Frequently Asked Questions
1. How much does a financial planner cost?
Costs vary, but you can expect one of three models. An hourly rate typically runs from $200 to $400 per hour for specific consultations. A flat fee for creating a comprehensive financial plan might range from $2,000 to $7,500. The most common model for ongoing wealth management is a fee based on a percentage of assets under management (AUM), usually around 1% per year for portfolios under $1 million (the percentage often decreases as the portfolio size increases).
2. I don’t have millions of dollars. Can I still get financial advice?
Absolutely. You don’t need to be wealthy to benefit from financial planning. Many planners offer services for clients at all asset levels. Look for professionals who charge an hourly or flat-project fee. They can provide valuable advice on budgeting, Social Security, and creating a retirement plan without requiring you to have a large investment portfolio for them to manage.
3. What’s the difference between a financial planner and a stockbroker?
A CERTIFIED FINANCIAL PLANNER™ (CFP®) typically takes a holistic view of your entire financial life and, if they are a fiduciary, must act in your best interest. A stockbroker (also known as a registered representative) is primarily licensed to buy and sell securities. They historically operated under a “suitability” standard, meaning their recommendations only needed to be suitable, not necessarily the absolute best option for you.
4. How often should I meet with my financial planner?
For ongoing management, most people meet with their planner once or twice a year to review their portfolio, discuss any changes in their life, and make sure their plan is still on track. You should also reach out to them anytime you are considering a major financial decision or experience a significant life event.
5. What if I’m not happy with my current advisor?
You have the right to change advisors at any time. The relationship is built on trust, and if that trust is gone, it’s time to move on. The process is relatively simple. You will find a new advisor you are comfortable with, and they will handle the paperwork to have your accounts transferred from your old firm to their firm. You do not need to have a difficult conversation with your old advisor if you don’t want to; the new advisor’s firm will manage the transition.
For official information on Social Security and Medicare, visit SSA.gov and Medicare.gov. Federal tax information is at the IRS.
Disclaimer: This article is for informational purposes and is not a substitute for professional financial or tax advice. Consult with a certified financial planner or tax professional for guidance on your specific situation.
