If you want to work with a financial advisor in Denver, be prepared to pay a pretty penny. The average annual cost of financial advisor services in the Mile High City is $3,120, which is significantly higher than the national average of $2,450. But what exactly are you paying for when you shell out for a financial advisor? And are they worth the cost? In this blog post, we’ll break down the average cost of financial advisor services in Denver and how they typically earn their keep. We’ll also dispel some common myths about financial advisors so that you can make an informed decision about whether or not working with one is right for you.
How Much Does the Average Financial Advisor Cost in Denver?
When it comes to finding a financial advisor in Denver, you will have plenty of options to choose from. However, with so many options available, how do you know which one is right for you and your budget?
The average financial advisor in Denver costs anywhere from $50-$250 per hour. However, there are some financial advisors who may charge a flat rate or a percentage of your assets under management.
The top ways that financial advisors in Denver earn their fees are through asset management, financial planning, and investment advice. Financial advisors who offer asset management typically charge a percentage of the assets they manage for their clients. For example, if an advisor manages $100,000 for a client, they may charge 1% or $1,000 per year.
Financial advisors who offer financial planning services typically charge an hourly rate for their services. The average hourly rate for financial planning services in Denver is $150-$200 per hour. Financial advisors who offer investment advice typically charge either a flat fee or a percentage of the assets they manage for their clients. For example, if an advisor manages $100,000 for a client and charges 1% annually, the fee would be $1,000 per year.
How Financial Advisors in Denver Earn The Fees They Charge
The value of an advisor is heavily dependent on the services they offer.
Financial advisors often offer investment management and insurance but there’s much more to a working relationship with an advisor than insurance and investments.
The most common services include:
- Estate Planning/Review Of Estate Documents
- Retirement Planning
- Behavioral Counseling/Behavior Change
- Investment Management
- Insurance Planning
- Risk Management
- Budgeting/Cash Management
- Debt Management
Some more unique services you’ll only find in a few advisors include:
- Estate Document Preparation
- Tax Planning
- Compensation Analysis/Negotiation
- Tax Preparation
- Business Planning (pension, 401k establishment, bookkeeping, etc)
- and much, much more.
So, what value does this all have you to?
- Envestnet: Capital Sigma Advisor Advantage believes it provides a 2.93% advantage per year, on average.
- Morningstar Gamma believes that an advisor provides an average of a 1.59% advantage per year
- Russell Value of an Advisor believes that an advisor provides an average of a 4.83% advantage per year
- Vanguard Advisor Alpha believes that an advisor provides an average benefit of 3% per year.
- Vanguard Human Advice believes an advisor provides an annual benefit of 5% per year.
All of this is grading the average advisor who provides the most common services but the question is, what if your advisor helps you to get a 10k raise per year, how much more would you have in retirement as a result if you saved half of it (in addition to what you already were saving)? A somewhat massive benefit.
What if your advisor, through proper tax planning, is able to save you an extra 5k per year in taxes (or avoid 50k in a one-time tax penalty)? Again, that’s a massive benefit.
Progress Wealth Management provides all of the common services and all of the unique services.
Why You Should Use a Financial Advisor
If you’re like most people, you probably have a lot of questions about financial planning and investing. A good financial advisor can help you understand your options and make the best decisions for your unique situation. Here are some of the top reasons to use a financial advisor:
1. Get an unbiased opinion. Financial advisors are objective professionals who can help you make sound investment decisions without being influenced by personal gain.
2. Save time and worry. A financial advisor can save you a lot of time and worry by helping you plan your finances and make smart investment choices.
3. Stay disciplined. It’s easy to get caught up in the excitement of making money, but a good financial advisor will help you stay disciplined and focused on your long-term goals.
4. Grow your wealth safely. A financial advisor can help you grow your wealth safely by diversifying your investments and managing risk appropriately.
5. Reach your financial goals sooner. With a well-crafted financial plan, a financial advisor can help you reach your goals sooner than if you were to go it alone.
The Top 3 Ways to Find a Financial Advisor in Denver
When it comes to finding a financial advisor, Denver has no shortage of options. But with so many choices, how do you know which one is right for you?
Here are three things to consider when choosing a financial advisor in Denver:
1. What are your financial goals?
Before you start looking for a financial advisor, it’s important to know what your financial goals are. Do you want to save for retirement? Build up an emergency fund? Invest in a specific stock or mutual fund? Once you know what your goals are, you can narrow down your search for a financial advisor who can help you achieve them.
2. What is your budget?
Financial advisors charge different fees depending on their experience and the services they provide. Some charge by the hour, while others charge a percentage of the assets they manage for you. Be sure to ask about fees before hiring a financial advisor so there are no surprises down the road.
3. What is your investment style?
Do you want an active investor who will frequently trade stocks and mutual funds on your behalf? Or would you prefer a passive investor who takes a hands-off approach to investing? Knowing your investment style will help you find a financial advisor whose approach aligns with your own preferences.
Financial advisors in Denver are not cheap, but they can be worth their weight in gold if you find the right one. Do your homework and interview several before settling on one, and make sure you’re comfortable with their fees. The three most common ways financial advisors earn their pay are through asset management fees, commissions, and hourly rates. Any combination of these can be charged, so it’s important to understand how your advisor is getting paid before hiring them.