Reasonable hourly rate for a cfp?

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Mardoc01
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Reasonable hourly rate for a cfp?

Post by Mardoc01 » Wed Oct 04, 2017 4:56 pm

In so fla where there are a ton of them. Money management and AA is all I'm looking for. Maybe meet on a quarterly basis for a discussion and tlh, rebalance recs etc. any opinions on a fair price ?

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tfb
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Re: Reasonable hourly rate for a cfp?

Post by tfb » Wed Oct 04, 2017 6:40 pm

Mardoc01 wrote:
Wed Oct 04, 2017 4:56 pm
In so fla where there are a ton of them. Money management and AA is all I'm looking for. Maybe meet on a quarterly basis for a discussion and tlh, rebalance recs etc. any opinions on a fair price ?
$200-300/hour, does not manage money therefore no %-of-asset fees.
Harry Sit, taking a break from the forums.

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FIREchief
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Re: Reasonable hourly rate for a cfp?

Post by FIREchief » Wed Oct 04, 2017 6:44 pm

Well I'll be the first to say $0 per hour is reasonable. Why pay for something you can do yourself for free? :confused

That said, if you hold enough assets at Fidelity, you can utilize the services of a "financial consultant" (not advisor) for a couple hours a year at my price point.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

HornedToad
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Re: Reasonable hourly rate for a cfp?

Post by HornedToad » Wed Oct 04, 2017 6:50 pm

FIREchief wrote:
Wed Oct 04, 2017 6:44 pm
Well I'll be the first to say $0 per hour is reasonable. Why pay for something you can do yourself for free? :confused
Same reason i go to a mechanic, or hire a handyman, housecleaners or a gardener.

I agree with the $200-300/hr, or depending on specific needs they sometimes do an overall financial review for ~$1500/2500 depending on where you live.

Make sure they are fee only. This is a site to generally find reasonable ones: https://www.napfa.org/

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FIREchief
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Re: Reasonable hourly rate for a cfp?

Post by FIREchief » Wed Oct 04, 2017 6:55 pm

HornedToad wrote:
Wed Oct 04, 2017 6:50 pm
FIREchief wrote:
Wed Oct 04, 2017 6:44 pm
Well I'll be the first to say $0 per hour is reasonable. Why pay for something you can do yourself for free? :confused
Same reason i go to a mechanic, or hire a handyman, housecleaners or a gardener.
I hire a mechanic because if I did it myself I would spend five times as long and probably break something.
I hire a handyman because I'm too old/lazy/unskilled to do some things.
I don't hire a gardener because I decided years ago to let my neighbors maintain nice yards while I sustain a nice clear view of them.

Just not seeing the parallel here. Bogleheads can do everything the OP mentioned in the comfort of their own homes without wasting any time/money to hire somebody else. Remember, by the time you know enough to hire a good financial advisor, you no longer need one (or something like that). :sharebeer
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Dottie57
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Re: Reasonable hourly rate for a cfp?

Post by Dottie57 » Wed Oct 04, 2017 7:02 pm

FIREchief wrote:
Wed Oct 04, 2017 6:55 pm
HornedToad wrote:
Wed Oct 04, 2017 6:50 pm
FIREchief wrote:
Wed Oct 04, 2017 6:44 pm
Well I'll be the first to say $0 per hour is reasonable. Why pay for something you can do yourself for free? :confused
Same reason i go to a mechanic, or hire a handyman, housecleaners or a gardener.
I hire a mechanic because if I did it myself I would spend five times as long and probably break something.
I hire a handyman because I'm too old/lazy/unskilled to do some things.
I don't hire a gardener because I decided years ago to let my neighbors maintain nice yards while I sustain a nice clear view of them.

Just not seeing the parallel here. Bogleheads can do everything the OP mentioned in the comfort of their own homes without wasting any time/money to hire somebody else. Remember, by the time you know enough to hire a good financial advisor, you no longer need one (or something like that). :sharebeer

+1

I maintained my calm when a co-worker said he had asked his "financial guy" about how to invest a lump sum from a small pension. Just smiled.

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Sandtrap
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Re: Reasonable hourly rate for a cfp?

Post by Sandtrap » Wed Oct 04, 2017 7:05 pm

Mardoc01 wrote:
Wed Oct 04, 2017 4:56 pm
In so fla where there are a ton of them. Money management and AA is all I'm looking for. Maybe meet on a quarterly basis for a discussion and tlh, rebalance recs etc. any opinions on a fair price ?
On one hand, you could get into a price war with fellow competition where "fair" gets lower and lower.

On the other hand, higher end clientele view lower prices as less capable.

Perhaps it would be wise to focus on a specific clientele and adjust accordingly. For example: If your referrals are from private country club golf communities and your peer group and yourself are golfers, then that would be that.

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Ged
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Re: Reasonable hourly rate for a cfp?

Post by Ged » Wed Oct 04, 2017 7:11 pm

FIREchief wrote:
Wed Oct 04, 2017 6:44 pm
That said, if you hold enough assets at Fidelity, you can utilize the services of a "financial consultant" (not advisor) for a couple hours a year at my price point.
That's ok if you ignore the sales pitch to invest all of your money in their high fee accounts.

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prudent
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Re: Reasonable hourly rate for a cfp?

Post by prudent » Wed Oct 04, 2017 7:15 pm

I wonder if anyone would agree to do money management on an hourly basis. Questions/reviews, yes, but it seems unrealistic to ask someone to manage your money that way. You'll want to control how many hours they will spend on your account, and they'll want to be able to do what they feel is necessary.

It took me a decent amount of time to find a CFP who would agree to meeting yearly, pay by the hour. He only agreed after I said I only needed to meet to go over what I already intended to do and why, and then get his opinion on whether it made sense. He made it crystal clear he would never proactively contact me or expect him to do anything other than listen to my plan and comment on it. We came to a good understanding and it's worked out fine. I learned that he had had some conflicts with clients who wanted to do pay-by-the-hour as needed, but felt the advisor should also contact them proactively if the advisor thought it made sense to do so. He said that kind of service is for AUM clients.

So perhaps be prepared for that kind of reaction.

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FIREchief
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Re: Reasonable hourly rate for a cfp?

Post by FIREchief » Wed Oct 04, 2017 7:18 pm

Dottie57 wrote:
Wed Oct 04, 2017 7:02 pm

I maintained my calm when a co-worker said he had asked his "financial guy" about how to invest a lump sum from a small pension. Just smiled.
That's funny. Back at Megacorp, some people would take great pleasure in telling the rest of us about their plans for lump sum pension payouts. The most popular approach was to hand it over to a certain local individual who would "manage it" for only 1.5% AUM. These were two comma plus payouts. Some of them were so excited about it that they wanted to help us novices by hooking us up with their "expert." One person proudly told me that this expert had been growing their money by around 8% per year and that "you can't get that anywhere else" (this was from about 2010 to 2015 when those of us with heavy equity portfolios were gaining around 30% per year). These people were really smart people capable of doing the math. Why "only 1.5%" seemed attractive to them baffles me to this day. :confused
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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FIREchief
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Re: Reasonable hourly rate for a cfp?

Post by FIREchief » Wed Oct 04, 2017 7:19 pm

Ged wrote:
Wed Oct 04, 2017 7:11 pm
FIREchief wrote:
Wed Oct 04, 2017 6:44 pm
That said, if you hold enough assets at Fidelity, you can utilize the services of a "financial consultant" (not advisor) for a couple hours a year at my price point.
That's ok if you ignore the sales pitch to invest all of your money in their high fee accounts.
I'm over five years into this and I've never heard such a pitch. Maybe you're referring to some other type of Fidelity service?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Dottie57
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Re: Reasonable hourly rate for a cfp?

Post by Dottie57 » Wed Oct 04, 2017 8:00 pm

FIREchief wrote:
Wed Oct 04, 2017 7:18 pm
Dottie57 wrote:
Wed Oct 04, 2017 7:02 pm

I maintained my calm when a co-worker said he had asked his "financial guy" about how to invest a lump sum from a small pension. Just smiled.
That's funny. Back at Megacorp, some people would take great pleasure in telling the rest of us about their plans for lump sum pension payouts. The most popular approach was to hand it over to a certain local individual who would "manage it" for only 1.5% AUM. These were two comma plus payouts. Some of them were so excited about it that they wanted to help us novices by hooking us up with their "expert." One person proudly told me that this expert had been growing their money by around 8% per year and that "you can't get that anywhere else" (this was from about 2010 to 2015 when those of us with heavy equity portfolios were gaining around 30% per year). These people were really smart people capable of doing the math. Why "only 1.5%" seemed attractive to them baffles me to this day. :confused

1.5% sounds small until you do the math. And realize the same assets will be experience a haircut year after year.

I must say until I learned of this site, I was as befuzzled as anyone. I started doing the math, got out of some opaque investments and figured out my expenses. Pretty powerful to realize retirement is not a dream.

I just wish my co-worker would smarten up. But he has enough on his plate with cancer.

fourwheelcycle
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Re: Reasonable hourly rate for a cfp?

Post by fourwheelcycle » Wed Oct 04, 2017 9:16 pm

I agree with the posts that note many Bogleheads would not feel they need to pay for advice on money management, AA, or rebalancing. However, the OP does not note their age or the size of their portfolio, so it is hard to tell how far along they may be on the Bogle experience curve.

I am almost seventy now, but when I was in my forties I used to take advantage of Vanguard's free financial plan preparation and CFP advisor services. I remember I went through a phase where I thought we should invest our entire bond allocation in high interest, long term bonds. My wife and I had secure jobs and good incomes, so I expected we would never need to use any of our bond allocation until retirement. I will never forget the Vanguard CFP who asked me why I owned any bonds at all if I was so confident we would never need to rely on them. That simple yank on my chain made me realize we held bonds in case something ever went wrong in our lives at a time when the equity market was down, so any bonds we held ought to be fairly stable in a broad range of markets, meaning they should be at least intermediate term rather than long term.

By my fifties I had moved to a three Vanguard index fund portfolio made up of 75% TSM and international, 23% intermediate bonds, and 2% cash. After 2000 I never added any more funds to the international, so now we have a mostly two fund portfolio with the same AA.

I see Vanguard still provides free sessions with their CFPs for any client with $500K or more in Vanguard funds. As with advice from any CFP, the OP would have to listen to the advice and decide what they want to do, but I do think Vanguard's CFPs should be as good as local alternatives if the OP can accept phone or video meetings rather than local face to face meetings. By the way, I never got a heavy product sell from any Vanguard CFP.

InMyDreams
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Re: Reasonable hourly rate for a cfp?

Post by InMyDreams » Wed Oct 04, 2017 10:42 pm

prudent wrote:
Wed Oct 04, 2017 7:15 pm
It took me a decent amount of time to find a CFP who would agree to meeting yearly, pay by the hour.
I found one - that's how she works: analyze the funds that are available to me in my various accounts, look at my overall finances, advise me on the AA based on those funds. I move the money around based on her recommendation. Review once a year. I've "met" with her twice now - all phone with internet. I deliberately sought a CFP/NAPFA advisor who was fee-only, no "Wealth Management". $200/hr. First review takes longer => higher costs. Subsequent reviews usually about half of the first.

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Ged
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Re: Reasonable hourly rate for a cfp?

Post by Ged » Thu Oct 05, 2017 7:59 am

FIREchief wrote:
Wed Oct 04, 2017 7:19 pm
Ged wrote:
Wed Oct 04, 2017 7:11 pm
FIREchief wrote:
Wed Oct 04, 2017 6:44 pm
That said, if you hold enough assets at Fidelity, you can utilize the services of a "financial consultant" (not advisor) for a couple hours a year at my price point.
That's ok if you ignore the sales pitch to invest all of your money in their high fee accounts.
I'm over five years into this and I've never heard such a pitch. Maybe you're referring to some other type of Fidelity service?
I certainly have. Plus it's up front right on the web page for Fidelity's Financial Planning Services.

https://www.fidelity.com/why-fidelity/planning-advice

Simply put, somebody or something has to pay these guy's salaries. 'Free' is not a real-world thing.

I think that their advice is ok for a relatively inexperienced investor IF you don't take their managed account pill. For experienced investors (like many here) it can be a reasonable cross-check of what you are doing but don't expect to learn anything new.

For more complex two comma situations I don't think it replaces a good fee-only planner.

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