It’s complicated: Cost of planner depends on your needs

Elanor Blayney, Consumer Advocate

By Kathy Canavan 

If “saving” isn’t a household word for you, you may be loath to show your balances to a financial planner.

“Believe me, they’ve seen it all before,” said Eleanor Blayney of the Certified Financial Planner Board of Standards. “That’s what we’re in the business of doing—helping people when they have negative emotions about money. Part of what we do is to get you to a financially secure place. We don’t expect people to come in financially healthy.”

The good news is financial planners typically offer one free consultation. When shopping around, check their websites. They often list the net worth of typical clients, so you can pick a planner who is a good fit.

Remedying your finances is not like curing a cold—there’s no standard fix that works for every patient. Blayney said it could take a professional 20-50 hours to prepare a plan that addresses everything your future self will need.

The number of hours depends on your needs—retirement planning, insurance questions, budgeting advice, tax advice, and estate planning.

There are three ways that fee-only financial planners are paid: by the hour, by the project, and as a percentage of assets handled.

Hourly fees generally range from $75 to $300, with some very experienced advisers charging more, Blayney said.

Fee-only planners may charge a project fee instead—one fee for meetings, comprehensive plan preparation, and the presentation of the plan.

In some cases, planners who are helping clients manage their assets will charge a percentage of assets under management. Typically, the percentage is one percent, Blayney said, but it might go up, if the assets under management are very modest, or down, if the assets are very large. “Oftentimes, that does include the financial planning, but not always, so it’s important that people ask,” she said.

Blayney encourages would-be clients to find planners in their areas at and take advantage of the free look-sees that many offer. “Ask for an introductory meeting. It’s very, very typical to be able to come in and meet the planner on a complimentary basis,” Blayney said. “It’s really at that meeting that the scope of what’s needed is defined. It really needs to be scoped out. You will learn things at that meeting.”

For one thing, you’ll learn whether you click with the planner. “It’s very important to have a good relationship with your planner,” Blayney said. “Your introductory meeting will give you a sense of the fit, the chemistry, and how they work.”

You’ll also learn what the planner’s advice will cost you, but Blayney warned that choosing on price alone may not be in your best interest. “It’s like anything else:
If you shop just on price, you may be making a bad choice,” she said. “Oftentimes, the value of what we provide is measured in helping people avoid very large mistakes or preventing a large tax burden.”

You’re not necessarily going to find an adviser you trust and can afford on the first interview, she said. You may have to talk to a few planners before you find your Goldilocks adviser.

“It’s just very important to make sure that your financial planner has a high standards of practice and is a fiduciary who is giving you advice that is in your best interest and not in someone else’s best interest,” Blayney said.

Don’t fret if you’re not Mr. Moneybags, and you think you can’t afford advice. If you’re truly limited, oftentimes advisers will recommend alternatives within your budget.

“We are not magicians, and I can’t create a sun-drenched yacht as your retirement dream home out of nothing, but there’s always something we can do,” Blayney said.

Sometimes, she said, it’s a matter of managing expectations and helping clients realize what’s possible.

Two ways advisers are compensated:

  • Commission-based advisers receive payments from financial companies for selling insurance and investment products to their clients, so they typically don’t charge clients for their services.
  • Fee-only advisers take no commissions. They charge their clients hourly fees, so they have no incentive to sell clients any particular products.


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