Jeremy Schneider, a personal finance guru with a $4m portfolio, says he spends about five minutes a year managing it. Investing, he insists, is dead simple. Yet he founded a financial advising firm, Nectarine, two years ago to challenge traditional Wall Street practices.
Wall Street "has taken this very, very simple thing [investing], and chopped it into 50 million ways to charge you fees," Schneider says. Nectarine connects clients with financial planners who charge only for their time—no commissions, no percentage of assets under management. This model aims to eliminate conflicts of interest and make advice accessible.
In an age of robo-advisers and AI, Schneider clarifies the role of human advisers. They excel at answering "big, hairy questions" like whether to buy or rent, affording college, or retirement timing. "That's where people actually need help," he says.
Schneider grew up with frugal parents who unplugged his LED alarm clock to save electricity. After selling his tech startup Rentlinx for $5m in 2015, he launched Personal Finance Club, now with over 700,000 followers.
What Human Advisers Do Better Than AI
AI is good at summarizing information, such as how a Roth IRA works or marginal tax rates. But it struggles with nuanced questions like choosing between a rollover IRA and a backdoor Roth IRA, as it may lack current tax law knowledge or full financial context. "What's scary for the user is that its answer might look equally confident," Schneider warns.
Robo-advisers are not great news for traditional investment managers because they hold them accountable for providing value in planning, not just buying index funds. However, robo-advisers don't do financial planning. A human expert can navigate software, assess your situation, and apply experience to translate results for you.
How to Find a Good Financial Adviser
Schneider emphasizes understanding how advisers get paid. There are three main models:
- Commission-based: Advisers earn from selling investment products like insurance or mutual funds. This creates a stark conflict of interest. "If your financial adviser is earning a commission, I say, run."
- Assets Under Management (AUM): Advisers charge a percentage of assets they manage. This can incentivize keeping money with them rather than recommending buying a house or paying off debt. AUM may suit older individuals who want a local adviser, but it's not ideal.
- Flat fee: Advisers charge by the hour, project, or month. Nectarine advisers set their own rates, typically $150–$400 per hour or up to $500 per month. Their only incentive is to attract more clients, not to steer your decisions for personal gain.
Schneider advises looking for a fiduciary, but notes that even commissioned salespeople claim that title. Ultimately, flat-fee is the safest bet.
Schneider's Own Financial Habits
Schneider doesn't pay for financial advice himself, except for a tax professional. He would hire a flat-fee adviser for complex life events, but for simple buy-and-hold investing, he sees no need. "The investing part seems infinitely complex and is actually five minutes a year," he says.
He recommends a target date index fund for most people and stresses frugality. "Your portfolio is like a bar of soap. The more you mess with it, the smaller it gets."
Budgeting Advice for the Real World
Schneider is a realist: 95% of people won't maintain a forward-looking budget. For them, he suggests automatic transfers to a 401(k), Roth IRA, high-yield savings, and debt payments. "What's left is what you can spend." For the dedicated 5%, he recommends the app YNAB.
Key Takeaways
- Keep investing simple: one target date index fund works for most.
- Use AI and robo-advisers for straightforward tasks but beware of confident errors.
- Live below your means to free up money for goals.
- When seeking paid advice, understand how the adviser gets paid and potential conflicts.
