Aaron Cirksena is the founder and CEO of MDRN Capital.
A lot of people pay their financial advisory fee—0.75%, 1%, 1.25%—without stopping to ask, “Am I getting value for this?” It’s widely accepted as the industry standard. But if all you’re receiving from that fee is basic investment management and an annual performance review, it’s fair to ask if you are gaining or losing value.
The Problem With The Standard 60/40 Playbook
I often see someone paying 1%, even on a $3 million or $4 million portfolio, who’s been dropped into a cookie-cutter 60/40 allocation after answering a five-question risk tolerance form. That portfolio might be just a blend of ETFs or mutual funds, with no customization, proactive planning or communication.
I’ve seen portfolios from major firms where this is the entire setup. The advisor clicks a button to rebalance a generic model, and that’s it. No tax strategy. No estate coordination. No protection planning. And the client ends up paying tens of thousands a year for something they could have done themselves with low-cost ETFs.
A Smarter Way To Think About Fee Structure
One way to evaluate an advisory fee is by how it’s applied across different investment types. Not all assets require the same level of management, yet many firms charge a flat fee regardless of what’s in the portfolio.
For example, I don’t think advisors should charge fees on principal-protected investments, such as money market accounts, CDs or fixed annuities, where there’s little active management involved. In contrast, market-exposed assets (stocks, ETFs, mutual funds and private investments) often do require more strategy and oversight, making fees more justifiable.
This kind of tiered structure can increase transparency and lower overall costs for investors, especially if a significant portion of the portfolio is in lower-risk or fee-exempt vehicles. In some cases, the effective fee may fall well below the traditional 1%.
Beyond investment management, it’s worth examining whether your advisor provides additional services, such as tax planning, estate coordination or performance-based fee adjustments. If your advisor suspends billing during periods of negative performance or covers the cost of estate planning services, for instance, these are important factors to consider when assessing overall value.
Start By Asking The Right Questions
The first question to ask is: “What am I paying my advisor?” It’s surprising how many people don’t know. That’s a red flag. And once you know what you’re paying, the next question is: “What am I getting in return?”
Are you getting better returns than a passive ETF? Are you getting tax-efficient withdrawal strategies? Are they coordinating with your CPA or helping with estate planning? Or are you just getting handed a model portfolio and told to stay the course, no matter what?
If you’re not getting more than what you are willing and able to do on your own, it may be time to ask what else your advisor is really doing for you.
What Adds Value Is Personal
Value looks different for everyone. Some people want tax support. Others want regular communication or help handling market stress. Ask yourself: “What stresses me out the most financially? And is my advisor helping me with that?”
Peace of mind for you may be having your advisor walk you through which account to draw from each month in retirement or what happens to your house and other assets after your death. If your advisor isn’t taking the most important weight off your shoulders, it’s worth reevaluating your relationship.
When DIY Can Make Sense
Sometimes full-service advice doesn’t make sense, especially for younger investors still building wealth. If you’re 30 or 40, earning well and just need a few clear guidelines—max out your 401(k), diversify your portfolio, rebalance yearly—you probably don’t need to pay a 1% fee.
That said, if you’ve got a complex tax situation or want help planning a big life decision, there’s still room for advice. It just doesn’t always have to cost 1% of your assets under management.
Reevaluate When Life Changes
The best time to reevaluate your advisory relationship is when your life changes. Whether you’re approaching retirement, receiving an inheritance, facing a health issue or selling a business, ask: “Is my advisor equipped for this phase?”
My firm specializes in retirement planning, so our services are a great fit for someone in their 60s but probably not for someone in their 20s. We work with clients who share a common set of concerns, such as how to draw down their savings in a tax-efficient way and how to ensure their estate plans are in order. These needs tend to become more pressing as people approach retirement, and they often require a different kind of guidance than what’s needed during the accumulation years.
Look Back Before You Look Ahead
If you’ve been working with someone for a while, take the time to look back. How has your portfolio done (after subtracting advisory fees) over the past five, 10, 20 years? Has your advisor made changes during periods of volatility, or did they just stick with the same playbook?
The market environment in 2022 is a useful example. As interest rates rose sharply, many investors with traditional 60/40 portfolios saw unexpected losses on the bond side, which is often assumed to provide stability. Some were surprised by how much they lost, raising questions about how well their risk exposure had been explained or managed. In hindsight, it wasn’t just a matter of market performance; it highlighted the importance of communication and planning during periods of rapid change.
Add It All Up
At the end of the day, you have to add it all up. Maybe your advisor isn’t beating the market every year, but are they helping you make smart withdrawals? Are they reducing your stress? Are they saving you time and energy you’d rather spend elsewhere?
If you can say, “I’d feel worse off doing this on my own,” then your advisor is probably worth the fee. But if not, if the value just isn’t adding up, it might be time to ask for more or move on.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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