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.

Your Financial Advisor Ignores You

If your advisor, all of a sudden, stops returning your calls or emails or takes too long to get back to you, that could be a sure-fire sign you may need a new advisor.

Sometimes you're just not a good fit for each other. That doesn't make anybody a good or bad person, but it doesn't mean you need to keep working together. If your advisor is on a totally different wavelength (and not in a good way), it's okay to find somebody that resonates with you.

Is 2% fee high for a financial advisor? ›

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.

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.

If you're feeling compelled to move on from the relationship, trust your gut, there's probably a good reason. Most commonly, lack of attention or comprehensive financial planning. Also, your current advisor is used to clients leaving for a multitude of reasons.

How often do people switch financial advisors? People often switch financial advisors when they experience significant life changes or feel their current advisor is no longer suitable, but there is no set frequency for making such a change.

With some firms, all you need to do is to put in writing that you want to leave and that the relationship is dissolved. With others, things like annual service fees or termination fees might need to be negotiated or flat-out paid. Here are some things to think about, and steps to take, as you make the switch.

But one problem the sector is struggling to find a solution for is how to attract the next generation of advisers. In the 15 years I've worked in this industry - either giving regulated advice or writing about it - the average age of an adviser, which has always hovered around the mid-to-late-50s, has caused concern.

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 .

When You Start Making Your Own Money. The first time you should start financial planning is once you start earning, regardless of age or income. Of course, there is nothing wrong with celebrating your first paycheck!

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.