Types of Financial Planning Fee Structures

Financial experts use a variety of fee structures when charging clients for financial planning services. Knowing the services and time commitment that are important to you and knowing what’s available from each unique professional or group is necessary, so you are fully aware of your compensation obligations. You might be surprised about some of the financial planning fee structures available, so it’s worth your while to learn about the multiple offerings and choose the right financial expert based on this knowledge.

Straightforward Fee Structure

Clients who work with a financial planner who operates under a straightforward fee structure know exactly what services they’re getting, when they’re getting them, and why that firm’s methodology is right for their interests. In other words, in a straightforward operation you get what you pay for and know exactly what you’re getting.

Annual retainer fees are a straightforward feed structure that allow for flexibility, minimal planning interruptions, and the management of a wide range of needs, from retirement planning to estate planning, investment management to risk management.

Hourly Fee Structure

As simple as it gets, the hourly fees are calculated when your dedicated financial professional keeps track of how much work they do for you. It’s tough for clients to figure out how accurate these costs really are and the unpredictability of an hourly fee is often unappealing.

Flat Fees

One fee for one thing, that’s the easiest way to define flat fees in financial planning. If you want advice for buying a home or drawing up a will, each item will be charged one flat fee no matter how little or how much work it takes. These planning sessions are comfortable for many clients because they are clear and consistent.

Assets Under Management

A common fee structure often profitable only for high-net-worth investors, the assets under management (AUM) fee structure is meant for people who pay for financial guidance based on their assets. On the downside, there can be a question about conflict of interest and objectivity in today’s marketplace.

Subscription Fees

A firm may offer ongoing financial planning and charge monthly subscription fees, which includes a collection of services provided by a financial expert, from advice to meetings. Subscriptions are predictable and not necessarily tied to market performance and eventually help clients feel like they’re getting comprehensive service.

Blended Fees

If any of the financial planning fee structures mentioned here is combined with another, it’s considered a blended fee structure, which can work for clients who want some freedom while still working to establish a long-term relationship with their financial planner. This could also be considered a straightforward fee structure that delivers value, transparency, and fair compensation.

Get a Straightforward Fee Structure from Michigan Financial Planners

We use a straightforward financial planning fee structure at Hollander Lone Maxbauer in Southfield, MI. If this feels like the right type of payment system for your needs, schedule a consultation and learn about our services and how we can help support you and your financial goals.