Recently, a friend asked me to look over his mother’s holdings. His mother is in her late 60s, recently divorced, and on her own financially for the first time. She decided to go with the financial advisor rep at her local bank for some free investment help.

Because she didn’t pay for any sort of initial planning review, she’s $1,500 or so ahead, right? We’ll see.

I may be biased, but if a friend or family member asked me, I would probably tell him or her to see a fee-only financial planner to help figure out how to achieve their financial goals.

Did the free advice lead to the best choices?

My friend’s mother’s overall portfolio is about $400,000. She receives some money from Social Security and a small amount of alimony, but there is still a monthly gap to be filled from her investment assets.

The rep put about half of her assets in a variable annuity contract with a well-known insurance company. The insurance cost on the contract is 1.4 percent—before the costs of any of the investment sub-accounts are layered on. Add in the investment costs, and you are looking at an expense ratio in the 2.25 percent to 2.50 percent range.

In addition, the contract imposes a surrender charge that starts at 6 percent of assets and drops to 2 percent in year seven. Keep in mind, this is just the cost to my friend’s mother to get access to her own money! Of the 98 sub-accounts with a Morningstar rating, just 40—not even half—are ranked a four or a five, the two top rankings in this system.

Contrast this with an annuity offered by a well-known fund company that carries no surrender charge, has an insurance cost of 0.3 percent, and, of the 15 sub-accounts offered, offers 14 that are ranked four or five stars by Morningstar. Based on the value of the annuity, the difference in the insurance costs annually amounts to about $2,000. One year’s worth of the fee difference would have likely covered a review of her situation by a fee-only financial planner.

It gets worse.

There seemed to be no rhyme or reason to the bonds chosen. Within this portfolio there are some agency bonds, a preponderance of bonds issued by financial services firms, and several bonds that are barely investment grade. No laddering or any other discernable strategy seemed to have been employed here.

Finally, I noticed that the IRA account included both sector ETFs and index-linked CDs—choices I simply could not understand. In the end, I found myself asking what the cost of this “free” advice really was. I’ll leave that for you, the reader, to decide.

Roger Wohlner, CFP® is a fee-only financial advisor at Asset Strategy Consultants. Roger provides advice to individual clients, retirement plan sponsors and participants, foundations, and endowments. Follow Roger on Twitter; connect with him on LinkedIn.