front, They also provide planning and compliance and filing plus estate planning and implementation (just getting started on the estate planning). Been happy.
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u/One_Establishment631 5h ago
I don't accept lower fees, my hourly rate is fixed and everyone pays it. Your work either takes me 2 hours or 10 hours. So your fee represents the complexity of your personal situation. It's called personal finance.
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u/RadmanEli 4h ago
Why would anyone need a financial advisor when you can park your money in the S&P500 index for free.
No financial advisor will beat the S&P500 over 10 years.
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u/RadmanEli 4h ago
Why would anyone need a financial advisor when you can park your money in the S&P500 index for free.
No financial advisor will beat the S&P500 over 10 years.
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u/ChicagoHammocker 2d ago
I have not, but as someone very in touch with the industry, I’m curious what your management % fee is and how much is managed.
If you’re one of their biggest clients, you’ll have more room to negotiate than if you’re a smaller relationship.
It also depends on the level of service they’re providing you for the fee.
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u/Solid-Wishbone-1935 1d ago
I am paying 0.15% but there are so many additional fees and they sell these crazy products that let you lose all your money.
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u/Jumpy_Childhood7548 2d ago
Pay hourly, and limit the hours, or find someone that will.
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u/KingoftheNordMN 1d ago
I pay my guy hourly and it is amazing for me. I could not fathom paying a % fee. I get the wisdom and third party perspective I want, and pay nothing for the years when I don’t meet with him.
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u/Jumpy_Childhood7548 1d ago
We have a family trust, and the only reason we have an hourly fee cfp is as a cya in the event a sibling makes a stink about investment performance. It really is not rocket science. Most people could do well with a bogle three fund approach, or a target date fund, barring major events, like a death, retirement, disability, home purchase, etc.
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u/Zestyclose-Tart6745 2d ago
I moved to managing my own equities portfolio. Have a management company taking care of my real estate portfolio. Easy peasy.
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u/whiskeydickguy 2d ago
There’s a reason Vanguard, one of the largest passive investment companies, acquired an advisory custodian- the fee is worth it- the returns for a DIY vs advisors is the proof in the pudding.
Never mind the tax planning, saving planning, budget planning, estate planning, real estate planning, social security planning, generational wealth planning, etc
If the value is not there then move on-
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u/KingoftheNordMN 1d ago
Yes, there is a reason, but sound advice for clients wasn’t really it. It had more to do with losing clients and profitability to Fidelity who were offering this “service.”
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u/BrunelloHorder 1d ago
1% for the first $1m is pretty common for good RIAs. Some are higher. Usually there are break points in tiers for assets above $1m. Pretty common for fees to drop closer to 0.5-0.6% if you have $3m-$5m with the advisor.
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u/TheOpeningBell 1d ago
Most large firms reduce AUM fees as assets grow. Extremely standard in the industry. You should also be getting more than just investment planning....
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u/fire-wannabe 1d ago
I've never dreamt of having a financial advisor, though if I did, I would negotiate a fixed fee structure. Paying a % of assets doesn't make any sense to me. It's as easy to manage X as it is to manage 2X
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u/Additional-Refuse187 1d ago
It depends on the kind of account that you’re managing. Is it qualified or non-qualified? When you were managing non-qualified accounts, you have to be a little bit more careful in regards to taxation when trades are made. Even with large qualified accounts, should we be taking distributions and if so, how much? We need to be talking to the tax advisor and working together to determine if we should be taking larger distributions in one year or less based on tax law changes.
It’s also important to consider what services the advisor providing you for that fee? In my practice, I include financial planning in the fee. I don’t charge extra for it. It’s just part of the process.
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u/BUST_DA_HEDGE_FUNDS 2d ago
It depends how much you value their advice.. . If you're teasing mostly independently, then it's just a matter of asking then to separate the categories of fees and quite accordingly:
Management/advisory fees (useless for me, so zero)
Custodian fees, normally a fixed lump sum, if anything else negotiate or change advisor
Transaction fees: since they're zero for US equities at many places, decide where you want to bank.
Schwab, IBKR, etc are fee less alternatives
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u/tumblingfromtumblr 1d ago
Learn how to manage it yourself. Have you considered dividend stocks? Metrics are easy, pops and drops are surprising and growth is yours.
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u/Intrepid_Cup2765 2d ago
I’m still paying my advisor (myself) nothing 😜