What does financial planning cost?
Well, that depends
For most simple scenarios, I’m able to offer the planning at no cost to you. For these cases, I would be compensated based on commissions and fees. Financial planning costs shouldn't be a barrier to getting a plan. But depending on the size of the planning problem or the scope of the engagement, it might make more sense to work on a fee basis.
Most people I have worked with would be reluctant to shell out a few thousand dollars to have a financial planner draft a plan. That's why I work the way I do.
Our initial meetings? No cost. A basic financial review? No cost. Many people are only looking for general financial education, help identifying short, medium, and long term goals, help making strides toward those goals, and annual reviews. So for this kind of advice, I’m able to offer my advice at: No cost.
More complicated financial planning needs can be obtained on a fee basis through Evolution Strategies Ltd. In the end, the fees charged directly to more complicated planning clients may be less than those baked into their investing fees & expenses.
Okay, but how do I make a living?
Well, if for example we end up seeing a need for risk management as part of your plan and I end up working with an insurer to deal with that risk, I'm compensated directly by the insurance company. If we end up not doing any business together, that's fine. You're welcome to use my recommendations to sort things out on your own. I'm confident, though, that by the time we've worked together getting a plan together you'll want to keep working with me to get the show on the road. Also, if you end up cancelling a policy within two years, I have to pay back the insurance company. That gives me an extra motivation to make sure that you're comfortable with the plans we're putting in motion.
How about for investments?
Investments are a little different. I’m a believer in simple, low-cost index investing and for most of my clients, working with an automated investing platform like ModernAdvisor is a great fit. It’s online, accessible, and less of a drag on investment returns than a traditional mutual fund. Evolution Strategies Ltd has a referral relationship with ModernAdvisor and receives referral fees.
Needs more complicated?
Let’s talk. If your situation has more variables, a fee-for-service relationship with Evolution Strategies Ltd. might be a better fit.
Well, there are a few other little bonuses that sometimes come my way, such as productivity bonuses, conferences, and other incentives. I may also receive a renewal commission if you keep an insurance policy in force.
There you have it. That's how I make my bread and butter. I always share this with my clients: it's just the right thing to do.