What's a reasonable per-hour fee for FP advice?

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FrankNYC's picture
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Joined: 2008-08-18

...in New York (outer-borough)?  I'm an EA/taxplanner, just passed my 65 and will be incorporating fee-only fp to my part-time practice. 

MrBig's picture
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Joined: 2009-02-05

How about some reasonable advice: pick one, and do it well. If you want to offer other services, then partner with someone who specializes in that other service. Unless, of course, you enjoy giving "so-so" advice on each and charging clients a fee for it. There is way too much information in each of those fields for you to be GOOD at BOTH. So don't. Now that you're licensed , you could partner with someone and take a percentage for your referrals, though.

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B24
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What do you charge for tax planning?  I would think it should be about comparable.  I also think your average general practitioner attorney would be a good benchmark as well.  I would think somewhere in the $150-$250 range would be reasonable.  Unless you have some specific level of expertise or specialty, you can't really justify more than this.  Even $250 would be on the higher end if you are a basic planner.

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B24
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MrBig wrote:How about some reasonable advice: pick one, and do it well. If you want to offer other services, then partner with someone who specializes in that other service. Unless, of course, you enjoy giving "so-so" advice on each and charging clients a fee for it. There is way too much information in each of those fields for you to be GOOD at BOTH. So don't. Now that you're licensed , you could partner with someone and take a percentage for your referrals, though.
 
Tax planning and Financial Planning often go hand-in-hand.  Although I would agree, investment advisory work should be a full-time committment in order to get good at it, at least in the beginning when you are learning the business.  But if you are just giving basic financial planning advice and basic asset allocation recommendations to ordinary people (versus HNW people with complex situations), I don't see the issue.  But I rarley see a tax planner be REALLY good at investment management.  Most tax practices that offer investment management have a separate group that does the investment side.

Moraen's picture
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B24 wrote:What do you charge for tax planning?  I would think it should be about comparable.  I also think your average general practitioner attorney would be a good benchmark as well.  I would think somewhere in the $150-$250 range would be reasonable.  Unless you have some specific level of expertise or specialty, you can't really justify more than this.  Even $250 would be on the higher end if you are a basic planner.+1

FrankNYC's picture
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Joined: 2008-08-18

Thanks B24.  I've never charged a per-hour before; my tax-planning fee is incorporated into tax preparation.  I was thinking about $150/hr.  I've been working on the FP certificate online and will eventually go full-time once I have the nerve to quit my job (another 3-4 years, to ensure I have a nice nest-egg, just in case).
My clients are middle-class and the extend of my fp advise would involve setting-up their 401ks, allocation, 529s, mutual fund advice, etc.

anonymous's picture
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Joined: 2005-09-29

FrankNYC, do you know any people who have successfully become hourly fee-only planners?  What do they charge? 
 
Personally, I have never met anyone who makes a decent buck doing this.

B24's picture
B24
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I think if it is just an adjunct to his tax-planning service, there is no downside.  However, most "financial planners" I know started out doing fee-for planning, basically to help cushion the income shortfall until they had enough AUM to stop doing "planning".  The investment advisory work is the "fun stuff".  It's also the lucrative stuff.  You can never really bill enough hours to make financial planning very lucrative (other than advanced planners for the UHNW crowd, which usually involves tax attorneys, etc.).  Think about it....if you actually billed enough hours during the year to make a decent income, you would not have enough time to be prospecting for new clients.  And with financial planning, you're generally always needing new clients, as most people (again, other than UHNW) don't need a new plan every year.  Most of the clients I have picked up from the Ameriprise's of the world have bascially told me "I spent $1500 bucks on a 75 page document, and I don't feel like I am any better off today than a year ago."
 
But again, if you have a client that needs tax planning advice, it is nice to be able to also provide basic financial planning advice as well.

FrankNYC's picture
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Joined: 2008-08-18

That's exactly my plan B24.  I tried joining a firm part-time to get my series 7, but they all required full time (one RIA w/ an LPL platform did sponsor me, but LPL compliance nixed it).  Anyway, I hope this gets me in the fp door slowly (again, I still have 4-years before I go full-time). 

Moraen's picture
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Joined: 2009-01-22

anonymous wrote:FrankNYC, do you know any people who have successfully become hourly fee-only planners?  What do they charge? 
 
Personally, I have never met anyone who makes a decent buck doing this.There was a lady two doors down from me while I was at Jones.  She charged $500/hr for financial planning services.  She was making just over 800k a year last I checked.  She writes for the paper (the main municipality).  I would say that is a decent buck.  There is also a guy in the small town down from me who says he makes more than he did at a Merril, where he was for ten years.  I expect that he was a decent producer at Merrill if stayed there ten years.

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Moraen wrote: anonymous wrote:FrankNYC, do you know any people who have successfully become hourly fee-only planners?  What do they charge? 
 
Personally, I have never met anyone who makes a decent buck doing this.There was a lady two doors down from me while I was at Jones.  She charged $500/hr for financial planning services.  She was making just over 800k a year last I checked.  She writes for the paper (the main municipality).  I would say that is a decent buck.  There is also a guy in the small town down from me who says he makes more than he did at a Merril, where he was for ten years.  I expect that he was a decent producer at Merrill if stayed there ten years.
 
That is nice coin.  However, I think that is probably the exception, not the rule.  Even at $500/hr., that's 1600 billed hours.  That's 30 hours/week, 52 weeks/yr.  Are you sure that 800K doesn't include AUM fees as well?  She may charge $500 to avoid the nit-pickers that want the $500 plan. 

Moraen's picture
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Joined: 2009-01-22

B24 wrote:Moraen wrote: anonymous wrote:FrankNYC, do you know any people who have successfully become hourly fee-only planners?  What do they charge? 
 
Personally, I have never met anyone who makes a decent buck doing this.There was a lady two doors down from me while I was at Jones.  She charged $500/hr for financial planning services.  She was making just over 800k a year last I checked.  She writes for the paper (the main municipality).  I would say that is a decent buck.  There is also a guy in the small town down from me who says he makes more than he did at a Merril, where he was for ten years.  I expect that he was a decent producer at Merrill if stayed there ten years.
 
That is nice coin.  However, I think that is probably the exception, not the rule.  Even at $500/hr., that's 1600 billed hours.  That's 30 hours/week, 52 weeks/yr.  Are you sure that 800K doesn't include AUM fees as well?  She may charge $500 to avoid the nit-pickers that want the $500 plan.  positive that she doesn't have AUM.  She and I spoke extensively.  She asked me to join her practice because she turned a lot of people away.  She would work 10-hour days, most of the time.  She was contemplating raising her fee.  But said that every time she does it, the more referrals she gets.

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Moraen wrote:
anonymous wrote:FrankNYC, do you know any people who have successfully become hourly fee-only planners?  What do they charge? 
 
Personally, I have never met anyone who makes a decent buck doing this.There was a lady two doors down from me while I was at Jones.  She charged $500/hr for financial planning services.  She was making just over 800k a year last I checked.  She writes for the paper (the main municipality).  I would say that is a decent buck.  There is also a guy in the small town down from me who says he makes more than he did at a Merril, where he was for ten years.  I expect that he was a decent producer at Merrill if stayed there ten years.How did you check her income?

Moraen's picture
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Joined: 2009-01-22

BioFreeze wrote:
Moraen wrote:
anonymous wrote:FrankNYC, do you know any people who have successfully become hourly fee-only planners?  What do they charge? 
 
Personally, I have never met anyone who makes a decent buck doing this.There was a lady two doors down from me while I was at Jones.  She charged $500/hr for financial planning services.  She was making just over 800k a year last I checked.  She writes for the paper (the main municipality).  I would say that is a decent buck.  There is also a guy in the small town down from me who says he makes more than he did at a Merril, where he was for ten years.  I expect that he was a decent producer at Merrill if stayed there ten years.How did you check her income?

She told me.   And here is the funny part: She told me when I asked her as part of the questionnaire to open an account. She bought a couple of hundred thousand in muni bonds from me. At the time, she said that Schwab had thin inventory. I told her I would see what I could find. So, she could be lying for all I know, but I doubt it. She flashes more bling than even you Bio.

This was about four years ago. She's still there. And still has a column in the paper. PM me if you want her name.

B24's picture
B24
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Joined: 2008-07-08

Moraen wrote:
B24 wrote:Moraen wrote: anonymous wrote:FrankNYC, do you know any people who have successfully become hourly fee-only planners?  What do they charge? 
 
Personally, I have never met anyone who makes a decent buck doing this.There was a lady two doors down from me while I was at Jones.  She charged $500/hr for financial planning services.  She was making just over 800k a year last I checked.  She writes for the paper (the main municipality).  I would say that is a decent buck.  There is also a guy in the small town down from me who says he makes more than he did at a Merril, where he was for ten years.  I expect that he was a decent producer at Merrill if stayed there ten years.
 
That is nice coin.  However, I think that is probably the exception, not the rule.  Even at $500/hr., that's 1600 billed hours.  That's 30 hours/week, 52 weeks/yr.  Are you sure that 800K doesn't include AUM fees as well?  She may charge $500 to avoid the nit-pickers that want the $500 plan.  positive that she doesn't have AUM.  She and I spoke extensively.  She asked me to join her practice because she turned a lot of people away.  She would work 10-hour days, most of the time.  She was contemplating raising her fee.  But said that every time she does it, the more referrals she gets.

Damn. WTF are we doing wrong?

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