Why I Broke Up with My Financial Advisor
break up with financial advisor


Financial Advisor vs. Financial Coach

If you’re like most people, you probably clicked on this link thinking, “Wait. Aren’t ELP Budgeting Services employees financial advisors?” For this reason, it’s important we designate the difference between financial advisors and financial coaches.

Much like a financial coach, a financial advisor “provides financial advice or guidance to customers for compensation.” Financial advisors must be licensed and certified to practice because they directly handle client money. This comes with a high cost, as financial advisors typically charge a percentage of investments rather than a flat monthly fee. Financial coaches, like ELP Budgeting Services, focus on providing financial guidance, motivation and education without ever handling client money.

Knowledge is Power

As we alluded to earlier, financial advisors typically charge a percentage of client investments. Prior to knowing what we know now, we felt it was best to pay an advisor for convenience. Truth be told, we knew we wanted to invest but had no idea where to begin. Since time is money in investing, it seemed starting to invest while paying substantial fees was better than the time it would take to learn on our own.

It wasn’t until I really began to study that I realized we had a better option. I spent countless hours reading literature, subscribing to expert material, and asking our financial advisor as many questions as possible. Two years later, I knew it was time to break up with our advisors, but pulling the plug is never easy…until you run the numbers.

ELP Budgeting Services always emphasizes the importance of backing financial decisions with the numbers. I calculated how much money we would pay in investing fees over the course of 30+ years. Our advisor charged a 1% fee on every investment. The advisor fee combined with fund and brokerage firm fees could have cost us $700,000+ over a lifetime! The fees on investments are hard to notice on small accounts, but as our accounts grew, so would the pockets of our advisors (exponentially). That just didn’t sit right with me.

When I’m Not Against Financial Advisors

Financial advisors rightfully charge as a result of their licenses, education and competency. As investors, we have a choice to pay or not pay an advisor a portion of our investments. I do believe there may be a time for employing a financial advisor, but it’s not when you have at least 20 years left to invest. The exponential costs simply outweigh the benefits. If an individual is within 3-5 years of retirement or ceasing to invest, he or she may consider the counsel of a fiduciary financial advisor for the proper retirement strategy. However, many Certified Public Accountants can provide appropriate counsel regarding taxation and withdrawal, without charging a percentage of investments.

What it Means for You

Here at ELP Budgeting Services we pride ourselves on educating our clients to a level of competency that allows the client to make sound investing decisions. Our ELP University members learn everything that took me years and lots of money to learn, for a fraction of the cost. While I am not against advisors charging, it’s the way they charge I caution our subscribers against, especially younger investors. Flat fee pricing, such as a monthly or one time fee is the way to go. Our monthly fee, combined with presented investment strategy fees, cost our clients only 4% of what they’d pay an advisor!

We elicit trust from our clients because we never handle their money, rather we equip them to acquire generational wealth from the knowledge ELP University provides. Be cautious, be wise, and run the numbers or trust that we have, so you and your family can Earn. Live. Plan.