Is a 1% financial-advisor fee worth it? Measure the service and the drag

Turn the percentage into a household bill

A 1% fee sounds small. On $2 million, it starts near $20,000 a year before other costs. The bill usually rises as the account grows.

Fees also lose the growth that money might have earned. Compare the account value after all adviser and investment costs, not just the first year's bill.

Write down what you are buying

Managing investments is only one service. An adviser may also help with taxes, withdrawals, Social Security, pensions, insurance, estate plans, giving, and a surviving spouse.

Ask for a calendar that says what work will be done, by whom, and when. A yearly lunch is not the same as active planning, even if both cost 1%.

• Which decisions will be reviewed before I retire?
• How often will the tax, income, insurance, and estate plans be updated?
• Who answers when a decision is urgent, and how quickly?
• What services are excluded or referred to another professional?

Compare the real alternatives

Your choices are not just a 1% adviser or doing it all alone. You can pay by the hour, by the project, or by the year. You can also use a lower-cost online service.

Price the work you need. Two planning meetings and a tax review should not be compared with full help for investments, bills, family, and an estate.

Understand the best-interest obligation

Investment advisers must put a client's best interest first. That rule matters. It does not mean every service is useful or every fee is fair.

Read Form CRS and the agreement. Ask how the firm is paid, what may pull it in another direction, and whether it gets paid for products or referrals. Ask for the full yearly cost in dollars.

Run a yearly value review

Once a year, list the choices the adviser helped with, mistakes avoided, taxes reviewed, and hours of work. Put every adviser, fund, and outside fee next to that list.

Advice can be worth paying for. The goal is to make sure the price still fits the work. You can ask for a new price, choose a different service, or stay when the value is clear.