Though Prashant made his de­ci­sion to hire a fi­nan­cial plan­ner, there was an­other as­pect to con­sider: the fee to be paid to the fi­nan­cial plan­ner. Af­ter some re­search, he was sur­prised to find out that there is a wide range of fees that a fi­nan­cial plan­ner could charge.

The fee of a fi­nan­cial plan­ner is based on their cre­den­tials and ex­pe­ri­ence, along with the num­ber or scope of ser­vices they of­fer and the mar­ket that they op­er­ate in.

Neel­gund said that there are fi­nan­cial plan­ners who charge any­where be­tween ₹5,000 and ₹1 lakh per an­num. “While quot­ing a fee, a pro­fes­sional is clear about how much time will he be spend­ing on the client and what is the value of that time and also that they do not want ev­ery client,” he said. Some plan­ners, de­pend­ing on their ex­pe­ri­ence level, main­tain a cer­tain level of fees even if it means lim­ited clients, said Mud­holkar. The ser­vices could range from only sug­gest­ing in­vest­ments for tax sav­ing to reg­u­lar mon­i­tor­ing along with pe­ri­odic re­ports on how those in­vest­ments are per­form­ing. A de­tailed fi­nan­cial plan will also talk about your as­sets, li­a­bil­i­ties and re­struc­tur­ing re­quired from time to time not just vis-a-vis your in­vest­ments but also re­struc­tur­ing of your loans.

Un­der the fee-only model, some plan­ners charge a flat fee, while oth­ers charge a per­cent­age of the as­sets un­der ad­vice, which is your in­vest­ment cor­pus. Here you must un­der­stand that if some­one agrees to pay 1% of their as­sets un­der ad­vice as a fee, this would look very com­fort­able at the start of their in­vest­ment jour­ney when the cor­pus is small. “But as their in­vest­ment cor­pus grows big­ger over the years, the 1% of the cor­pus will look big­ger. So suit­abil­ity of a plan­ner also de­pends on an in­di­vid­ual’s com­fort level with the plan­ner,” Neel­gund said.

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