Forget about fees. Focus on value. Focus on the journey.
Are you concerned about fees? Is this your first time working with a financial advisor? If so, you're not alone. The financial industry is filled with professionals who call themselves advisors—but not all advisors are the same.
At Sterling Edge Financial, we believe financial planning should be about more than just products—it should be about you, your goals, and the strategies that drive financial success.
Understanding Financial Advice 💼 - Focus on Value - Watch Video
Let’s explore how to identify the right kind of financial guidance and understand the various fee structures advisors use.
Not All "Advisors" Are Actually Financial Planners
The financial marketplace includes various types of professionals who call themselves financial advisors, but their roles and compensation models can differ significantly.
-
Investment Product Sellers: Some advisors focus primarily on selling investments—mutual funds, annuities, stocks, or other financial products. Their compensation often comes from commissions on these products.
-
Insurance Agents: Others call themselves financial advisors but primarily sell insurance policies—life insurance, long-term care insurance, or annuities. Their goal is to place products that fit your situation, and that's okay—insurance is an important part of financial planning.
-
True Financial Planners: Then, there are fiduciary financial planners who focus on providing comprehensive advice—helping you with taxes, estate planning, behavioral coaching, cash flow management, and strategies beyond just products.
At Sterling Edge Financial, we know that our clients want more than just investment or insurance sales—they want guidance, clarity, and an ongoing plan that adapts with them over time.
Understanding Financial Advisor Fee Structures
Financial advisors employ various fee structures, and it's essential to understand how these can impact your financial outcomes.
-
Assets Under Management (AUM) Fees: A common model where advisors charge a percentage of the assets they manage for you, typically around 1%. However, as your assets grow, this fee can become substantial over time.
-
Flat or Retainer Fees: Some advisors offer a flat annual fee or retainer, providing comprehensive services for a set price. This model can offer more predictable costs.
-
Hourly Fees: Advisors may charge by the hour for specific services, which can be cost-effective for clients needing targeted advice.
Understanding these fee structures is crucial, as highlighted in Michael Kitces' article on Quantifying Financial Advisor Costs on Clients’ Nest Eggs.
Fees vs. Value: What Really Matters?
Don’t obsess about the fee. Obsess about the value.
When evaluating a financial advisor, it’s easy to get caught up in the cost without fully considering the value. However, what Advisor A can do versus Advisor B can be drastically different, even if they charge the same fee.
Here’s what to ask when comparing advisors:
-
What services are included? One advisor may simply manage investments, while another offers a comprehensive financial planning approach that includes tax strategies, behavioral coaching, and retirement planning.
-
How personalized is the advice? Some advisors offer a cookie-cutter approach, while others tailor their guidance to your specific goals, risk tolerance, and lifestyle.
-
Are they focused on products or planning? If an advisor primarily earns commissions, their focus may be selling financial products, rather than delivering true financial planning.
-
Will they help you avoid costly mistakes? The right advisor provides behavioral coaching, keeping you from making emotionally driven decisions—such as panic-selling during market downturns or making impulsive investments.
A fee-focused mindset might push you to choose the cheapest option, but a value-focused mindset ensures you get an advisor who brings real impact to your financial future.
A True Financial Planner Helps You With:
✅ Behavioral Coaching: Keeping you on track during market volatility and major life transitions.
✅ Retirement Planning: Ensuring you can retire confidently, knowing your income will last.
✅ Tax Planning: Strategically minimizing your tax burden through proactive decisions.
✅ Life Planning & Goal Setting: Aligning your financial plan with your values, aspirations, and major life goals.
✅ Cash Flow Planning: Balancing today’s needs with future goals through smart money management.
✅ Employee Benefits & Insurance Strategies: Maximizing your workplace benefits and ensuring you have the right level of protection.
✅ Estate Planning & Account Structuring: Ensuring your assets are titled properly and passed down as intended.
✅ Investment & Risk Management: Crafting a diversified portfolio that aligns with your risk tolerance and goals.
Without behavioral coaching and a comprehensive plan, it's easy to make emotion-driven decisions—such as panic-selling during market downturns or chasing investment fads—that can derail your long-term objectives. A true financial planner helps you make informed decisions, not just pick investments.
How to Choose the Right Financial Advisor for You
Before hiring an advisor, consider the following:
-
Are they a fiduciary? A fiduciary must act in your best interest, whereas product-based advisors may be incentivized to sell specific investments or insurance.
-
How do they get paid? Fee-only advisors are compensated for their advice—not for selling products. If an advisor earns commissions, it's important to understand if and how that affects their recommendations.
-
What services do they provide? If the only conversations you're having with an advisor are about investments or insurance, you might be missing out on critical areas of financial planning.
-
Do they provide behavioral coaching? Your financial success isn't just about picking the right stocks or insurance—it's about managing emotions, staying the course, and making strategic adjustments over time.
Financial Planning is About More Than Just Products
At Sterling Edge Financial, we don't just sell financial products—we guide you through real financial decisions that impact your future. Whether it's investment strategy, behavioral coaching, or long-term planning, our goal is to help you make better choices, not just buy better products.
Ready for a Financial Conversation That’s About More Than Just Selling?
If you want financial guidance that focuses on you rather than just products, let's talk.
📩 Schedule a consultation today and take the first step toward financial confidence!
Understanding these fee structures is crucial, as highlighted in Michael Kitces' article on Quantifying Financial Advisor Costs on Clients’ Nest Eggs.
This content is being provided for informational purposes only and should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Diversification and asset allocation strategies do not assure profit or protect against loss. Indices mentioned are unmanaged and cannot be invested into directly. Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer member FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Sterling Edge Financial LLC. are not affiliated.