When shopping for a financial planner, it’s natural to ask, “How much do you charge?” If you expect a simple, one-sentence answer, think again. There are many ways that advisers get paid and it can get complicated. Their fee structure reflects the type of practice they want to run and the business model that reinforces their brand.
One of the best ways to vet an adviser is to ask how they arrived at their fee structure and why they chose it. What motivates them to charge the way they do? “Every adviser loves to argue about which way [of getting paid] is the best and which is the worst,” said Chris Cybulsky, a certified financial planner in Austin, Texas. Many advisers base their pay on a percentage of assets under management (AUM). The percentage, traditionally 1%, often varies based on the amount of a client’s investable assets. Other popular options include charging an hourly fee or flat per-project fee (perhaps to craft a customized financial plan). In recent years, some advisers have adopted subscription pricing that offers tiers of ongoing service with different monthly or annual retainer fees. If you want to hire an adviser for both financial planning and investment management, you might encou …
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One of the best ways to vet an adviser is to ask how they arrived at their fee structure and why they chose it. What motivates them to charge the way they do? “Every adviser loves to argue about which way [of getting paid] is the best and which is the worst,” said Chris Cybulsky, a certified financial planner in Austin, Texas. Many advisers base their pay on a percentage of assets under management (AUM). The percentage, traditionally 1%, often varies based on the amount of a client’s investable assets. Other popular options include charging an hourly fee or flat per-project fee (perhaps to craft a customized financial plan). In recent years, some advisers have adopted subscription pricing that offers tiers of ongoing service with different monthly or annual retainer fees. If you want to hire an adviser for both financial planning and investment management, you might encou …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]