I’m inheriting my elderly parents’ $680K investment portfolio — it’s managed by a long-time advisor with a 1.75% fee. Should I fire the manager for taking too high a cut or stick with him?

Understanding your options

Since this is a sizable portfolio, a financial advisor could help with portfolio management, investment management and performance reporting, as well as aligning asset allocation with risk tolerance. The advisor could also help by creating a custom strategy to help you reach your retirement goals and ongoing financial management to adjust the portfolio as necessary.

But professional advice isn’t free, and the fee may be a percentage of your assets under management (AUM). While the average advisory fee is around 1.02% according to Camber, 1.75% isn’t out of line with a full-service wealth management firm. However, it does mean that your $680,000 portfolio is costing $11,900 per year — though that should be compared against the returns on the portfolio.

With assets under management, the fee serves as an incentive to maximize returns. In other words, growing your assets is in your advisor’s best interests. So, if the returns are exceptional, then the higher rate may be worth it.

Robo-advisors charge lower fees, but you (obviously) won’t get the human touch. There’s also other drawbacks, like a narrow range of investment options and limits on how personalized the advice is. Of course, there’s also the possibility of managing the money yourself, but you should be financially literate and feel comfortable enough to invest according to your financial goals.

Otherwise, you may want to consider another arrangement like an annual retainer or flat fee for various services. A retainer could cost anywhere from $6,000 to $10,000, according to Harness. You could also consider working with a financial advisor who charges a fee on a per-hour or project basis, if you’re interested in doing some of the money management yourself. An hourly fee ranges from $200 to $500 an hour, according to Panorama Financial Planning.

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Finding the right fit

Before making a decision, it would be a good idea for you to sit down with your parents’ advisor, whether on a video chat or in person. First off, this will give you a sense of whether you’ll 'click' with this person and if the firm is a good fit for you (or not). If you don't mesh well, or you don’t feel like your needs aren't being met, then that may be reason enough to shop around.

If you do decide to consider your options, you should look for an advisor — whether a registered financial planner, registered portfolio manager or other designation — who is also a fiduciary. Being a fiduciary means that they must, by law, put their clients’ interests ahead of their own (so, for example, the advisor wouldn’t be compensated through commissions).

If you decide to forgo an advisor and manage the portfolio yourself, you’ll want to have an understanding of how to select and manage a diversified portfolio that will meet your goals. You’ll want to adjust the asset allocation as you age and rebalance at regular intervals. This is also a situation where you could opt to pay for hourly or project-based advice when you need it.

No matter what you decide, it doesn’t have to be forever. You can see how things go and then reassess, make slight adjustments or even big changes. And, if you’re dealing with the recent death of loved ones, it’s a good idea to take your time and consider your options.

Sources

1. Camber: What are the average financial advisor fees in Canada? (Oct 2024)

2. Harness: How Much Does a Financial Advisor Cost?, by David Snider (Jan 26, 2025)

3. Panorama Financial Planning: How Much Do Fee-Only Financial Advisors Charge in Canada?, by Jim Pan (Sept 3, 2024)