Passive advisors did not develop the frameworks or methodologies which include asset allocation, asset classes, indexes, and other features of passive and index investing. These ideas and the research supporting them come from academia, not the advisors. I ve tracked it pretty closely and it varies from client to client, but, ten hours per year is a good average number. This assumes an hour each quarter for a portfolio review, and another hour per quarter of miscellaneous chit-chat, clerical stuff, rebalancings, additional investments with new monies, plus two hours per year thrown in for good measure. Some clients take very little time, maybe four hours per year, some more than ten hours, but the numbers I ve kept for the last five years suggest that ten hours a year is a reasonable average.
Some financial situations are very complicated, and charging a set-up fee makes sense.
Multiple accounts must be analyzed, transferred, allocations determined, and so forth. But some large accounts simply involve a single chunk of money in cash, and planning and implementation can be quick and easy. Both these professions require several years of expensive professional training and rigorous multiple day exams to practice. RIA s have no particular training or educational requirements, and only recently has a brief test been required for newcomers. To become a DFA affiliated advisor requires three days, though other qualifications exist.