Cloud-Based Financial Advisers
There are a wave of internet-based financial advisers working hard to save you fees.
The Quick Math:
$1,000,000 at a “reasonable” financial adviser fee of 50bps a year is $5,000/year
$1,000,000 managed by an individual who spends $500 (generous) on a cloud-based tool, has $4,500 left over. Let’s say it takes an investor 2hrs a month to rebalance their portfolio across a bunch of ETFs. 2hrsX12months =24hrs/year. $4,500/24 =$187.5/hr in ‘shadow pay’.
Is your time in retirement worth more than $187.5/hr? For many, it probably is not!!!
The Lesson Learned:
Think hard about your financial adviser decision. Many can be worth 10x their fee; but a lot should be fired and the cloud-based solution should be hired.
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Definitions of common statistics used in our analysis are available here (towards the bottom)