When it comes to hiring a financial advisor, many people wonder: How much will it cost me? If you’re looking for transparency and flexibility, an hourly financial advisor might be the perfect solution. Unlike traditional advisors who charge ongoing management fees, hourly financial planners allow you to pay only for the services you need, when you need them.
In this post, we’ll break down how much a certified financial planner hourly rate might cost, explore the factors that affect financial planning hourly rates, and explain why choosing an hourly advisor can save you money in the long run.
Why Hire a Financial Advisor by the Hour?
Hiring a financial advisor by the hour is a growing trend, especially for people who prefer to handle most of their own investments but still want expert guidance for specific situations. Hourly financial planners are ideal for DIY investors or anyone looking for a second opinion without being locked into an ongoing contract.
Key Benefits of Hourly Financial Advisors:
- Pay only for the services you need: Whether it’s help with a retirement plan, tax strategy, or portfolio review, you only pay for the services you need.
- Maintain control of your investments: You stay in control of your finances without handing over the management of your portfolio.
- No hidden fees or long-term commitments: You know exactly what you’re getting and how much it will cost upfront.
- Flexibility: You can consult an advisor as often, or as little as needed to make sure you’re on track with your goals.
What is the Hourly Rate for Financial Advisors?
The hourly rate for financial advisors can vary widely based on the advisor’s experience, location, and the complexity of the services provided.
Here are a few factors that influence financial planning hourly rates:
- Experience: Advisors with years of experience and certifications, like CFP® (Certified Financial Planner), typically charge higher rates due to their expertise.
- Location: Advisors in larger cities or areas with a high cost of living might charge more than those in smaller towns.
- Services Offered: Comprehensive financial planning (covering everything from budgeting to estate planning) will generally cost more than a one-hour consultation for a specific financial issue.
How Much Does a Certified Financial Planner Charge per Hour?
If you’re seeking advice from a certified financial planner (CFP), the hourly rates are typically on the higher end of the spectrum due to the rigorous training and certification process they undergo. A certified financial planner hourly rate generally ranges from $250 to $500 per hour.
But why do CFPs charge more? A CFP® designation indicates that the advisor has met stringent requirements in financial planning, including passing a comprehensive exam, gaining years of relevant work experience, and adhering to a strict code of ethics. As a result, clients receive top-tier advice and comprehensive planning that covers all aspects of their financial life. For a complete list of requirements, visit the CFP Board’s website.
Is Paying for Hourly Financial Advice Worth It?
If you’re looking for tailored, expert advice without the commitment of ongoing fees, then yes—hourly advice is worth it.
Here are some situations where paying an hourly rate makes sense:
- Tax Strategy: Consult an advisor before the year-end to look for ways to minimize your tax bill.
- Retirement Planning: Get a full retirement plan that ensures your savings will last throughout retirement.
- Investment Review: Have your investment portfolio reviewed to make sure it’s aligned with your goals, and risk tolerance.
- Smaller portfolio: Many traditional advisors only work with people with over $500k to invest. If you don’t meet the minimum requirements set by traditional advisors.
- Save money: You want to keep more of your money to invest and avoid ongoing asset management fees.
One of the biggest advantages of paying hourly is that you can get specific advice without handing over control of your entire portfolio or paying hefty asset management fees. For many people, this results in significant cost savings over time.
How to Choose the Right Hourly Financial Advisor
When searching for an hourly advisor, it’s essential to find someone who aligns with your financial goals and has the right credentials. Look for a certified financial planner if you want someone with comprehensive training. Ask questions like:
- What is your hourly rate?
- What are your qualifications?
- How many years of experience do you have?
- Can you provide a clear estimate of how many hours my financial plan will require?
- What’s your investment philosophy?
Be upfront about your needs and budget. Many advisors offer free consultations, so take advantage of that opportunity to see if they’re the right fit.
For a comprehensive list of hourly-based financial advisors, visit the XYPN or NAPFA websites and filter by “hourly”.
Conclusion: The Value of Transparent, Hourly Advice
Choosing a financial advisor who charges by the hour offers transparency, flexibility, and control over your financial planning process. You know exactly what you’re paying for, and you can seek expert advice when it matters most—whether you’re making investment decisions, preparing for retirement, or looking for tax-saving opportunities.
If you’re interested in learning more about hourly financial planning and how it can work for you, schedule a free consultation with us today. We’ll help you determine how much time and advice you need to reach your financial goals, without any hidden fees or ongoing commitments.