What is a flat fee financial advisor? If you’re preparing to hire an advisor, learn if an advisor who charges a fixed cost is right for you.
A growing number of financial advisors offer services for a flat fee as an alternative to traditional pricing models (e.g., charging you 1% of the value of your portfolio managed by the advisor). Especially as your net worth grows, you may find a flat fee compensation arrangement can save you thousands of dollars each year vs. an advisor who is paid a percentage of the assets they manage for you. And, of course, the less money that goes to your financial advisor means more money available for you to spend in retirement.
If you’re thinking about hiring a flat fee financial advisor, it’s important to look under the hood to understand what services are offered and how the fee is calculated. For example, a flat fee charged by some financial advisors may include developing a financial plan for you but not investing your money on your behalf. Other flat fee financial advisors might include investment advisory services.
And just because a financial advisor charges a flat fee doesn’t mean every client will pay the same rate. In many instances, the flat fee might be calculated based on your income, portfolio size, and/or the overall complexity of your individual circumstances.
What Services Will I Receive for a Flat Fee?
Flat fee financial advisors will typically outline exactly what is included in this planning service, with different tiers for more comprehensive planning. For example, the flat fee may include creating a detailed financial plan for your debt, goals, investments, and more. Be sure to ask the financial advisor upfront if they will implement the plan for your investments on your behalf or if they will leave it up to you to follow the details of the plan.
In certain instances, you may only require a flat-fee financial advisor’s work one time (in which case, you may want to consider an hourly financial advisor, though the same financial advisor may offer both pricing models and should steer you to the pricing model likely best for your individual needs).
How Much Does a Flat Fee Financial Advisor Really Cost?
Clients of flat fee financial advisors often work together for many years, where the flat fee is often billed quarterly. The cost of hiring a flat fee financial advisor can vary significantly from $1,000 to $10,000 per year (or more), depending on the scope and detail of the financial plan provided, whether or not investment management is involved, and the complexity of your circumstances.
Should I Hire a Financial Advisor Who Charges a Flat Fee?
If you plan to establish a longer-term relationship with a financial advisor who charges you a fixed cost each year, a flat fee financial advisor may be an ideal solution for you. This is especially true for affluent clients with larger asset balances above $1 million who are seeking ongoing investment management and planning in retirement.
How to Find the Best Flat Fee Financial Advisor for You
📍 Click on a pin in the map view below to discover flat fee financial advisors who can work with you to develop a personalized financial plan. Or click the Grid option to view these advisors in a directory.