Using a Financial Manager

By Brandon Koll    |    Last Updated 8/16/2025

Do you use a financial manager, or is that something you would be interested in. We are going to look at some of the options that are available. We will also look at doing it yourself. Let’s start off with my personal situation.

My experience

The first time I bought a mutual fund was probably around 1998 (yes, I’m getting old). I’m sure they disclosed the fees, and it all sounded good because I had no idea what I was doing.  That was the last time I used a financial advisor. Am I smarter or better than them. No, but I don’t charge myself a large fee and I don’t recommend funds with higher fees. Within a few years of that purchase, I learned that I could do this all by myself and I have ever since. The one thing that would have helped me perform better is the financial manager pushing me to continuously invest. It is possible that I would be much better off today if that is what happened. 

When to use an advisor

Since I have not used a financial manager in a long time, I had to do some research. There is one company I see all over the place, so I went to their site to get an idea of their fees. To their benefit they had it all laid out on their site, and it was easy to find. If you just want to pick your own stocks, ETF, or mutual funds, they charge a commission up front that varies from .75 to 5.75%. If instead you want to use an advisor to point you in the right direction, you will be looking at 1.4% per year and need $5,000 to $25,000 to get started.

Now we can look at the difference in fees. Let’s say you have $100,000 invested in an S&P 500 index fund like SPY with this company. With their fee to advise you and the fee for the Exchange Traded Fund (ETF), you would be looking at $1490 a year in fees. Now go to something like Charles Schwab and invest $100,000 on your own in SPY, and you will pay $90 a year in fees. Now you have that extra $1400 to invest every year, which could add up to over $75,000 in 20 years.

Like I said before, I don’t use a financial advisor, so this extra $1400 a year might be totally worth it. Maybe they will save you at least that much with excellent tax advice. Maybe they beat the S&P 500 by more than 1.4% with a mutual fund they recommend. My basic thought on a financial advisor is if they can beat the S&P 500 by more than their fee, they are probably worth using. Also, if they save you at least that much in some other way, then they are worth the money, and you should stay with them. If not, you might be better off investing your money yourself.

What has been said from family and friends

I recently talked to a family member that was using a financial management company. I looked at his statement and pointed out that he is not beating the S&P 500 and is paying extra fees on top of everything. Typically, I would advise him to move his money right away, but another factor to consider is age. This person is retired, so investing a little more conservatively is probably the right call in his situation. When you are in retirement, if the money you have invested is not needed for your retirement income, I go back to making sure you are beating the S&P 500.

I talked to a co-worker about his experience with a financial advisor and I was not impressed. He was not sure if his account was beating the S&P 500, which is probably common for most people that use a financial advisor. He mentioned that they did not provide any tax advice, which I thought was a shame. My co-worker also said that he had trouble getting his money moved in a timely manner. He mentioned that he had to wait 3 days for his advisor to call him back at one point. Hopefully others are having better experiences than him. Now let’s discuss some of the other financial management companies out there.

Other financial management companies

While the one company was transparent about their fees, I went to multiple other sites and couldn’t even get a search hit for the word fee. I saw a bunch of commercials for one company, so I wanted to see what they had for fees. On their site where fees were discussed it mentioned something about them being simple. Apparently, it is so simple that they couldn’t bother putting a percentage charged anywhere. How about the minimums that some of these places require.

We have already seen the minimums for one company, and they were not too high. I remember some mutual funds having minimums like that. This is probably why I mostly do ETFs nowadays. During my search, I did find a company that required $250,000 to invest with them. They didn’t show the percentage of their fee, but it is extremely likely that it is at least 1%. They are making at least $2500 a year to invest your money. I hope they are good. 

High end financial management companies

I had a former co-worker who used to brag about his financial management company. He was quick to point out that they required at least $1 million to work with them. Quick math says it costs you $10,000 a year at a minimum. Once again if they are beating the S&P 500 or saving you a huge amount in some other way, then you might be getting your money’s worth. 

Pay for service

Another option that is becoming more popular is hiring a financial advisor by the hour. If you have over $1 million, you may get the most bang for your buck by going this route. From what I can see, they typically charge somewhere in the range of $150-$500 an hour for this. If you do this and they also give great tax advice, you will probably be doing well. As I continue to build wealth, I’m going to get to a point where I do this to see if they can give me something I have not been able to pick up on my own.

Beating the S&P 500

I tried doing some Google searches for mutual funds that beat the S&P 500 over a 20-year period and wasn’t getting much for results. I’m sure if I spend more time, there are several of them out there. I did cut down my search to 5 years and found some. The common thing that I noticed was they were heavily invested in Nvidia which was up over 1500% in the last 5 years. I’m going to chalk that up to a little bit of lucky timing and not to something that will consistently beat the S&P 500. 

Index funds

While doing some research for this, I looked at some of the numbers for ETFs I commonly buy.  SPY and VTI are two that I have bought a lot of in the past. I noticed today that SPY has a .09% expense ratio and VTI only has a .03%. This made me do a search for the Vanguard S&P 500 ETF ticker symbol which was VOO. It also had a .03% expense ratio, so I will be buying that one from now on. 

Finance Hack – Only use an advisor if they can help you beat the S&P 500 by more than their fee.

I really hope this helps when you are looking at using a financial management company. I would much rather see you use one than not invest at all. If you can do it on your own, but choose to use an advisor, just make sure they are doing enough of a service that pays for those high fees.