The Crisis of Under-Advice: Why the Right Financial Advisor Is Worth Every Penny

Happy Memorial Day weekend, friends!

We’re doing something rare this holiday weekend in inviting an external contribution to the Net Worthwhile® Weekly. The primary reason this is a rarity is that we love the virtuous cycle of learning and communicating—but the other reason is that we have a high standard for external contributors.

But this weekend’s special guest is one of the most respected voices in the wealth management space—not as a wealth manager, himself, but as one of the industry’s top experts in advisory technology and communication. Jud Mackrill is the Co-Founder of Milemarker and the author of The Connected Advisor newsletter.

Jud’s status as an industry expert who isn’t an advisor gives him a unique and helpful perspective, both for advisors and, perhaps even more importantly, for those who receive their services. And that’s precisely what he’s talking about this week—the value—or lack thereof?—of financial advisory services.

Thanks for joining us!

Tim

Tim Maurer, CFP®, RLP®

Chief Advisory Officer

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In this Net Worthwhile® Weekly you'll find:

• Financial LIFE Planning:

  • The Crisis Of Under-Advice

• Quote O' The Week:

  • Benjamin Franklin

• Weekly Market Update:

  • Just The Numbers

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Financial LIFE Planning

Why The Right Advisor Is Worth Every Penny

By Jud Mackrill, Co-Founder, Milemarker

Ramit Sethi has built a strong reputation calling out bloated fees and the illusion of complexity in personal finance. He’s not wrong. Most people don’t need exotic strategies or complicated portfolios. Index funds work. Fees matter. And simplicity often wins.

But here’s the tension: simplicity only works until life gets complex. In today’s financial conversation, people are either overpaying for under-delivered services—or worse, facing life’s most important decisions without any real guidance at all.

Why Pay for the 100-Channel Package When You Only Watch ESPN?

If you’re only using an advisor to “beat the market,” you’re probably overpaying. That’s not a hot take. It’s reality. Much like shelling out $107/month for YouTube TV just to watch ESPN—at some point, you wonder if you should just subscribe to ESPN directly.

But when life throws curveballs—death, divorce, sudden wealth, business exits—the limitations of DIY planning are quickly exposed. It’s in these moments that the real value of financial advice reveals itself.

Under-Advised: A Personal Story

My father passed away recently. And he was under-advised.

No proactive plan. No checklist. No guidance. Just a vague “let me know if you need anything.”

That absence was glaring. And painful.

So I turned to my own advisor. Someone I pay not just for investment performance, but for clarity and calm during moments like these. Someone who had a plan before I knew I needed one.

That’s the difference. And it’s why this article matters.

What 21 Years in Wealth Management Have Taught Me

I’ve worked with financial advisors for 21 years. I’ve seen the good, the bad, and the truly transformative. From national firms managing $100 billion+ to boutique firms with fewer than 100 clients, I’ve helped build the infrastructure, workflows, and data strategy that power them.

I believe the best firms aren’t just focused on portfolios. They’re focused on people. They operate with clarity, empathy, and accountability. And they change lives—not just spreadsheets.

What the Research Says: Vanguard’s “Advisor’s Alpha”

Ramit Sethi often critiques the traditional 1% advisory fee, arguing that it’s a silent compounding expense that eats away at your wealth. And on the surface, he’s right: 1% annually over decades adds up.

But what he misses is the other side of the equation—what Vanguard calls “Advisor’s Alpha.” According to their landmark study, a skilled financial advisor can add approximately 3% in net returns annually (Vanguard, 2022). That creates a 2% positive delta over the long run—one that compounds just as powerfully as the fees Ramit warns against.

Let’s put that into real numbers:

If you start with $1,000,000 at age 35 and work with an advisor until age 65, the difference between losing 1% annually and gaining 2% annually is staggering. At retirement:

• Without an advisor (net 6%): ~$5.74 million

• With an advisor (net 9%): ~$13.27 million

• Difference: $7.52 million

This isn’t theoretical. It’s the math of compounding—just working in your favor instead of against you.

And that 3% value doesn’t come from “beating the market.” It comes from doing the hard, often invisible things well:

• Behavioral coaching (up to +2%)

• Tax-efficient withdrawal strategies (+1.2%)

• Asset location (+0.6%)

• Cost-effective implementation (+0.3%)

• Rebalancing (+0.14%)

These numbers aren’t hype—they’re outcomes. They support the idea that real advisors do far more than allocate assets. They unlock life-altering financial outcomes.

Emotional ROI: Why Clients Stick with Great Advisors

Beyond the math, there’s the mindset. Vanguard’s research on the Emotional Value of Advice revealed that 45% of the perceived value of advice comes from emotional benefits—trust, confidence, and peace of mind.

In other words, I believe the best advisors are part strategist, part psychologist, part first phone call when life gets messy.

It’s Not Just About the AUM Fee

Too many critics get hung up on the model (like AUM fees), instead of the value. Asset-based fees work well for many because they scale with the client’s portfolio. But flat fees, retainers, or project-based pricing can also work—if they’re aligned with what the advisor actually delivers.

Advisory relationships are negotiable. They should feel like a tailored suit, not a one-size-fits-all package.

5 Questions to Spot a “Real” Advisor

1. Do they ask about more than your investments?

2. Do they understand the full picture—businesses, taxes, estate, legacy?

3. Do they coordinate with your other professionals (CPA, attorney, etc.)?

4. Are they proactive in life’s major transitions?

5. Can they articulate why their value exceeds their fee?

If the answer is “no” to any of those, keep looking.

Conclusion: The Real Cost Isn’t the Fee—It’s Going Without

Ramit Sethi is right about many things. But I believe he’s wrong about this: the best advisors aren’t overpaid. They’re indispensable.

Because I believe when it comes to managing wealth, the biggest risk isn’t paying for advice—it’s paying the price for not having any.

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Quote O' The Week

From a man who requires no introduction:

Benjamin Franklin

“Wealth is not his that has it, but his that enjoys it.”

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Weekly Market Update

New trade threats spooked U.S. markets this week while international stocks were marginally higher:

• - 2.61% .SPX (500 U.S. large companies)

• - 2.52% IWD (U.S. large value companies)

• - 3.47% IWM (U.S. small companies)

• - 3.90% IWN (U.S. small value companies)

• + 1.52% EFV (International value companies)

• + 1.06% SCZ (International small companies)

• + 0.03% VGIT (U.S. intermediate-term Treasury bonds

Tony Welch is in charge of the grill this weekend and will return next week with a full investment commentary!

We hope you enjoy the remainder of your long weekend!

Tim