What should I pay my financial planner for ongoing advice?
Most people shouldn’t being paying $1,000’s p.a. for ongoing advice from their financial planner.
If you have a portfolio of managed funds held within a wrap or master trust, then your financial planner is unlikely to be able to justify charging more than $1,000-$3,000 p.a. for their ongoing support (including a review).
If your planner is charging you a % of your assets for ongoing service, that is a sign you are paying too much. A % fee based on the size of your portfolio is an arbitrary figure based on how much money you have, rather than the service provided.
Your instinct will often tell you if you are being asked to pay too much for ongoing support.
If you are unsure, contact me and I’ll give you an indication of what ongoing fee is reasonable, based on your situation.
A warning: get a firm idea of what ongoing fees your financial planner will charge you, before you commit to a financial plan. Many people tell me they pay for the initial Statement of Advice, only to find the ongoing fees are too high. If you find yourself in this situation, consider cutting your loses and look for another advisor. Or, renegotiate your ongoing fees (most financial planners will be open to this, if they think they may lose you).
Ongoing fees will end up costing you far more than the initial fee for advice and implementation of your portfolio.