When It Comes To Financial Planner Fees There Is No Such Thing As “Typical”.

Some financial planners charge fees in the form of commissions; others in the form of an hourly rate, and others as a percentage of your account value.

It means a financial planning fee can vary tremendously from planner to planner, so you want to know what to look for.
Here are the six types of financial planning fees you must understand before deciding your business model.

1. Commissions Paid To The Financial Planner.

This is the most common financial planner fee Before enter load abolished but still something is better than nothing . Some commission based financial planners provide quality advice; some are just good salespeople. The bad thing about commission is that the advice you give could be influenced by how much you will make on one product verses another.

2. A Percent Of Your Account Value.

A financial planner who works this way will charge a fee based on a percentage of client’s account value. If client’s account value grows, they will make more money. If client’s account value goes down, they will make less money. In this way they have an incentive to grow client’s account and to minimize losses. This type of fee can range from 2.5% per year on the high side to .50% per year on the low side. Typically the more assets you have, the lower the fee.

3. A Combination Of Fees and Commissions.

Many financial planners today can collect fees and commissions in both ways described above. They often use the term fee-based. It is important to understand the difference between a fee-only financial planner, and a fee-based financial planner.  Many fee-only Financial planners are emerging in India who are surrendering their agency code and providing pure advisory if you ask about purchase a financial product they have tie up with product vendor firms. 

4. An Hourly Rate For Financial Advice.

Just like advocate, or accountants, hourly rates will vary widely from planner to planner. Expect to pay a higher hourly rate for experienced financial planners, or planners who have an area of specialty. Lower rates will be charged by less experienced planners. Hourly rates can vary from Rs.500 an hour to well over Rs.3000 per hour.

5. A Flat Financial Planning Fee To Provide A Specific Analysis.

Since a flat financial planning fee is not tied to the value of investments, or generated by the purchase of any specific investment, client can feel confident you will receive objective advice. A flat financial planning fee should be quoted upfront, along with a clear description of what type of service or analysis will be provided. You must include follow up meetings, phone time and/or email questions in the fees.

6. A Quarterly Or Annual Retainer Fee to Provide Ongoing Financial Planning.

Since a retainer fee is not tied to the value of investments, or generated by the purchase of any specific investment, you can feel confident you will receive objective advice. After learning about the complexity of your situation, a financial planner can tell you what your quarterly or annual retainer fee would be, and what services are included for that fee. A written contract detailing the fee and services is usually provided. Financial planning retainer fees may vary from Rs.2,000 per year to over Rs. 40,000 per year for high net worth individuals.

Article is provided by:

Zahiruddin Babar

Chief Software Architect

REDVision Computer Technologies Pvt. Ltd.

email: query@redvisiontech.com

www.redvisiontech.com