Fees
Fee-only, plainly: who pays a planner, and what each way of paying pulls toward
What fee-only means at this practice, the other ways planners are paid, and the questions that tell them apart.
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How the practice is paid
What fee-only means here
Fee-only means the practice is paid only by the people it works for: no commissions, no ongoing payments from fund companies or insurers, and no referral fees from any attorney, accountant or insurance professional it names. It does not mean conflict-free.
There is nothing to sell here: no insurance, no annuity, no fund, no account. The practice never holds, moves or manages your money; you act on a plan in your own accounts, wherever they already are.
If you ask, the practice gives you more than one name for an attorney, an accountant or an insurance professional, and takes nothing from any of them. You choose, and you may already have your own.
Three ways a planner is paid
Each is common, and each is described here in general terms, without anybody's figures.
Fee-only
The planner is paid only by the client: a flat fee, an hourly rate, a yearly fee, or a percentage of the savings it looks after. Nobody else pays it anything when the client acts on what it says.
Fee-based
The planner charges the client a fee and may also be paid a commission when the client buys a product through it. The name sits close to fee-only and means something different, which is why it is worth asking which of the two a planner means.
Commission
The planner is paid by the company whose product the client buys, such as an insurance policy or an investment, and may charge the client nothing directly. The advice and the sale arrive together.
Fee-only says who pays, not how the fee is worked out. That is why two fee-only planners can charge in entirely different ways, and why the next question after who pays is always how much, and for what.
We don't charge a percentage of anything. A fee that grows with your savings would pull a planner toward keeping money invested, when a household may decide instead to pay off a loan, buy a home or send money to family.
Every fee has a pull
Every way of being paid has a pull in it. A flat fee can reward doing less work; an hourly fee can reward taking longer; a year of planning can reward keeping you as a client. A real planner names these and tells you how it handles them: here, the scope of every plan is written down before it starts, every hours estimate is in writing, and the year of planning ends by itself.
- SEC press release 2024-121 (opens the source in a new tab) Nine advisers settled charges that included claiming conflict-free advisory services they could not substantiate, membership of an organization that did not exist, unsubstantiated awards and testimonials not from clients.
Questions to ask any planner about pay
Ask them of any planner, this one included, before you sign anything.
How would you be paid for my work, in dollars?
A figure in dollars can be compared with another. A percentage, a commission or a payment from somebody else has to be worked out first, so ask for the figure for your household.
Does anybody but me pay you when I follow your advice?
This is the question fee-only answers. A planner paid by a product's maker, or for sending you to someone, has a reason to prefer that product or that someone.
What does the way you are paid pull you toward, and what do you do about it?
Every way of being paid pulls somewhere. A useful answer names the pull and says how it is handled; an answer that there is none is the one to be wary of.
What will I have in writing before I pay anything?
The scope of the work, what it leaves out, the fee, when it is billed and how either side can end it. Anything that is not written down is a conversation, not an agreement.
Ask for a first meeting
A first meeting costs nothing, gives no advice and asks nothing of you afterwards: about forty-five minutes, at the office or by video. The office replies in office hours.