No matter how savvy you are with your finances, sometimes it makes sense to consult a professional for help.Most small business owners I know pay for an accountant to help at tax time. Generally, working with an insurance broker can help you save money on your homeowners and car insurance. At a certain point, you may want to pay an attorney to help you with estate planning or getting a will in place.Sure, you could do these things on your own. But the peace of mind, and the advanced knowledge that comes through working with an expert may be worth it in some cases.But what about your basic financial management and financial life planning? Is it ever worthwhile to pay someone else to do that? I argue that in many cases, it’s a great idea.But the model where an investment advisor charges 1% of your investment balances to give you financial planning services seems a little crazy. That structure can seriously erode your ability to build wealth, especially if the investment advisor does little more than manage your investments.Because of that, I am excited to see that more financial planning firms are starting to offer subscription-based models for financial planning. These models allow individuals to pay a flat annual fee for full-service financial planning.One company offering this model is Facet Wealth. If you’re considering finding a financial planner, I think that looking at Facet Wealth could be a great choice.Here’s what you need to know about the company in our Facet Wealth review.
Facet Wealth is a financial planning company. It hires CERTIFIED FINANCIAL PLANNER(TM) professionals (who are required to work in your best interest) to provide financial planning services as well as manage most accounts.Unlike many investment management companies, Facet Wealth doesn’t charge based on the amount of money it manages for you. Instead, it charges on a subscription model.Fees range from $1,200/year ($100/month) – $6,000/year ($500/month)r. Fees are set based on the complexity of financial planning needs. For example, a young person simply trying to pay off credit card debt and save an emergency fund will probably pay $100 per month or $1,200 per year. A couple with substantial assets, children from prior marriages, and an interest in tax-efficient charitable giving will probably pay $5,000. According to Facet Wealth, most clients fall in the middle of that range.When you work with Facet Wealth, you’ll have a dedicated CFP(R) professional who works with you on your financial goals. What exactly does a CFP(R) professional do for you? Generally, a CFP(R) professional will review your current spending and income, help you establish a few short-, medium-, and long-term goals, and create a plan that will help you achieve those goals.As your life changes (and it will), the CFP(R) professional will help you to adjust your plan to reflect your new reality. CFP(R) professionals are also likely to help you determine insurance needs, whether you need to update your will, and will also likely suggest options for making your savings goals more achievable.
If you’re like a lot of people, you balk at the idea of paying $100 or more per month for financial advice. After all, you’re reading a financial blog, so you probably have some level of desire to DIY your finances, and you likely have a good amount of knowledge about the topic.And to a certain extent, I think that is true. If you’re motivated to build wealth and are taking steps to grow your income and invest wisely, you may not need professional help yet.However, in other circumstances, professional help could be well worth the money. If you’re juggling multiple financial goals (such as paying off debt, saving for retirement, growing your side business so you can transition to full-time entrepreneurship, and planning to have a child in the next two years), a professional opinion could be worthwhile.In terms of whether Facet Wealth is priced competitively, I think it is. Most people with less than $250,000 in assets will struggle to find any financial planner to serve them. Those with assets under $1 million generally pay a 1% fee to financial planners.So imagine a couple with $250,000 wanting to get help from a financial planner. That couple would pay 1% of their assets, or $2,500 for financial planning. With Facet Wealth, the person would be more likely to pay $1,200 to $2,000 (depending on their financial planning needs).Some financial planners who are just getting started may offer lower rates, but Facet Wealth seems like a reasonable price given the product.
Interested in subscription-based financial planning, but want to compare a few options first? It may help to know what companies offer a similar model.One similar company is The Financial Gym which is a New York City-based company that offers proprietary financial training. The financial trainers are not CFP(R) professionals, but they have been trained to help people who aren’t well-served by traditional financial planning models. For example, they explain the best student loan repayment options, work to improve spending habits, and give clients income goals to meet.Additionally, many financial planners that are aligned with the XY Planning Network offer subscription-based models. However, not all network members offer that fee structure. Be sure to understand the planner’s pricing model before starting a relationship with them.If you prefer to work with more established brands, Schwab Intelligent Portfolios Premium allows people who use the robo-advisor service to subscribe to a financial planning service. With this option, you don’t have a dedicated financial planner, but you do have unlimited access to Schwab’s team of financial planners.
Generally, I think Facet Wealth has the right business model for financial planning. With low-cost “robo-advisors,” and easy DIY investment solutions, asset management by itself doesn’t offer a huge value. However, I think that great financial planning and personalized financial advice is worth the cost.At the end of the day, you’ll have to evaluate your personal needs. Can you DIY your financial plan, or are the complexities starting to add up? Do you think a professional would provide the knowledge and accountability to take your finances to the next level or are you making enough progress on your own?If you’re looking into financial planning services, I think it’s worth speaking to a representative from Facet Wealth. In the right circumstances, I think the benefits could be tremendous.