5 Reasons to Work With a Flat-Fee, Fee-Only Financial Planner

Written By Francisco Ayala

In a recent three-part series, I examined two subsets of Fee-Only financial planning compensation: Assets Under Management (AUM) and Flat Fees. I wanted to highlight both compensation models and provide evidence why I believe the Flat-Fee model is a more progressive and inclusive way for financial planners to provide their services to meet the needs of their clients.

If you’re not familiar with these compensation types, a quick explainer… With AUM, a financial planner charges a percentage of the assets they manage for a client in exchange for financial advice and investment management—usually around 1%. AUM is the most common model of fee-only compensation. With Flat Fees, a financial planner charges an hourly rate, project-based (or one-time plan fee), or subscription (usually monthly) fee. While hourly and project-based planning usually don’t include investment management because the engagement ends after a specified period, the subscription-based model does allow for it.

I hope you’ll check out the full series, but I also wanted to outline my argument as a list. Take a look and please reach out if you’d like to discuss how we can work together. Our services are designed around you, not your portfolio. 

Here are my top 5 reasons for working with a Flat-Fee financial planner.

  1. Flat fee financial planners typically don’t have portfolio minimums so we don’t discriminate against families beginning their wealth-building. We give the same advice whether your portfolio is $10k or $10 million.

  2. Flat-fees eliminate conflicts of interest tied to portfolio size so we have no incentive to artificially increase or not decrease your portfolio. No unnecessary rollovers, excessive risk-taking, or discouraging paying off debt. 

  3. Flat fees are stated in dollars so you always know what you’re paying, usually an annual, quarterly or monthly subscription fee. AUM is based on percentages that tend to obscure the true cost.

  4. Flat fees stay relatively flat so you won’t have fee inflation of 10%. See how this plays out over 30 years.

  5. Flat fees align better with the service of providing financial advice. Our advice is objective (we don’t speculate to “beat the market”) and applies industry best practice to everyone. Portfolio size is a poor indicator of the amount of work we do.

Need more info? Check out the entire Flat-Fee, Fee-Only Advantage series. Or if you’re ready to get started, click below to schedule a free, no pressure 15-minute intro call.

Francisco Ayala

Francisco became a financial life planner to help his clients live authentically with financial freedom. Like many, Francisco struggled to find joy in society’s version of well-being. He found endless consumerism draining and lacking true happiness. It wasn’t until a long period of self-reflection and discovering his personal values that he started to understand what it meant to him to live with purpose. With this newfound perspective, he began aligning his money with his true interests and began living intentionally. He is motivated to help others do the same.

https://www.coleridgegroup.com/about/#our-team
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The Flat-Fee, Fee-Only Advantage – Part 1: Reduces Conflicts of Interest