You do not have to be wealthy to rent a monetary advisor
Your bank balance doesn’t have to stop you from hiring a financial planner.
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There is a big misconception that financial planning is only for the rich. The truth, however, is that financial planning is a path for anyone to actually achieve wealth.
The aim of financial planning is to get people to achieve their desired goals in life. It doesn’t matter when you start or how much money you have, experts say. All that matters is that you achieve these final goals.
Traditionally, many advisors charge you a percentage – say 1% – of your assets under management. So if you don’t have $ 250,000 or $ 500,000, you might not be able to turn to them.
It changes. A growing number of consultants bill in other ways so that more people can access their services.
“You don’t have to be rich to work with a financial planner,” said Justin Nichols, a certified financial planner and director of operations for the Garrett Planning Network in Manhattan, Kansas.
For example, the 200+ consultants in the Garrett Planning Network offer the option to pay for financial planning by the hour. “Our consultants agree to work with a wide range of clients, not just the rich,” said Nichols.
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What kind of services can people get by the hour? The list is long: budgeting, debt management, insurance and estate planning, savings and investment assistance, social security strategy, and guidance for charity.
And just because you pay an advisor every hour doesn’t mean you can’t have a long-term relationship with them: Around half of the clients who do this on the Garrett Planning Network return to their advisor for reviews and financial controls, Nichols added.
The average hourly rate charged by an advisor on the network is $ 215, but fees can range from $ 150 to more than $ 500, Nichols said. Some customers only need three hours of help, others 12.
“A client may not need or be unwilling to pay for a comprehensive financial plan, but they really only want to focus on a few pressing and important areas of their personal financial life,” said Nichols. “You can achieve this targeted planning more easily just by paying by the hour.”
In the meantime, other consultants charge a monthly or annual subscription to be able to see customers without large bank account balances.
Eric Roberge, CFP and founder of Beyond Your Hammock in Boston, bills some of his customers $ 333 a month. (The program costs $ 4,000 per year, “split into monthly payments to make it easier for customers to manage their cash flow,” said Roberge.)
“We’re reaching people who tend to ignore traditional financial advisors,” said Roberge. These clients are often just beginning to take their goals seriously, “and may be investing outside of retirement accounts for the first time or dealing with complexities like stock compensation.”
For that $ 4,000 annual cost, customers can meet with a personal financial planner up to five times in their first year and two to three times in subsequent years, Roberge said.
We consultants can help people so much and so easily with our collective knowledge and expertise. Why do only rich people get this help?
Founder of Flow Financial Planning
Jason Howell, CFP and President of Jason Howell Company in Vienna, Virginia, also offers customers the option to pay a flat annual fee – $ 5,000 for the first six months and $ 5,000 per year thereafter.
Often times, it is the steps taken at the beginning of the financial journey, even if they haven’t amassed much wealth by then, that will determine how the rest of the game plays out, Howell said.
“The needs of younger professionals are often focused on building their first emergency fund, combining finances with a significant other, taking full advantage of employer-sponsored retirement plans and starting a life insurance program while they are young, healthy and thin,” he said.
Meg Bartlett, CFP and founder of Flow Financial Planning with offices in Washington, California and New York, said charging a flat fee to clients – their median is $ 6,000 per year – instead of a percentage of their assets under management allows those to work with them that may not have salted a lot, but are highly deserving. (Your average customer makes $ 140,000 or more per year.)
“When you can start a business that can serve more people profitably, you will find it easier to find customers,” said Bartlett.
The more selfless motivation?
“We consultants can help people so much and so easily with our accumulated knowledge and expertise,” said Bartlett. “Why do only rich people get this help?”
In fact, even hourly and flat fees will be too expensive for many, she said. For these, Bartlett recommends reading books such as “I Will Teach You To Be Rich” by Ramit Sethi and “How a Second Year Beats Wall Street” by Allan Roth.
In the meantime, some counselors who realize their fees are too high for most people are offering group coaching and classes, she added.
“It won’t be as powerful as a personal relationship with a consultant, but it will be a lot cheaper,” said Bartlett.