Retirees should scrutinize how their financial advisors get paid and whether plans are built around the clients’ goals or the professionals’ incentives, said Phil Huff, a partner with Golden Reserve, LLC.
“You want to be on the same team working in one direction,” Huff said. “If that advisor’s incentive is you to not spend your money in the account to get bigger and bigger and bigger because they’re charging a percentage, that might be a red flag.”
Huff said many advisors charge fees as a percentage of assets, which can discourage spending even when clients have saved enough to enjoy retirement. He urged retirees to ask not only what percentage they pay, but also the actual dollars going out each year - both for advice and for investment costs such as mutual fund expenses.
“We don’t do percentage-based fees. We do flat-rate fees,” Huff said during an appearance on Live in the D. “Our clients pay an actual dollar amount to us every year, and it’s based on the services we’re providing, not on how much money they have. To me, that seems fair.”
Golden Reserve offers a fee analysis that breaks down advisory charges in dollars and itemizes underlying investment costs, Huff said. The firm’s “roadmap for retirement” also includes a market risk review, an IRA tax plan, an estate-planning check, and an income forecast to gauge sustainability of spending.
To learn more call 313-888-8884 or visit goldenreserve.com.