How much should I expect to pay for a financial planner?
How much should I expect to pay for a financial planning service or expert? I am not interested in someone to manage my money, only to draw up a plan for me.
Fee for service advice might not be the best advice. I believe in meeting with my clients and finding out what keeps them up at night. Also goals for retirement income and time line to work with. We get paid by the insurance carrier after a plan has been put in place. We are about not risking principle when it comes to retirement income. We make sure your money out lives you.
Well if you know where you would like to see your money go, then maybe you could start by setting up an appointment with a financial planner to see if your mind and their mind correlates with your ideas. If they don't set up another appointment until you meet with someone who gels with you. Entrusting your plan is just as strong as entrusting your money. And be prepared to be asked what your why is. Every financial planner wants to know your why so they can help you attain your goals.
It depends on whether your Financial Planner charges a fee for his/her time or can benefit from a commission by selling you a solution that you choose from what he offers. A good Financial Planner can charge by the hour or a flat fee, usually in the neighborhood of $2,500. I always offer the second choice rather than the first.
Before I comment on price, I think you should know what the components of a good plan are. For starters, this 'plan' is called an 'Investment Policy Statement' (read more here: http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2010.n12.1) by the CFA Institute, the pre-eminent organization of financial analysts and portfolio managers in the world. The IPS addresses such issues as:
1. Investment Objectives
--desired rate of return
- the ability to take risk AND
- the willingness to take risk
2. Investment Constraints
3. Asset Allocation - between equity (large cap, small cap, mid-cap, emerging markets, etc.), fixed income (Treasury obligations, corporate bonds (investment grade or 'junk'), etc.; alternative investments (real estate, private equity, commodities, etc.)
4. Investment Strategy - passive (index funds, ETFs, mutual funds) or active (seeking ';alpha'). Don't be surprised to hear that MOST individual investors should be 'passive' - beating the market is tempting, but almost always futile. . .and sometimes fatal financially.
The fee for such a document will vary according to the complexity of the situation. Usually, greater levels of investable assets result in higher complexity. Not only, but usually. For someone QUALIFIED to do an IPS--and I would seek out a CFA charterholder, perhaps in the Trust/Investments section of a good-sized bank (if there's not one, talk to a commercial lender for a recommendation - DO NOT USE A STOCKBROKER).
My hunch is that the fee will be at least $5,000. That's not chump change for most of us, but there should be real value in the document. . .if it's done right. Don't try to save money by cutting corners. Whatever you save will cost you a bucketful of cash on the investments you make later.
Above all, DO NOT get this done for free because that misaligns the incentives for the IPS preparer. At that point, her/his incentives are to recommend investments that generate commissions FOR THEM. Those might not be good investments FOR YOU. TANSTAAFL: There Ain't No Such Thing As A Free Lunch!
As stated below, you would expect a plan for $100-$400 an hour. Without details its hard to estimate a total cost because of things like:
Would you want the advisor to monitor your plan?
Do you want quarterly and annual meetings to go over the plan's progress?
I can customize a solution for you and lay out in detail what direction the plan should be going.
I can answer your question from the perspective of how I and the company I am affiliated with work:
Our clients do not pay fees for our services. We are paid commissions by the companies we are contracted through. We work with each client to create a custom plan for them while educating them along the way. Our clients must be proactive and part of the process.
We work only with financial vehicles that are 100% safe (no risk of loss), yet offering competitive growth.
Our philosophy is obviously different than traditional financial advisors. It's up to the individual to determine which works best for them.
I hope this is helpful.
Hi Mr. Johnson,
Financial Planner cost varied from $500-$6000 or more depends on your request/service that you need
A fee only financial planner will usually charge from 1% - 1.5% of total assets invested per year. Typically, nothing is charged for the consultation. Typically, a fee only financial planner will have a minimum amount that has to be invested with them $100,000 to $250,000)(
A financial adviser normally will not charge anything. The financial adviser gets paid based on the investments he places your assets in. If they want to keep your charges to a minimum, which they should, your assets will be invested on one company with a variety of mutual funds to invest in.
Michael Chindamo pretty much hit the nail on the head with his response. However, I work for a unique financial planning firm that is willing to take the risk of planning for no charge. Yes we do get paid a commission by the various carriers/companies out there if we make a recommendation that you find valuable and you place the business through us, but no there is no obligation whatsoever to pay for anything.
If you want a highly comprehensive "free" financial plan created by a highly collaborative team of planners and specialists, then we should have a conversation.
Check out this video
There is no easy answer here. Everything is dependent on what your requirements are and how in-depth you want the financial planner to go. For example, you may want to set up a Trust in which case, the planning required is a bit more complex and requires more time.
Some financial planners will draw up a plan for free if they are able to get you to take up their recommendations thereby earning them commissions. Other planners will charge an hourly rate for their work.
Bottom line is that you are comfortable working with the person you choose and are happy with the advice they have given you.
There are at least 50 different financial planning modules you could be asking about (a plan for: investments, retirement, college, social security, cash flow, safe withdrawal rates, etc.) Assuming you mean investment management, our wealth management firm publishes a gone fishing portfolio recommendation every year so that you can get that advice for free:
Assuming you mean a retirement plan, we have also published extensively for you to see if you are on track to retire at your target age without paying a fee:
It depends on the length and the scope of the services. It should be comprehensive in nature and should be monitored. Planners work in different ways, flat fee, hourly, or if they are managing assets they will sometimes do the plan for free. If it is a flat fee you should expect to pay between $1500 and $3500. Much will depend on the complexity of your situation and how much the planner will be involved after the plan is written.
Hi Scott. A stand-alone financial plan can vary based on the complexity of your situation but will typically range from $1500 to as much as $5000 depending on the firm and your situation.
Plan design is accomplished for the most part by a financial planning practitioner that knows how to write a plan. The best plans are those that are comprehensive in nature. Some planners write plans for free as long as they can attain a commissionable sale of products or assets under management.
If you are strictly interested in a written plan for a fee some charge a flat fee based on various criteria such as networth, time and other various criteria.
Another model would be those that write plans for a fee and then offer an annual update or adjustments along the way when a life transitioning event occurs.
Some planners charge by the hour. Rates can vary from around $125/ hr to $400/ hr depending on the level of expertise required. In our case we charge either by the hour or a flat fee not to exceed. We would be happy to offer you a proposal based on your personal circumstances. Basic financial plans can be a few hundred dollars and certainly be in the thousands depending upon the complexity of your situation.
$500 - $2,000 for a plan. It depends on your personal situation. I suggest you find an advisor who is a member of NAIFA, a professional association. I have someone in Texas who can do it for you. I'm not licensed right now for that work. A NAIFA member will have a code of ethics and will put the focus on you and your personal needs.