Time to Read: 6 Minutes.
Most people need financial advice at some point in their lives. Whether it’s managing a windfall, navigating the path to retirement or identifying a tax-efficient investment strategy, a financial advisor can provide valuable insight. It’s not difficult to imagine how you may benefit from the professional support of a financial advisor—but it’s often tricky to assess services and costs.
In this article, we outline three traditional approaches plus one emerging option, walking through a summary of the costs and potential benefits of each. We also explore which services are offered by BWM Financial (BWM) and why.
Option 1: Hourly financial planning
- Could be a good fit if: You have a few questions about a specific financial circumstance.
- Approximate cost: Hourly rates typically range from $150 to $400.
- Offered at BWM Financial? We have chosen not to offer our services via this approach for two reasons. First, we believe in the importance of a comprehensive solution that considers all facets of your financial life—not just a single area. Second, as with any hourly arrangement, costs can pile up quickly, which means clients often fret over the tally of billable hours. We believe ongoing dialogue is important and our experience has taught us that such open communication thrives in a worry-free environment focused on complete understanding, comprehensive solutions and assisted implementation.
Option 2: One-time flat rate financial plan
- Could be a good fit if: You have more than one or two questions about a financial plan or your inquiries warrant a deeper discussion and/or financial modeling.
- Approximate cost: Per-plan fees often range from $1,000 to $3,000.
- Offered at BWM Financial? We believe your financial plan should evolve alongside you, your family and your life—which means there isn’t much value in a static plan. Plus, when it comes to implementation, one-time plans will likely leave you stranded. Lastly, we believe managing your financial life is easier when done in bite-size pieces over time, which ultimately yields a greater likelihood of success.
Option 3: Ongoing comprehensive arrangement based on percentage of assets under management
- Could be a good fit if: You need ongoing expert financial advice, want “total wealth planning” (multi-level integration of financial planning, investment management and client service) and/or have substantial assets to be managed.
- Approximate cost: Expenses typically include a flat-rate annual fee for financial planning plus a percentage of your assets under management, often between 1% to 2% of your investment portfolio. At BWM, our service is competitively priced and aligned with your interests. Annual fees top out at 1% of assets managed and drop considerably for larger accounts. This fee represents the total advisory cost to our clients and includes trading costs, any annual account/custodian fees and all financial planning expenses.*
- Offered at BWM Financial? As of Q1 2020, we exclusively partner with our clients in this format.
A new option: Monthly retainer or subscription
- Could be a good fit if:You need ongoing expert financial advice but don’t yet have substantial assets to be managed.
- Approximate cost:Industry-standard fees for this emerging service are still being established. Lower-end offerings that feature access to a call service are approximately
- Offered at BWM? While currently not available, we’re excited to explore this service option and are currently building a list of interested people. While our specialty is helping families with at least $1,000,000 in investable assets, we understand there is a growing need for excellent advice for San Diego’s high earners who may not be “wealthy” yet, according to traditional standards. Our hope is to expand our reach and help more people while still maintaining our standard of excellence. Let us know if you’d be interested in a monthly subscription that would likely provide a comprehensive financial plan and action roadmap along with valuable perks, such as advisor coaching and market commentary—all supported by expert financial planning tools, techniques and guidance.
To learn more, check out 9 Reasons to Manage Your Wealth with BWM or Top Questions for Financial Advisors.
* Like all advisors, internal investment expenses are in addition to advisor fees. We strive to use investments that have minimal internal expenses. Mindful trading and indexing make these a small fraction of clients’ overall cost and low relative to industry standards.