Does the age of your financial advisor matter? (2024)

FAQs

How old should my financial advisor be? ›

The average age of the profession also contributes a bit. Many financial advisors are in their late 50s and closing in on retirement.

Poor performance, high fees, strained communication and stagnant advice are among the reasons to look for a new advisor.

The number of different services and areas of expertise advisors provide makes finding the right financial advisor for your situation key — doing so means you won't end up paying for services you don't need, or working with an advisor who isn't a good fit for your financial goals.

“If judging performance only, clients need to give an advisor three to five years minimum, and realistically, five-plus is probably better,” said Ryan Fuchs, a certified financial planner with Ifrah Financial Services. “It may take several years before you can truly see how an investment strategy will work.

With age comes wisdom.

More-seasoned advisers who have experienced a similar event in the past are often in the best position to recognize the similarities and have the most valuable advice of how to move forward and about the potential outcomes.

Generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor. Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could $500,000, $1 million or even more.

Clients always have a choice when it comes to whom they work with. This is particularly true in the early stages of the client/advisor relationship: One study indicated that, on average, of those clients who leave to find a new advisor, 20% do so within the first year and 25% leave within the second year.

Most of my research has shown people saying about 1% is normal. Answer: From a regulatory perspective, it's usually prohibited to ever charge more than 2%, so it's common to see fees range from as low as 0.25% all the way up to 2%, says certified financial planner Taylor Jessee at Impact Financial.

Is one fee for a financial advisor worth it? ›

But, if you're already working with an advisor, the simplest way to determine whether a 1% fee is reasonable may be to look at what they've helped you accomplish. For example, if they've consistently helped you to earn a 12% return in your portfolio for five years running, then 1% may be a bargain.

Typically, the only costs for changing advisors are any closing-account fees (per the old contract), exit fees (from certain funds), commissions for selling investments that can't be transferred (and any losses), costs for buying new investments and taxes from any realized gains.

When you break the news to your financial adviser, keep it brief and professional. Thank your adviser for his or her help in the past, and explain that things have changed and you're moving on. If you want to share the specific reasons that explain your move, go ahead and do it. But don't feel obligated to explain.

It might come as a surprise, but your financial professional—whether they're a banker, planner or advisor—wants to know more about you than how much money you can invest. They can best help you achieve your goals when they know more about your job, your family and your passions.

However , according to a study by the Bureau of Labor Statistics , the median age for financial analysts is 37 years old , while the median age for financial managers is 46 years old . This suggests that the average age for those working in the finance industry is likely in the late 30s to mid-40s range .

There was a LinkedIn poll earlier this year from NextGen Planners asking how old people were when they started a career in financial planning. The vast majority – 60% – were under 25 and a further 35% were between 25 and 40. That meant a tiny fraction were over 40.

In your 20s

By getting started with advice as early as possible, you can develop good financial habits that ensure financial security and wellbeing throughout your life. Even if you don't have a lot of extra income, a financial adviser can show you how to make the most of your money.

Financial advisors provide a comprehensive perspective of your financial situation and assist you in making informed decisions to attain your financial objectives. While not often considered by young adults, financial planning's importance for those in their 20s can't be overstated.