Great post, Will. There's been downward pressure on fees for several years now, and frankly I'm surprised it's taken this long to get close to zero. I think the future financial advisor/fee model will look something like this:
0% fee for anyone under 30 or with a portfolio under 100k
.25% fee for people aged 30-50 or with a portfolio between 100k and 500k
.5% fee for people aged 50+ or with a portfolio above 500k
1% fee for portfolios above 1 million
The added services that justify a higher fee (such as tax and estate planning) don't really come into play unless an investor is near retirement or has a reasonably high net-worth. The vast majority of Americans should have easy access to free or nearly free financial advice, with the option to pay more for specific add-on services.
The elephant in the room is what happens if 90% of U.S. investors all have capital committed to the same handful of index funds? Does that make the market, and therefore everyone's investment portfolios, safer or more volatile?
Great post, Will. There's been downward pressure on fees for several years now, and frankly I'm surprised it's taken this long to get close to zero. I think the future financial advisor/fee model will look something like this:
0% fee for anyone under 30 or with a portfolio under 100k
.25% fee for people aged 30-50 or with a portfolio between 100k and 500k
.5% fee for people aged 50+ or with a portfolio above 500k
1% fee for portfolios above 1 million
The added services that justify a higher fee (such as tax and estate planning) don't really come into play unless an investor is near retirement or has a reasonably high net-worth. The vast majority of Americans should have easy access to free or nearly free financial advice, with the option to pay more for specific add-on services.
The elephant in the room is what happens if 90% of U.S. investors all have capital committed to the same handful of index funds? Does that make the market, and therefore everyone's investment portfolios, safer or more volatile?