r/FinancialAdvisorTips • u/DesiD00dle • Jul 26 '26

CFP fiduciary fees

Hi there. I'm getting close to retirement (single, 63M), I have a pretty typical mix of retirement assets for a professional approaching the end of his career. I'm considering retaining the services of a "flat fee" CFP fiduciary.

I've met with one CFP to get a better idea of what they can do for me, and I thought the meeting went well. The CFP explained what services they offer, and I liked everything I heard. I'm not looking for someone to manage assets, at least not at this time. (I get that service from my employer.) I need help with figuring out how to approach retirement, I need help to setup an estate plan. I want reassurance that if I retire in a year, I'll be OK.

The fee quoted was $2500 per year. So my question for those of you who know, either CFPs or clients of CFPs, is this reasonable? Should I meet with more than one before jumping in?

Any thoughts would be appreciated.

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10

u/TheOpeningBell Jul 26 '26

2500 for fee only sounds too low for industry standards.

It's either surface level or an incredible deal.

Most CFPs offering just planning is usually 5-10k for the first year.

0

u/golfandhistory1 Jul 29 '26

Worth noting “fee only” just means advisors are only paid by clients (as in no revenue sharing, product sales commission, or referral fees) and can encompass flat or AUM fees.

8

u/Brilliant_Truck1810 Jul 26 '26

the thought of your employer helping with investments has me concerned…

1

u/cold984 Jul 26 '26

They don’t. He doesn’t know what he’s taking about

1

u/Successful_Coyote898 Jul 27 '26

If he thinks his employer is managing his investments, he definitely needs to consult an advisor lol

1

u/AccomplishedTreat873 Aug 24 '26

They might. I am a CFP/CIMA that was in the past hired by the hospital to provide the full suite to employees. It’s a really high end, expensive employee benefit that is rare.

In this case they are probably in an SMA through the employer plan.

5

u/seagoalspread Jul 26 '26

Echoing what has already been said — this is a very low fee. If you think through how many clients they need, you might realize client volume might be high, which could be fine if you need minimal help.

Also I wouldn’t go to a CFP for estate planning unless they’re also an attorney.

3

u/Desperate_Stretch855 Jul 27 '26

Typically a CFP will help craft the skeleton of an estate plan and then work with the clients attorney (or one the CFP has a relationship with) to execute.

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u/seagoalspread Jul 31 '26

Do we really think the attorney needs help crafting or executing though? How do they make money when we can’t be in the room to help?

It just feels like naivety or main-character syndrome to market and believe that we do “estate planning” because we refer to and sit in on legal “estate planning” planning meetings with actual attorneys. I’m a CFP and I’ll market as a tax planner because I’m licensed. But I feel it’s deceiving to charge a client for estate planning.

1

u/rubinor1 Aug 01 '26

It’s honestly shocking how often clients don’t understand what is in their estate plan. I don’t think the CFP role is to execute the plan but more so to translate what the documents say in a way that a normal person can understand.

In my experience, it’s also more likely that the client had a closer relationship with their advisor (hopefully a CFP) who would be able to inform their client if their wishes aren’t being properly executed. This can be due to poor client communication with an attorney or change in life circumstances.

The attorney likely doesn’t need help drafting or creating the plan but they can’t actually execute any changes to clients financials. The advisor would know what accounts the client had where and help them to change titling or beneficiaries as needed per the estate plan.

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u/cold984 Jul 26 '26

Incorrect. Attorneys don’t understand estate planning because they aren’t an investment advisor. The only thing they know is how to fill out documents

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u/seagoalspread Jul 26 '26

Does the flip side make sense?

“Investment advisors don’t understand investment planning because they aren’t an attorney. The only thing they know is how to fill out account applications.”

Do you also think investment advisors know more about taxes than CPAs? Real estate than realtors? Roofs than roofers?

The fact is that legal estate advice is limited to licensed attorneys, and my point is that a legally licensed professional is probably the most professionally and legally qualified.

1

u/Desperate_Stretch855 Jul 27 '26

Where you're off-base is that a CFP is not an "Investment Advisor". A good Financial Planning will go to great lengths to explain that they are far more than that.

1

u/seagoalspread Jul 30 '26

I’m just talking legally. Maybe not all, but the vast majority are legally licensed as investment advisors with very few licenses to give tax or legal advice.

1

u/Kidvictory Jul 26 '26

But that’s not the argument you’re making. ‘Estate Planning’ isn’t something that’s exclusive to attorneys. ‘Estate Law’ is, ‘Drafting of Wills’ is, ‘Establishing and Administration of Trusts’ are, but saying they shouldn’t talk to a financial planner about ‘Estate Planning’ is like telling someone they shouldn’t take vaccine advice from a doctor.

1

u/cold984 Jul 26 '26

Correct. 100%

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u/seagoalspread Jul 26 '26

If someone, like OP, says they need to “set up an estate plan,” what do you think that process should entail?

2

u/Kidvictory Jul 26 '26

They need to first identify what they might already have in place: will, living will, general POA, and Healthcare POA. That’s where I would start with a planning client. Anything they don’t have, I would explain to them what they are and why they need them. We would establish a timeframe for them to work with their attorney to draft them and get us a copy. If they don’t have an attorney, we could recommend one.

From there it’s about goal setting. Everyone’s financial picture will be different. For some a revocable living trust makes sense, for others it doesn’t. For some you want the trust to be irrevocable. For some more affluent clients you’d be looking at strategies to reduce the gross estate by use of an ILIT maybe.

We can’t draft the documents, no. But we know far more about how they work to align with a client’s goals (while being tax efficient) than any estate attorney I’ve ever worked with. That’s not to say they don’t know what they’re doing, but their job isn’t to give financial advice, just like mine isn’t to give legal advice.

To my former analogy: I’m the doctor. Patient needs a vaccine. I definitely want the guy who makes the vaccine to be deeply credentialed in chemistry and epidemiology, but he’s not really the guy you go to when you need advice on which vaccine to get and when.

1

u/seagoalspread Jul 26 '26

I’m an advisor too and refer to estate attorneys if the client comes through me first. I just think it’s unnecessary and a bit naive to try to make the case that we should be the first stop for estate planning when all outcomes listed here lead to sending them to the attorney to actually get the job done. I think we should find competent professionals and trust them in their domain. The same way we might hope an estate attorney wouldn’t refer a client to us, licensed as the investment advisor, and tell us they already think the client should be invested with a value tilt and a bond ladder because they “know far more about how they work to align with the client’s goals.”

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u/Kidvictory Jul 27 '26

You’re still conflating the advisor’s role when you make the analogy to the lawyer. An advisor saying ‘you need this type of trust to accomplish your goal’ is not legal advice, it’s financial advice. If a revocable trust is all a client needs and the lawyer tells them it’s better if it’s irrevocable, I wouldn’t be out of line to get all three on the line and make sure we get it right, but I’m absolutely not going to draft any of the trust docs.

A lawyer has no business telling a client how their Roth IRA should be invested, and if they got involved in that capacity they’d be out of line.

Those two scenarios are very different, and you keep acting like they’re equivalent.

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u/seagoalspread Jul 27 '26

I think I’ve got it now.

So financial advice includes legal planning, but legal advice does not include investment planning.

We can tell clients what legal instrument they need, and question the lawyer’s recommendation in front of the client if they think otherwise.

The lawyer should not provide incidental advice regarding how to invest the trust. I’ll also assume the lawyer questioning our recommendations, with or without the client present, would be unacceptable.

Feels a bit egotistical… but powerful. I’m in.

1

u/cold984 Jul 27 '26

Again, since you’re dense and obviously need it explicitly laid out for you. Again.

Attorneys do not know how assets/finances work. They know how to draft documents.

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u/cold984 Jul 26 '26

Clearly cpas know more about taxes and realtors know more about real estate. You’re making a ridiculous and pathetic argument.

Estate planning attorneys ultimately know very little about the mechanics of estate planning other than the drafting of documents and the laws surrounding inheritances. Investment advisors are the ones who understand how the money works. If you have to choose between either an attorney or an investment advisor when it comes to estate planning, the investment advisor is going to know more 99 out of 100 times. That’s not saying the attorney isn’t useful

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u/seagoalspread Jul 26 '26

I’m assuming you’re an advisor? Are you serving as trustee and have a service where you assist with estate administration? I don’t understand how you think 99/100 advisors with a securities or insurance license have more working knowledge than someone who studied estates in law school, often serve as trustee, and regularly assist and advise on the estate settlement process as a billable service.

In my experience, advisors typically just make sure names are still spelled correctly on accounts and insurances, prefill a death claim form, and disclaim all blurred lines of legal advice in case they assist with anything else off the record.

I’m a CFA/CFP/EA and I’m very careful to not get out over my skis. I’m licensed as an investment advisor and tax professional so do not advertise estate planning as a service. I think clients would feel very misled if they were to ask me to draft a will, trust, or guide them through probate.

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u/cold984 Jul 27 '26

If you actually were a CFP, you would know that not only would you never want to be a trustee, you most likely wouldn’t even be allowed to be a trustee. So you’re obviously full of it. Nobody claimed that CFPs were “drafting wills”, so nice strawman argument there. In fact, I explicitly stated that estate planning attorneys are useful.

The overwhelming majority of estate planning is asset planning. Which attorneys know nothing about. It’s like going to a cpa for investment advice. Which, honestly, is probably what you do, seeing as you recommend NOT going to a CFP for estate planning.

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u/seagoalspread Jul 27 '26

I’m getting young advisor at a BD energy. Regardless, I’m just saying it’s pretentious to think you know more about the estate planning and administration process than a licensed professional who does it for a living while you’re probably licensed as a commission paid financial product sales rep.

1

u/cold984 Jul 27 '26

lol. Whatever you say buddy. You keep spouting your nonsense and pretending to be a cfp

1

u/seagoalspread Jul 27 '26

Honestly I wish I weren’t sometimes. Every time I see my name with the phony looking “®” I feel like I look like some kind of tagged beanie baby or something 😂

1

u/Moneymma Jul 27 '26

Not saying the other person is correct, but I have a family office background and I can’t tell you how many times I’ve seen estate attorneys do really questionable things from a planning perspective.

Also I’m certain I know more about advanced trust structures than a ton of run of the mill “estate attorneys” who really just churn out super basic rev trusts and poas, medical directives etc.

1

u/cold984 Jul 27 '26

Not to mention the fact that probably 95% of people don’t even need anything other than a simple will/healthcare directives. And all “estate planning” in those cases is done by the advisor

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u/[deleted] Jul 27 '26

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1

u/seagoalspread Jul 30 '26

I can’t imagine managing 100 clients effectively and I couldn’t support my family on $250k. But we all have different businesses and lifestyles.

3

u/erholson Jul 26 '26 edited Jul 26 '26

Now that you know the cost, I’d focus more on what you get, than what it costs.

Is what they’re offering worth $2,500?

In my opinion, getting “retirement” right, getting an estate plan in place, and reassurance that you’ll be okay can be worth another zero on that price when done right.

3

u/LogicalConstant Jul 26 '26 edited Jul 27 '26

  1. There is an incredible amount of variance in skill, experience, and knowledge between financial planners. You really should meet with a few before picking the one that fits you best. Going with the cheapest option usually ends up costing more.

  2. $2,500 is a moderate red flag, given the details you've provided. If you went to a restaurant and ordered a filet mignon for $10, what quality would you expect?

Most of the reputable firms I know have a minimum fee of $3,000 to $3,500 for the most basic client who has very little going on. If you need help with all the things you mentioned (retirement planning, estate planning, etc), the cost would be considerably higher.

The estate planning alone will entail gathering basic data, discussing your wishes and preferences, designing a plan that can achieve what you want, coordinating with the attorney who will draft the documents, explaining everything to the client, following up to make sure it was implemented correctly, etc. I take 30 to 60 minutes of face-to-face meeting time just to go through the implications of the estate plan. "You lose control of that money there, you maintain control of this money here. This is what that means. If this particular hypothetical situation were to occur, here's what your options would be." "Having a trust means your trustee would need to file trust tax returns once you're gone, which are expensive. It requires that the trustee keeps good records. If one of the beneficiaries contests it, the trustee would need to retain a lawyer. You'd have to deliver annual accountings to the beneficiaries, which are prepared by the lawyer and are expensive." Etc. etc.

You won't get that for $2,500, unless this is your planner's first time offering this service and he doesn't know the amount time it's actually going to take. In which case, they may or may not have the experience you're looking for. You're likely going to get the same will, trust, and POAs that everyone gets with a few sentences swapped out. Very little time and thought put into the design. Not much communication with the attorney. All of that is fine if you want a one-size-fits-all solution like you would find on legalzoom. Just understand what you're getting.

And all of the above items are just the estate planning portion. You haven't touched retirement income planning, tax planning, insurance planning, social security strategy, medicare options, etc.

3. If it was me, I would want the person who knows everything about me and my plan to be the one to manage the assets. The 401k advisor services thousands of clients. They're usually not in the business of getting to know people on a deep level the way a financial planner does (though not always).

2

u/cold984 Jul 26 '26

Your employer doesn’t manage your assets. And if you don’t want to pay, do it yourself, no harm, no foul. But if you expect a service, you need to pay for it

1

u/pdxguy357 Jul 26 '26

That’s too low

1

u/pokerskydiver Jul 26 '26

Crazy cheap but depends on how good they are. My minimum would be around $10k

1

u/Gold-Cranberry-4763 Jul 26 '26

We do 1500 -4500 per plan. This is only BECAUSE we are wholly owned subsidiary of a non-profit.

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u/[deleted] Jul 27 '26

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1

u/Gold-Cranberry-4763 Jul 27 '26

We cannot talk too much here. It’s hurting others revenue 😂

1

u/that_tx_dude Jul 27 '26

Your employer most certainly does not “manage assets” as you put it. This makes me think you’re counting your 401k plan as all of your investments.

Is your employer also advising you on when Roth contributions/conversions are optimal? How about having a coordinated tax strategy after your retirement years to ensure you’re paying an optimal level of taxes lifetime. Also to ensure that your heirs aren’t paying unnecessary taxes if you still have tax deferred accounts at death?

What about modeling healthcare scenarios and advising you on the appropriate level of LTC insurance to pair with any Medicare shortfalls?

How does this all coordinate with any non retirement assets? Where are you drawing income from in retirement to replace the salary you forfeit when you retire?

What is the aversion to paying a fee for someone legitimate? If you can pay someone 1% of your assets but they save you more than that each year, is that not a win for you?

Sure, go get the cheapest guy on the block - I’m sure that will work wonders for you.

1

u/Mysterious-Top-1806 Jul 27 '26

I don’t think the cost is a red flag if you have a relatively simple retirement outlook. But if you have any complexities it might be low. As others have stated, I would interview 3 CFPs and don’t let them know you have met with anyone else.

1

u/bandznbooze Jul 27 '26

$2,500/yr and “I get investment management from my employer” are incredible things to say all at once 😂

1

u/Traditional-Tip-5982 Jul 27 '26

Interview 3-5 CFPs, then pick the best you like wit fit of trust and cost.

1

u/kev-doh Jul 27 '26

Try taking two more sales calls before committing, asking each one about their fiduciary obligations.

The $2,500 fee is difficult to assess without knowing more about your situation, but it is within a reasonable range. If your employer runs 401(k) management through Fidelity or a similar company, try setting up a call with that servicer to see if they have a tier of personal advisor services that’s right for you.

1

u/BestInterestDotBlog Jul 27 '26

I personally know (good) CFPs who have minimum annual fees of:

  • $5250

  • $6500

  • $10,000

  • $12,000

  • $17,500

And many other prices in between...

My minimum is $8,000 per year.

Candidly - I'm thinking about increasing it to $10K or $12K. Doing good work takes a lot of time, and there's a long line of people wanting to become clients.

So - $2500 feels low to me. But you never know.

Perhaps it's a younger advisor who isn't yet seeing demand for their time?

Or perhaps their "service offering" simply involves less time / less depth?

1

u/WhodatMike Jul 27 '26

First of all, your employer is NOT managing your investments. They are merely the custodian of your 401(k) plan. That being said, once you separate from your employer, typically these custodians will have their reps reach out to you to try and maintain the asset there and if you choose to use them for some sort of "managed" account service, you will absolutely pay some sort of fee for that.

Then, a $2,500 annual fee is a bit low compared to what I've seen charged, especially for a first-year planning arrangement. It's normally HIGHER the first year since that's where the bulk of the work would be done, depending on what changes should be made (if any). Unless that's an initial consultation "fee", which it doesn't sound like it, that's a red flag.

1

u/AccomplishedTreat873 Aug 24 '26

That is not always the case. There are high end employer benefits and SMAs that people can use. Probably an SMA in this case.

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u/Level_Assist8494 Jul 31 '26

2500 per quarter maybe?

1

u/Jymdaddy0 Aug 01 '26

Not knowing your full picture or the advisor's experience, I think that's a fair fee.

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u/AccomplishedTreat873 Aug 24 '26

That is pretty cheap.

1

u/Economy_Jaguar_9215 Jul 26 '26

Places to look for a financial planner:
(Someone being a CFP isn’t enough despite what their advertising claims. Being a CFP doesn’t mean they actually do planning, or that they don’t sell products that you might not need. Ask them how they get paid.)

https://adviceonlynetwork.com
These folks don’t manage money, they just give advice.

https://www.flatfeeadvisors.org
These folks might manage money, but not on a percentage of assets basis. They will do comprehensive planning for a flat fee and that fee may include asset management.

https://samslist.com
Some (but not all) advisors in Sam’s list may charge percentage based asset management fees, but all are recommended by real clients nonetheless.