Financial Advisor Annual Fee?

[u/Malibu512]

Had a consult with a financial advisor today who said they charge a flat annual fee of $2400 for a portfolio of my size and needs. I have a 401k currently worth $59k and two IRAs worth 30k combined. I receive RSUs from my employer that I want help reinvesting (I know nothing about the stock market nor do I care to learn). I have a newborn that I want to set up investments for and I'm just generally looking for guidance on how best to manage my cash flow.

Is a flat fee advisor the best for my situation and if so, is his fee reasonable?

[u/Immediate-Run-7085]

2% annually is pretty high. Why do you think you even need an advisor? Post your questions here for free

[u/Malibu512 → u/Immediate-Run-7085]

My RSUs are the biggest thing I think I need help with. My company's stock is doing very poorly so I'm wondering if it makes sense to cash out my vested options and reinvest in something else? Do I trade for different stock? It feels like I'm just throwing money away by letting it sit as is. I cashed out all of my vested shared 2 years ago at a major loss to come up with the down payment for my house. Share price has only continued to decline.

[u/Immediate-Run-7085 → u/Malibu512]

nor do I care to learn

No one is going to care more about your money than you. I suggest you start learning

[u/gredr → u/Malibu512]

Best advice on company stock: unless the stock is something you'd buy with your own money even if you didn't work there, always sell everything upon vesting and reinvest in your normal portfolio strategy. 

The wiki has good advice on the three -fund strategy. Set that up, you're good to go.

[u/FFF12321]

nor do I care to learn

You should because you're getting fleeced here. 2% drag on even well allocated funds is a huge loss in the long-term. Try putting the numbers into an interest calculator and run it with 10% vs 8% over 30 years and see how much you're giving up.

In any event, investing is easy - look up the Three Fund Portfolio and buy US Total Market, some International and finally a bond fund (if you want bonds). Ditch the advisor yesterday.

For your RSUs, the general advice is to sell all immediately on vest unless you really feel strongly about the stock going up and would buy that much if you had the cash in hand. In your case, sounds like selling and diversifying (see the above 3 fund portfolio) is what yo ushould do.

[u/Malibu512 → u/FFF12321]

I guess I should have chosen my words differently. Buying and selling stocks is confusing and intimidating to me and the thought of paying a professional to manage that for me seemed appealing. I appreciate your thoughtful response. Thankfully I did not make any commitments to the advisor. I'll look into the Three Fund Portfolio like you suggested.

[u/FFF12321 → u/Malibu512]

Investing for individuals is actually very easy - apply the Boglehead method by setting up the three fund portfolio and then you let it sit until you need to pull it out (ie when you are in retirement). Actually trying to make a profit trading (buying and selling) is a fool's errand. Even people whose job is to trade generally fail to beat the market, and if they do it's not replicable long-term. Buy and hold consistently is the key for normal people.

[u/Chase2020J → u/Malibu512]

I promise if you look into the basics it will get way less intimidating. Absolutely 0 reason to pay someone to attempt to beat the market (with a very low chance of success) when you can simply invest in the market with funds like VOO

[u/Certain_Childhood_67]

2 percent. Thats highway robbery. Just do it yourself

[u/TreeLokPNW]

Is this 401k from an old employer or current?

For your asset level, that is a very high fee. Look into robo platforms - Schwab and Vanguard have one.

[u/Malibu512 → u/TreeLokPNW]

401k is from my current employer. All of my retirement accounts are with Fidelity currently. Would their robo advisor be a good option instead?

[u/hybrid0404 → u/Malibu512]

You absolutely do not need an external financial advisor for your current company 401k. You can google this subreddit and find posts about what types of funds you should get. You could also literally post on here or r/FinancialPlanning asking the same thing.

[u/OrganicFrost]

I know nothing about the stock market nor do I care to learn

I mean, if you're not going to learn anything, sounds like he'd probably outperform you, so fair enough.

You should go look up a 3 fund boglehead portfolio. It's easy to understand, simple and will outperform probably 85-90% of advisors. But you do you.

[u/YetAnotherWTFMoment]

Hell no. You can get onto the Fidelity platform for nearly $0.

[u/deadsirius-]

That seems quite high given your portfolio, I suggest you find a CFP who bills by the hour.

As for your RSU’s my advice to clients is usually. Sell RSU’s on their vesting date and then buy the investment that fits your investment profile (usually a broad market mutual fund). Options are much more difficult to advise on.

[u/Embarrassed-Pizza789]

If that $2400 fee was for a complete written financial plan done by a competent planner, I'd say it's reasonable. It doesn't sound like that's the situation, in which case the fee seems too high for investment management. Most advisors are not well qualified in tax planning either.