Hourly Financial Planning: A new method to help you manage your investment portfolio?

Hourly Financial Planning offers a distinct approach to financial advice. Unlike traditional models that charge a percentage of assets under management. This service bases fees on the time a financial advisor spends working on your specific financial plan. This approach provides greater flexibility and transparency for clients. By paying only for the time required, individuals can access expert guidance without committing to long-term contracts or paying fees based on the size of their portfolio. Hourly Financial Planning is ideal for those seeking tailored advice without the traditional fee structure.

Is this a new thing?

Hourly Financial Planning is a relatively new concept compared to the traditional asset under management (AUM) model. While the idea of paying for professional services by the hour is not entirely new, its application to financial advice has gained significant traction in recent years.

The growing popularity of hourly financial planning is largely driven by a desire for greater transparency, flexibility, and affordability in financial advice. As more consumers become savvy about financial matters, they are seeking personalized guidance without the commitment of long-term contracts or high AUM fees.

Hourly Financial Planning vs. Traditional Advisory

Unlike traditional models that typically charge a percentage of assets under management, Hourly Financial Planning bases fees on the time an advisor spends working with a client. This approach offers greater transparency and flexibility, allowing clients to pay only for the specific services they need. Traditional models often lock clients into long-term contracts and charge fees regardless of the level of service provided.

Furthermore, hourly financial planning prioritizes personalized advice tailored to individual needs, whereas traditional models may offer more standardized, one-size-fits-all solutions. This personalized approach can be particularly beneficial for clients with complex financial situations or those seeking specific, short-term guidance.

How Hourly Financial Planning can help you to manage yourself your own investment portfolio?

By providing granular control over your spending on financial advice, you can allocate resources precisely where you need them. This approach is particularly beneficial for investors who:

• Possess a basic understanding of investing but seek expert guidance on specific areas like asset allocation, portfolio rebalancing, or risk management.

• Have a significant investment portfolio but prefer to maintain control over their investments while seeking occasional expert input.

• Desire to build financial literacy and learn how to make informed investment decisions through direct interaction with a financial advisor.

Hourly Financial Planning can offer flexibility and cost-effectiveness, allowing you to access expert advice without committing to ongoing fees.

Who Can Provide Hourly Financial Planning?

Hourly Financial Planning is typically offered by fee-only financial advisors. These professionals are compensated solely by their clients for the services provided, without receiving commissions from the sale of financial products. This ensures that the advisor’s primary focus is on the client’s best interests, rather than on maximizing product sales.

Not all fee-only advisors offer hourly rates; some may charge flat fees or a percentage of assets under management. It’s essential to research different advisors and their fee structures to find the best fit for your needs.

Additionally, some independent financial consultants or certified financial planners (CFPs) may offer hourly financial planning services. It’s important to verify their credentials and experience before engaging their services.

By choosing an hourly financial planner, clients can gain access to expert advice without committing to long-term contracts or paying fees based on the size of their portfolio.

Professionals who typically provide Hourly Financial Planning

Fee-only financial advisors:

These professionals are exclusively compensated by their clients for services rendered and do not receive commissions from product sales.

Independent financial consultants:

These individuals offer financial advice without being tied to a specific firm, often providing hourly services.

Certified Financial Planners (CFPs):

While not all CFPs offer hourly rates, many do, especially for specific planning needs or consultations.

It’s crucial to verify the credentials and experience of any financial professional before engaging their services, regardless of their fee structure.

Hourly vs. Asset Under Management Fees:

Hourly financial planning typically charges a set rate for each hour of an advisor’s time. This means you pay directly for the services rendered. For instance, you might pay $300 per hour for financial planning advice. Your total cost will depend on the complexity of your financial situation and the amount of time required.

Asset under management (AUM) fees are calculated as a percentage of your total investment portfolio. Common rates range from 0.5% to 1.5% annually. So, if you have a $1 million investment portfolio and your advisor charges a 1% AUM fee, you’ll pay $10,000 per year. This fee is charged regardless of the amount of time the advisor spends on your account.

Key difference: With hourly fees, you have more control over your costs, paying only for the services you need. AUM fees can be more expensive for smaller portfolios, as you pay a percentage regardless of the complexity of your financial situation.

Who Can Benefit from Hourly Financial Planning?

Hourly financial planning can be advantageous for a wide range of individuals. Here are some examples:

• Those with specific, short-term financial goals:

If you need advice on a specific issue, like retirement planning, estate planning, or debt management, hourly planning can provide targeted guidance without committing to ongoing fees.

• Individuals with smaller investment portfolios:

AUM fees can be relatively high for those with smaller portfolios. Hourly planning offers a more cost-effective option.

• People who prefer a pay-as-you-go model:

If you value flexibility and want to control your financial planning expenses, hourly planning aligns with this preference.

• Those seeking a second opinion:

If you have existing financial plans but want to get a fresh perspective or verify your current strategy, hourly planning can be beneficial.

• Individuals with complex financial situations:

Hourly Planning allows for in-depth discussions and tailored advice for those facing intricate financial challenges.

Ultimately, HFP can be a valuable option for anyone who wants personalized financial guidance without the commitment of traditional fee structures.

Are you tired of feeling overwhelmed by your finances? Hourly financial planning offers a fresh approach to achieving your financial goals. By paying only for the time you need, you can access expert advice without breaking the bank.

Enjoy the freedom to address specific financial challenges, get a second opinion on your current plan, or simply gain clarity on your financial future. With hourly financial planning, you’ll have a personalized roadmap to help you make informed decisions.

Ready to take control of your financial life? Schedule a free consultation with us today. Our experienced financial advisors will provide you with valuable insights and guidance to help you build a brighter financial future.

Don’t let financial stress hold you back. Your journey to financial well-being starts here.

Alonso Rodriguez Segarra – CERTIFIED  FINANCIAL PLANNER™

Which provides hourly, fee-only, and fiduciary financial planning services. He has   over 20 years of experience in the financial world and has been named among the   Top 100 Financial Advisors in the US by Investopedia.

_________________________________________

Note: The comments given in this guide are for educational purposes only. Before    making a financial decision, consult your financial advisor or conduct appropriate      research. Remember that historical results are not a guarantee of future returns. In    the comments provided, this guide does not consider tax impacts. Always consult      your particular case with a specialist. We are not your financial advisor, so             remember that each case differs.

_________________________________________

All rights to this guide are reserved, and the occasional mention of third-party       brand names is made solely for educational and reference purposes, without any       interest in financial gain. This information is for educational purposes only and     does not represent an offer of products or services.