Financial Guidance for the Rest of Us

For most of us, the only financial guidance we’ve ever received was tied to a salesman. For example, we learn about insurance from the insurance salesman. We learn about investing from our broker “buddy”, and so on. Not exactly what you would call unbiased advice.

Alternatively, the more affluent folks can afford access to an advisor because they have hundreds of thousands (millions even!) in investment accounts. Most advisors charge an annual fee, which usually is in the tens of thousands (or more) per year. With that kind of fee structure, the affluent among us receive comprehensive planning and estate guidance as a bundled service.

So, what if you don’t have a million dollars in a brokerage account? How do you get comprehensive and unbiased financial guidance? Well, that’s where it gets interesting. There are basically three options.

Option one is to find a fee only advisor and pay an hourly rate for advice. That rate could be anywhere between $100-$300 per hour. You can usually get this type of advice on as-needed basis. For example, if you were thinking about retirement and wanted to know your options, you could sit down with an advisor for a few hundred dollars per hour and get some advice. Although some find this service extremely useful, the hourly rate is often a significant barrier to most people. It’s an option though. Not a great option, but an option nonetheless.

Your second option is a more recent development. You can now get access to a financial advisor by paying a monthly subscription. This option is becoming popular because the monthly subscription fee is much more affordable than an advisor’s hourly rate, and because it allows ongoing access to the advisor along every stage of life. The written plan you would get from an hourly rate advisor is usually no longer valid the moment your personal circumstances change. And we all know that life is always changing. Always. So, the subscription model allows for a more buffet style consumption for a reasonable monthly rate throughout your entire financial journey.

For less than your monthly cable bill, you could get educated, unbiased advice with no strings attached.

Lastly, there is a growing movement to offer financial guidance as an employer paid benefit. I realize that there are dozens of financial wellness programs, and education workshops and employee assistance programs that exist already. But, a financial guidance benefit is far superior to anything that exists in the benefits market today. A financial guidance benefit offers the same perks to employees as the subscription model above, but at no cost to the employee!

If your company were to offer this benefit, you would get unlimited personal access to a financial advisor (CFP® Professional) to address all your money related concerns. You would also have regular workshop-style presentations at your job about various financial topics. This type of benefit is hard to find as some companies haven’t realized the direct connection between an employee’s personal finances and the company’s bottom line. But they will. Maybe. One day. Probably not, but we can hope.

So again, your three financial guidance options for getting access to real comprehensive advice without having a ton of money to invest are: fee based with an hourly rate (but why would you?), a financial guidance subscription, or the employee benefit option.