How Much Does a Financial Plan Cost?
A financial plan can help you chart a clear path from where you are today to where you want to go. The plan will consider your unique preferences, goals, financial circumstances and more. The primary value of a financial plan comes from:
Peace of mind, which includes:
knowing you’re on track for your goals
knowing risks are being managed
knowing you have support as needed
Higher savings, which includes:
better financial habits
reduced taxes
lower fees on financial products
Comparing value and costs
The value of a financial plan should be compared to the cost to decide if it’s right for you. An average financial plan from an advice-only—also referred to as fee-only or fee-for-service—financial planner is ~$3,000, with most costing between $1,000 and $6,000. To understand what you can expect to pay, let’s look at what determines a financial plan’s cost.
Costs of a financial plan
There are three main cost factors for a financial plan. We’ll look at each in greater detail below to understand how much you can expect to pay. The main factors include:
The complexity of your personal and financial situation.
The experience and training of the financial planner or their team.
The level of detail provided in the plan.
The complexity of your personal and financial situation
There are two types of complexities for a financial plan.
The number of decisions that need to be made, examples include:
How much should you save for retirement?
How much risk should you take with your investments?
Where should you deposit your money?
The number of considerations for each decision, examples include:
Unique health circumstances
Multiple citizenship
Owning a corporation
Financial planners use training, experience and specialized software to answer these questions for your unique circumstances. A more complicated situation will require a more experienced planner and often more time to develop and discuss the plan.
Examples of how complexities can impact the financial plan include:
A US person may not benefit from using a Tax-Free Savings Account (TFSA) since they may need to pay taxes on the account.
An individual with a disability or shorter life expectancy will have different spending considerations in retirement.
Owning investments outside of Canada causes tax implications.
A couple that owns a small business will have unique opportunities and challenges to distribute money and plan for taxes.
If you’re a Canadian citizen in your 30s or 40s, with a salaried role and some debt or investments, you should be able to get a quality financial plan for $1,000 to $3,000. If you’re a couple approaching retirement, with investments abroad, a small business and three children to whom you wish to leave a structured estate, you’ll likely need to pay between $3,000 and $6,000.
The experience and training of the financial planner or team
The more complex your situation, the more experience and training your financial planner should have. Some financial planners have a specific type of client they work with (e.g., business owners, retirees, early-career). If you can find a planner specializing in supporting clients like you, they’ll be more likely to identify rare opportunities and risks. Other financial planners work in a team, where each member has an area of expertise. This allows them to meet your needs, no matter your situation.
To meet your needs, financial planners go through specialized training and share best practices across the industry. Financial planners with additional industry training (e.g., credentials) and more experience often charge more for their services. Areas of specialization and the corresponding credentials you may see include:
Financial planning
Certified Financial Planner (CFP)
Personal Financial Planner (PFP)
Qualified Associate Financial Planner (QAFP)
Investing
Chartered Financial Analyst (CFA)
Chartered Investment Manager (CIM)
Taxes
Chartered Professional Accountant (CPA)
Insurance
Chartered Insurance Professional (CIP)
Estates
Trust and Estate Practitioner (TEP)
If you’re working with a financial planner with limited credentials or experience, you should expect to pay between $1,000 to $1,500 for a financial plan. You want to ensure the individual has enough training and experience to understand your situation and provide informed recommendations. If the financial planner has several designations and decades of experience, you can expect to pay $3,000 to $5,000. These individuals have dedicated years to advancing their knowledge to help identify the best options for you.
The level of detail provided in the plan
The final consideration is the detail and support surrounding the financial plan. The following list provides steps often included in developing your financial plan, and an estimate for the time required:
Introductory discussion to explain the offering and align on the scope of work (1 hour)
Discovery discussions to understand your priorities and current situation (2 hours)
Use of specialized software to model your spending and wealth over time (3 hours)
Independent analysis tailored to your unique case (e.g., estate planning, business succession) (2 to 5 hours)
Discussion to review the plan and answer any questions (1 hour)
Support implementing the plan (2 hours)
A proxy to determine how much you can expect to pay for a financial plan is to consider how many hours it will take to develop it. Most financial planners charge an equivalent of $100 to $200 an hour, depending on the factors we discussed above. Therefore, a plan that takes 10 hours can range from $1,000 to $2,000. A plan with more details and support may take 20 or more hours to develop and implement, costing upwards of $4,000.
Finding your right fit
At Ripple Financial Planning, we focus on helping individuals and families in their early to mid-career. By specializing on a smaller set of individuals who typically have less complicated personal and financial situations, we can offer comprehensive financial plans for $1,800. In addition, we find that because these individuals have a long time to follow through on the financial plan, they realize a great deal of value. You can learn more about our solutions and pricing or schedule a free 30-minute consultation call to address any questions.
For those with more complex needs, please feel free to reach out and we can find the right fit for you with a different provider. Several options include Spring Financial Planning, Caring for Clients, Parallel Wealth and Objective Financial Partners.