Are you wondering about the consultation fees for financial planners or wealth advisors, and what it costs to engage a wealth advisor?
In this post, we’ll discuss the typical costs, which can range from four to five figures for a series of one-on-one consultations.
This means anywhere from 1,000 to say, 20,000. Let me explain why there’s such a wide range.
How Financial Advisor & Wealth Planner Charge Fees
There are generally three ways that wealth advisors, planners, or financial advisors charge their fees:
- Based on your net worth or income level
- Commission-based, depending on the financial products you purchase from them.
- A fixed or flat fee, agreed upon mutually depending on the complexity of your financial situation. This determines the time needed for consultation, often calculated at an hourly rate.
Here, we mostly operate on a fixed or flat fee basis. We believe this is the fairest method because it doesn’t depend on your net worth, income, or the value of your investment portfolio. It’s not about how rich you are.
Cost to Speak to a Financial Advisor or Wealth Planner
Typically, there’s no cost for an initial meeting with a financial planner or advisor. It’s like looking at a menu in a restaurant before deciding to order. If you haven’t ordered, there’s no obligation to pay. Similarly, you wouldn’t know the cost of car repairs without a mechanic’s assessment.
How much to Pay Financial Advisor or Wealth Planner for Advice
The fees depend on the preliminary assessment of your needs, the time it will take, and the complexity of your case.
It’s also crucial to check whether your advisor is certified and licensed. A certified but not licensed advisor might charge lower fees, but for the best advice, look for someone who is both certified and licensed.
Understanding the consultation fee involves knowing the issues you need advice on. This helps estimate the time required to deliver the consultation. The only way to determine this is through an assessment session, where the scope of advice needed is clarified, and an estimate of the time involved is provided.
In other words, it will be unethical for us to give you advice without understanding the issues you need advice on.
If anyone quotes you a consultation fee without taking the time to understand you and the issues you need advice on, run the other way because that means they are just financial products sales person.
We do NOT charge fees based on your net worth, income or value of your investment portfolio (in other words, how ‘rich’ you have). We think this is the fairest for you as a client.
Is it worth engaging a Financial Advisor or Wealth Planner?
It depends on the problem you’re facing. For minor issues, like budgeting tips, you might not need professional advice as this information is readily available online.
However, for significant financial decisions, professional advice can be invaluable.
For example, if a client feels overburdened by an insurance premium costing 10,000 annually and we help reduce it to 6,000, the savings of 4,000 each year for potentially 20 years justify the consultation fee.
Another example is deciding between ordering food delivery for 50 or spending hours cooking at home. If your hourly wage is 500, the time saved by ordering food delivery makes it worth the cost.
How much is the Price for Comprehensive Financial Plan?
Regarding comprehensive financial planning, fees can also range from thousands to tens of thousands, depending on the complexity and scope of advice. If you’re new to financial advice, consider starting with modular financial planning to address the most urgent issues before expanding to other areas.
This approach allows you to test the waters and see if the advisor’s style and the advice provided meet your needs before committing to more comprehensive services. This way, you avoid over-committing financially by seeking advice on all aspects of your personal finances at once.
I hope this gives you a clearer idea of what to expect in terms of costs when seeking advice from a financial planner, advisor, or wealth planner.
Related
Guide To Getting A Financial Planner In Malaysia – iMoney
Financial Planning: Fees will result in better advisory services
Financial planning cost malaysia | Dr Duit