Key Points

• Definition of fee-only financial planning and how it differs from other types of financial planning.
• Benefits of fee-only financial planning for clients.
• Explanation of how fee-only planners are compensated.
• How to find a fee-only financial planner.
• Factors to consider when choosing a fee-only financial planner.

Introduction

Financial planning is a process that helps you manage your money so that you can achieve your financial goals. There are different types of financial planning, but fee-only financial planning is a type of planning that is becoming increasingly popular. So, what is fee-only financial planning? And how is it different from other types of financial planning? In this blog post, we will explore these questions in depth and provide you with all the information you need to know about fee-only financial planning.

Fee-Only Financial Planning: What It Is and Why It Matters

If you’re thinking about hiring a financial planner, you may have heard the term “fee-only” thrown around. But what does it mean, and why is it important? In this article, we’ll explore the ins and outs of fee-only financial planning, including how it differs from other types of financial planning and why it may be the best option for you.

Fee-only financial planning is a type of financial planning where the planner is compensated solely by the client, rather than by commissions or other forms of compensation from third-party vendors. This means that the planner has no financial incentive to recommend certain products or services, and is solely focused on helping the client achieve their financial goals.

Why is Fee-Only Financial Planning Important?

There are a number of benefits to fee-only financial planning, including:

1. Objectivity: Because fee-only planners are not compensated by commissions or other forms of third-party compensation, they have no financial incentive to recommend one product or service over another. This means that their advice is based solely on what is in the best interest of the client.
2. Transparency: With fee-only financial planning, there are no hidden fees or commissions to worry about. Clients know exactly what they are paying for, and there are no surprises.
3. Accountability: Fee-only planners are accountable solely to their clients. They have a fiduciary duty to act in the best interest of their clients, and can be held legally responsible if they fail to do so.

How to Find a Fee-Only Financial Planner

If you’re interested in working with a fee-only financial planner, there are a number of resources available to help you find one. Some good places to start include:

1. The National Association of Personal Financial Advisors (NAPFA): This organization is comprised of fee-only financial planners who have met certain qualifications and standards. You can search their database of planners on their website.
2. The Garrett Planning Network: This is a network of fee-only financial planners who offer hourly financial planning services. You can search their database of planners on their website.
3. The XY Planning Network: This is a network of fee-only financial planners who specialize in working with Gen X and Gen Y clients. You can search their database of planners on their website.

What to Look for in a Fee-Only Financial Planner

When choosing a fee-only financial planner, there are a number of factors to consider. Some things to look for include:

1. Qualifications: Make sure that the planner has the appropriate certifications and licenses, such as a Certified Financial Planner (CFP) designation.
2. Experience: Look for a planner who has experience working with clients who have similar financial goals and needs to yours.
3. Communication: Make sure that the planner is a good communicator and is able to explain complex financial concepts in a way that you can understand.
4. Services: Consider what services the planner offers, such as investment management, retirement planning, and tax planning.
5. Fees: Finally, make sure that you understand the planner’s fee structure and that it is transparent and reasonable.

Finally, not all fee-only financial planners are created equal – some may have more experience and qualifications than others. Just because an advisor doesn’t partake in the sale of financial products or life insurance doesn’t mean they understand the nuances of tax, estate, and financial planning.

How is fee-only financial planning different from other types of financial planning?

Fee-only financial planning is different from other types of financial planning in a few key ways. First, fee-only financial planners do not receive commissions for the products they recommend. This means that they are only compensated for their time and expertise, which aligns their interests with their clients. Second, fee-only financial planners are not beholden to any particular product or company, so they can provide unbiased advice. And finally, because they are not selling products, fee-only financial planners don’t have the same sales quotas as other types of financial professionals. This allows them to take a more long-term view of their client’s needs and goals and in doing so, give you objective advice and a comprehensive financial plan.

What is Comprehensive Financial Planning?

Comprehensive financial planning is a holistic approach to managing your finances. It takes into account all aspects of your financial life, including saving, investing, retirement, tax planning, and estate planning. The goal of comprehensive financial planning is to help you make informed decisions about how to best use your money to achieve your financial goals. Fee-only financial planning is a type of comprehensive financial planning. Fee-only financial planners are compensated solely by the fees they charge their clients. They do not receive commissions or other forms of compensation for selling products or services. This type of financial planner is often considered to be more objective than those who are compensated through commissions or other incentives.

Where should consumers look to find a fee only advisor in Denver? 

When it comes to finding a fee-only financial advisor, there are a few different avenues that consumers can take. Typically, the simplest way is to search through one of the many professional organizations that only accept advisors who offer financial planning as a fee-only service.

One option is to search for an advisor through the National Association of Personal Financial Advisors (NAPFA). By becoming NAPFA members, fee-only advisors have to pledge to adhere to a fiduciary standard when providing financial advice and to commit to remaining fee only and not getting involved in product sales.

Another option is to search for a Certified Financial Planner ™ (CFP®) professional by visiting cfp.net and asking the advisors you contact “are you fee only” because it’s not required to be fee only to be a Certified Financial Planner™. These professionals must also adhere to a fiduciary standard and are required to complete extensive coursework in financial planning.

In addition, prospective clients should search the Garrett Planning Network which typically only includes financial advisors who don’t offer wealth management services and work on a fee-only basis. These are advisors who charge a flat fee, or hourly fee and make sense for clients with specific needs on a one-time basis. 

Zoe Financial is another option as well. Zoe Financial is a professional organization that provides you the ability to search Zoe Financial Advisors, explicitly. Zoe only accepts the top 5% of advisors in the nation and has harsh requirements they have to meet including fee structure, experience, planning ability, investment strategy used, and professional designations/certifications.

Finally, consumers can also search for fee-only financial advisors through online directories such as the Fee Only Network to find the right fee only financial advisor for them. To join the fee only network, it’s required you be a fee only advisor as well.

Conclusion

Fee-only financial planning can be a valuable tool for anyone who is looking to achieve their long-term financial goals. By working with a fee-only planner, you can be sure that you are getting objective, transparent, and accountable advice that is tailored to your specific needs. So if you’re in the market for a financial planner, be sure to consider a fee-only planner as one of your options.