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How much time is reasonable to develop an initial financial plan from a fee based planner?

The plan is to include assets review, life insurance, trusts, and retirement planning options? I have been told 20 hrs (200/hr) from a fee based planner but that seems high to me?

Sep 17, 2014 by Jeff from Cherry Hill, NJ in  |  Flag
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6 votes
Layton Jacob Cox Level 11

Hi Jeff,

It usually takes about a 2 hour meeting face to face for you to be able to convey your goals, assets, liabilities and give them the full financial picture.

Then, the planner has to go back and work through all the information you just gave him. This is the longest part of the phase. Depending on your situation, it could take from 1 hour to 40 hours. Do you have a complicated financial picture or are you simple. For examples:

Complicated: business owner, has company stock, has a pension, has outside real estate or royalty assets, has a 401k, has IRAs, has college accounts for their kids, has a goal to move out of the country, wants to leave an estate, gifting is a goal, life insurance review, and wants to have everything happen within the next 5 years.

Simple: employed as an employee, has a 401k, has a home, wants to retire at 65.

Then a final meeting for them to present to the plan to you, probably another 2 hours.

If you are complicated, then it's worth the time and money. If you are simple, you can probably find it somewhere else for cheaper.

Comment   |  Flag   |  Sep 17, 2014 from Tucson, AZ

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These are good answers from the other advisors. The fact that you have trusts can add substantially to the time depending on the number of trusts, types of trusts, and your relation to the trusts. Trusts documents can vary substantially from each other and it's important to read the trust documents for items like, investment discretion & restrictions, distribution instructions, assessing parties of the trust (grantor, beneficiary, remainder beneficiary, trustee, and successor trustee provisions), and to ensure that the trust is being managed according to the trust document. If that's in the scope of your review, then 20 hours seems reasonable to me depending on the other factors listed by the other advisors here.

Comment   |  Flag   |  Sep 18, 2014 from Austin, TX

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I agree with Layton. Depending on your situation, it may be easy or difficult to develop a financial plan To add a bit more to it, I typically segment my offering (globally) into 3 categories. A basic financial plan which could be anywhere from 3-8 hours for someone who is typically young and just getting started. A core financial plan, ranging from 7-15 hours for someone who has a bit more going on. A wealth management process which can be 15 hours or more for someone as described by Layton above.
As per usual, no simple answer to this question.

Comment   |  Flag   |  Sep 17, 2014 from Exton, PA

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Peter Cacioppo Level 16

Setting up a plan is just one aspect. I have found that if the planner does not meet with the client a few times a year for a number of years the plan is not implemented 100% and thus the initial charge is wasted. My clients are either high income from salaries or have over 1 million in investments, or both. We base our fees on the complexity of the situation but start at $5,000 a year. Just getting our clients to maximize their tax deferred savings each year "pays for" our fees!

Comment   |  Flag   |  Sep 24, 2014 from La Jolla, CA

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