How Much Should I Charge for Financial Planning? Guide to Rates

Understanding Your Value Before Setting a Price

Before you put a dollar figure on your services, you must deeply understand the value you provide. Fee-only financial planning isn’t just about managing investments; it’s about providing clarity, security, and a roadmap to clients’ financial goals, saving them time, reducing stress, and potentially saving or making them far more money than your fee.

Consider the following when assessing your value:

• Client Outcomes: What tangible and intangible results do clients achieve? (e.g., retiring earlier, buying a home, funding education, achieving peace of mind).
• Complexity Addressed: Are you handling simple accumulation phases or complex situations like executive compensation, business ownership, or multi-generational wealth transfer?
• Your Expertise & Credentials: Do you have specialized certifications (CFP®, ChFC, etc.), advanced degrees, or years of specific experience?
• Your Niche Specialization: Serving a specific niche (e.g., tech employees, doctors, business owners) allows you to develop deep expertise and provide highly tailored value.

Your pricing should reflect the significant impact you have on clients’ lives, not just the time spent or assets managed.

Common Pricing Models in Fee-Only Financial Planning

Fee-only firms primarily rely on direct client fees, avoiding commissions. The structure of these fees can vary:

• Assets Under Management (AUM): A percentage of the client’s investment portfolio value (e.g., 1% on the first $1M, scaling down). Still common, but faces challenges with clients accumulating significant assets and questioning high dollar fees during market downturns. Example: A client with $2M might pay 0.80%, or $16,000 annually.
• Hourly Fees: Charging a set rate per hour. Simple to understand but penalizes efficiency and creates unpredictable costs for clients. Example: Rates might range from $150 to $500+ per hour depending on expertise and location.
• Project-Based Fees: A flat fee for a specific, defined scope of work, like a comprehensive financial plan, a retirement analysis, or an estate review. Provides cost certainty for the client. Example: A comprehensive plan might cost $3,000 - $8,000+.
• Retainer or Subscription Fees: A recurring fee (monthly or quarterly) for ongoing access to advice and planning services. Popular for clients who value ongoing support and can provide a more predictable revenue stream for the firm. Can be tiered based on complexity, net worth/income, or service level. Example: Tiers might range from $150/month for basic planning access to $1,000+/month for complex situations and high-touch service.

Many firms utilize a hybrid approach, perhaps combining a smaller AUM fee with a retainer, or using project fees for initial plans and then transitioning to a retainer for ongoing service.

Calculating Your Costs and Target Profit Margin

While value-based pricing is ideal, you must know your costs to ensure profitability. Calculate your total operating expenses (salaries, rent, software, marketing, compliance, etc.) and divide by the number of billable hours or clients to understand your cost per unit of service.

Your target revenue should cover these costs and provide a healthy profit margin. Industry benchmarks can offer guidance, but ultimately, this is specific to your firm’s efficiency and desired profitability.

Don’t forget to factor in non-billable time like business development, admin, and professional development.

Packaging Your Services for Clarity and Value

Instead of listing individual services, package them into clear tiers or bundles. This simplifies the client’s decision and encourages them to see the cumulative value.

Consider packaging based on:

• Client Stage: Early career, accumulation phase, pre-retirees, retirees.
• Complexity: Simple needs vs. complex situations (executive compensation, business ownership, etc.).
• Service Level: Basic planning access vs. comprehensive ongoing support, investment management, and coordination with other professionals.

Presenting tiered packages (e.g., ‘Foundation’, ‘Growth’, ‘Comprehensive’) allows clients to choose the level that best fits their needs and budget, anchoring higher-value packages and making mid-tier options look more appealing (a common pricing psychology tactic).

Tools like PricingLink (https://pricinglink.com) are designed specifically for presenting these kinds of configurable service packages and tiers interactively, making it easy for clients to understand their options and see how different choices impact the total fee.

Presenting Your Pricing Effectively

How you present your financial planning fees is almost as important as the fees themselves.

1. Communicate Value First: Always discuss the client’s goals, challenges, and the value you’ll provide before introducing pricing.
2. Be Transparent: Clearly explain your fee structure and what’s included. Avoid hidden costs.
3. Offer Options: Presenting 2-3 clear packages or tiers (as discussed above) gives clients a choice and helps them self-select.
4. Use Technology: Move beyond static PDFs or spreadsheets. Interactive pricing presentations allow clients to explore options (e.g., adding a specific planning module) and see the price adjust in real-time. This provides a modern, transparent experience.

For firms looking to modernize their pricing presentation beyond traditional proposals, PricingLink (https://pricinglink.com) focuses specifically on creating interactive, shareable pricing links. While it doesn’t handle full proposals or e-signatures (for which tools like PandaDoc (https://www.pandadoc.com) or Proposify (https://www.proposify.com) are excellent), its strength lies in providing a clear, configurable way for clients to engage with your service options and pricing upfront. It’s an affordable ($19.99/mo) way to filter leads and streamline the initial pricing conversation.