QUESTION: My husband and I are thinking of turning over about $1.5 million of our savings to a financial planner we trust and believe is competent, but we have two questions.

First, does a fee of $2,500 each quarter seem reasonable for creating and managing a portfolio of mutual funds for us? Second, is there any problem with investing all our money with one fund family, which is what this adviser plans to do? We don't have time to manage our own money and when we've tried in the past we've made numerous mistakes.

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-- L. M., San Carlos, Calif.

ANSWER: Before I get to your two specific questions, let me first say that I think you've gone through the right thought process before deciding to turn over your money to a pro. That's important. As anyone who regularly reads this column knows, I think most people are able to invest their money on their own if they're willing to put in a bit of time. It doesn't take a lot of effort, but you do have to learn some basics, which you can get a good jump on by checking out our Money 101 lessons on investing.

Unfortunately, many people don't want to do the groundwork. They want to tune into a few TV shows or scan the financial magazines for a few hot mutual fund tips. And then they wonder why the fund that was at the top of the performance charts when they bought it has begun churning out losses instead of gains.

But you've taken an honest look at yourself. More people should do this sort of frank self-assessment before they start blithely throwing their money at whatever investment is generating the hoopla at the moment.

Now, as to your specific queries, let me first tackle the question of whether it makes sense to keep all your assets in one fund family.

I don't have a problem with that provided the fund family you're considering meets three criteria.

First, it should be a family that's been around long enough to establish not only a decent track record, but a reputation for treating its shareholders fairly.

For example, I'd feel much more comfortable having my money with a family that isn't always opening funds to cater to every investment fad and that isn't regularly raising its management fees.

It's difficult to quantify what constitutes an "investor friendly" fund company, but you can get a sense of how well fund families align their interests with that of shareholders by checking out Morningstar's Stewardship Grades, which grade fund companies in five areas ranging from board quality to corporate culture.

The second thing you want to see before you entrust all or most of your assets to one fund family is a broad menu of funds from which you can build a truly diversified portfolio. Your portfolio needs to include large- and small-company stocks, growth and value oriented shares and, possibly, some foreign stock funds.

On the bond side, you don't need quite as wide a range of choices, but at a minimum you'd want to see short-, medium- and long-term bond funds (taxable and muni) and perhaps a high-yield, or junk bond, fund as well.

Finally, you want to be sure these funds charge reasonable fees. There are many good fund companies out there with modest or even miserly fees, so what's the point of coughing up extra dough when there's no evidence I know of that shows that higher fees lead to higher returns. If anything, the opposite is true. The higher the fees a fund charges, the harder it is for that fund to overcome the drag of the higher charges and put up superior results.

This is especially important for you because the $2,500 per quarter your investment pro is charging will be in addition to fund fees.

So what's reasonable? Well, although there's no hard rule, I think you should be wary of paying more than 1 percent per year for stock funds and more than 0.75 percent for bond funds. Is it possible a really good fund charges more? Sure. But it's also possible to find perfectly good funds that charge a lot less.

You can compare the fees on the funds your advisor is recommending vs. those of other fund families by going to the Funds section of the Morningstar site.

Now, as to the question of whether $2,500 per quarter is a fair price for an adviser, again there's no official standard of what's fair. But that fee works out to about 0.67 percent per year on the size portfolio you're talking about. All in all, that seems pretty reasonable to me. I know that some advisers charge much more for portfolio management - about 1 percent is quite common and some even go to 2 percent or more.

Of course, before you fork over the money, you should be asking this adviser for some evidence that he (or she) knows what he's doing. The adviser should be able to produce a track record of how the portfolios he's built have done compared with some appropriate benchmark - say, a standard market index like the Standard & Poor's 500 or, in the case of portfolios that include stock and bond funds, a benchmark that includes a blend of stocks and bonds.

And you want to be sure the adviser is registered with the appropriate state securities regulator and that the firm is registered with the Securities and Exchange Commission.

You should also ask to see a copy of the adviser's "ADV" form, parts 1 and 2, which will tell you, among other things, whether the adviser has had any run-ins with regulatory authorities.

I know what you're probably thinking: the reason you want to turn your money over to an adviser in the first place is because you don't have the time to spend on research, and now I'm suggesting you do some upfront research before committing to this adviser.

Well, you're right, but ultimately, you've still got to take responsibility for your money even if you're not managing it yourself.

So take a little time to get to know this adviser before turning over your dough. And if you do decide to go ahead, be sure you get regularly updates (at least quarterly) of how your portfolio is doing. If all goes well, you'll know you're getting your money's worth out of the adviser and that you made a wise choice. And if performance is substandard, well, advisers, like funds, may sometimes need to be replaced.

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