A Transparent Summary
Of What Financial Planning Costs
5 Ways Financial Planners May Be Remunerated
Before you engage with a financial planner, it is natural to want to know what the cost of financial planning is. The short answer is that it will depend on the complexity of the advice you are seeking, but to start there are usually 5 ways a financial planner can be paid:
- Cost of initial meeting
- Cost of financial plan
- Cost of implementing your financial plan
- Commissions
- Cost of ongoing Financial Planning
This page is dedicated to breaking down the cost of financial advice, and what you can expect from Yield Financial Planning.
The Cost Of
An Initial Meeting
Generally financial planners will not charge you for an initial meeting, but some do. Costs we’ve seen, range between $95 – $330. At Yield, we start with a conversation on the phone, to understand the advice you are seeking and to confirm that we can help you.
Once we understand that we can assist you, we typically have two further meetings. The first is dedicated to us building a strong understanding of who you are and what you are trying to achieve, and the second helps us expand on this, and also show you how we can help.
Yield Financial Planning does not charge for initial consultation, as we see the time spent as an investment in understanding how we can help, as well as to give you an opportunity to understand who we are and feel confident we are a good fit for you.
When a subsquent meeting is required, we charge $495, and this is deducted from the plan costs if you proceed with a financial plan.
Cost of a Financial Plan
The cost of a financial plan will vary, depending on the complexity of your financial situation and the scope of the advice you are seeking. At Yield, we have a calculator we’ve curated, which itemises the specific advice that is relevant to you. This means that the quote we give you is entirely personalised, but also consistent from client to client.
As a guide for what a financial plan could cost you, we’ve provided some typical financial plan costs:
- Scoped insurance advice: $0 – $3,000
- Scoped investment advice: $2,500 – $4,500
- Typical financial or retirement plan: $3,500 – $6,000
- Complex financial or retirement plan: $6,000 – $10,000
At first glance, the cost of financial planning may seem prohibitive, but the reality is that financial planning is likely to be one of the best investments you ever make. To understand the value that sits behind the cost, it is important to engage with your preferred financial planner, to hear how they identify they can help you.
Case Study
We prepared a pre-retirement plan for existing clients, who wanted to understand their options for retirement. With our advice, we showed them how they could retire 5 years sooner than they planned too.
Can You Claim
Financial Advisor Fees on Tax?
Under the ATO’s tax determination (TD 2024/7), there are situations where financial advice fees can be tax-deductible that relate to tax management advice. Here are the circumstances where you typically can claim financial advisor fees on tax:
1.Ongoing Investment Advice:
Ongoing fees for financial advice related to managing existing income-producing investments are normally deductible under the general deduction provisions. This includes:
- Advice on the performance or suitability of your current portfolio.
- Recommendations to adjust investments you already own to ensure they remain income-producing.
By meeting these criteria, you can ensure that ongoing investment advice fees qualify as a valid deduction.
2. Tax Management Advice:
Advice from a recognised tax advisor, like a registered financial advisor or tax agent, may be deductible if it helps you manage your tax affairs. This includes initial and ongoing advice to the extent it relates to managing a taxpayers tax affairs. Examples include:
- Salary sacrifice arrangements.
- Understanding tax implications of super contributions or income protection.
With these changes and a clear understanding of the different deductibility, you can make the most of your tax savings while benefiting from the financial advice you need. It’s also important to seek expert advice to find out if your financial advice fees might be tax-deductible.
Cost of Implementing
Your Financial Plan
The cost of implementing your financial plan is a way that some financial planners charge for the execution of advice. Be sure to ask up front what their policy is on this. They may use it as a way to spread the cost, so that you are only paying for implementation if you do move forward with the advice provided.
Implementation fees may be charged as a flat dollar amount or sometimes as a percentage of the funds you invest. Be careful of percentage-based fees for implementation, as it can quickly add up to be a sizable and potentially unexpected amount, that is usually deducted from your initial investment.
At Yield, implementation is free for our clients who engage us for one of our ongoing services. Implementation support is otherwise available on a fee for service basis. The reason we do not include implementation as part of our plan cost is that some clients are only seeking our advice.
Investment commission Explained
Investment commissions were abolished on 1st July 2013, as part of the Future of Financial Advice reforms, known as FOFA. The ban was prospective and meant that from that point forward, no investment product provider could pay financial planners investment commission for newly recommended investment products. There was a grandfathering provision, that allowed pre-existing ongoing commissions to be paid to financial advisers, but this was later abolished also, on recommendation from The Financial Services Royal Commission and came into effect on 1st January 2021.
At Yield Financial Planning, we have provided genuine fee for service investment advice from our earliest roots in 2006. If we received an investment commission from an investment we recommended, we rebated it directly to our clients, to demonstrate that commission was not the basis for our advice. This made us one of the first financial planning firms in the country to operate this way, and we did it because it was transparent, and because we could see how investment commission could otherwise result in inappropriate advice.
Insurance Commission Explained
Insurance commissions were changed, but not abolished, with effect from 1st January 2018. The result was a virtual halving of upfront commissions to 60% of the premium amount and a flat 20% ongoing for the life of the policy. Importantly, life insurance commission does not affect the price of the premium paid. The cost of the insurance policy is the same whether it is obtained through a financial advisor or directly with the insurer for the same cover.
As a result of the changes with commissions, the cost of financial planning advice in Australia has been going up. But on balance it is a far more transparent charging method and has led to positive change in the quality of financial advice in Australia.
Cost of Ongoing
Financial Planning Advice
To help manage change over time, financial planners offer ongoing financial planning services. How financial planners charge for this can vary between, flat fee for service annually, a percentage of funds invested, or a combination of both. The cost will vary greatly from as little as a few hundred dollars, right up into the tens of thousands of dollars. It really does depend on the complexity and what the service entails, so spend time up front understanding this, before committing to your financial plan.
At Yield we generally split our fee into a flat annual fee for financial planning and bill a percentage of the funds we help our clients invest. We do this, because some of our clients only use us for financial planning and others only investment advice. Furthermore, we find it is a simple and fair way of managing the differences between some of our clients with far higher balances of investments and those with less.
To help you understand the distinction between ongoing financial planning advice and investment advice:
- Ongoing financial planning can be summarised as assisting you in managing the inevitable changes that will occur in your personal situation, investment markets and legislation, whilst relating them back to how you manage your entire financial position ongoing.
- Ongoing investment advice includes advice to choose, monitor and change your investment mix, mindful of how you might need to utilise your investments in the short, medium and long term, with an emphasis also on maximising return and managing risk as much as possible.
Yield's Approach to
ongoing financial planning advice
At Yield, the cost of our ongoing review service is discounted, when you use both financial planning and investment advice. It is a simple and transparent charging structure that works like this:
Investment Only (personally owned)
- 0.70% of funds invested with Yield
Investment only SMSF (SMSF or other investment structure)
- 1.0% of funds invested with Yield
Financial Planning
$4,000 p.a. + (Depends on investment structure and frequency of review meetings)
Example of blended Financial Planning and Investment service discounts
- Financial Planning $2,741 (for couple) + 0.50% of funds invested = ~40% discount off standalone
Note that the financial planning service charge will be determined by the number of investment structures, and frequency of meetings. All fees are quoted ex GST.
The Value of Ongoing Financial Planning Advice
Regularly reviewing your financial position is essential to making the most of the opportunities that change presents and managing the inevitable risks it throws up too. A financial planners ongoing advice is designed to ensure you effectively monitor and evolve your financial plan, to keep you on track to achieve your objectives. A financial planners ongoing advice should be fluid, and able to evolve as your circumstances and need for proactive service and advice grows.
Why you should contact Yield today to help you
To help you weigh up the cost of financial advice against the value you will get from engaging with us, the Yield team have identified 4 key benefits we offer:
- Financial – As a result of our advice, we can demonstrate desirable tangible financial benefits.
- Practical – If we are doing it for you, that alleviates the stress that comes along with managing your finances independently.
- Emotional – Providing you with the peace of mind that you remain in good hands.
- Academic – It’s what we do, it’s what we’ve studied for and worked towards, allowing us to keep up to date with it all, ridding you of that extra responsibility.
To learn more about how Yield can help you craft a highly personalised financial plan, that will give you clarity and direction as well as tangible advice on how to improve your financial position, contact us now.
What Our Clients Say
We have entrusted our wealth creation and future security with Yield Financial Planning for a number of years now. They truly are professionals who have stayed ahead of the game by making strategic decisions at the right time and have always given sound advice. Security for our future is in great hands. Thanks Yield Financial Planning!!!
Yield Financial Planning has provided us with professional expert sound advice. It is always a pleasure to deal James and his team who always have our best interests at heart and has set up a sound plan for retirement. James and his team have provided first rate advice and funds management. I have confidence in James’s competence and integrity.
Yield Financial Planning have been excellent in their advice and investment strategies being a pleasure to work with over many years. Their strategies and constant portfolio reviews making changes when needed have guided us right through from our working days, the GFC and now retirement. We hold Yield as being an invaluable necessity.
Just the excellent service we receive and doesn’t matter how many questions we have; the staff are happy to oblige. They follow things through and let us think about important and critical matters methodically with a helping hand along the way. So overall the Journey is pleasant, professional and comprehensive yet it is explained to you what could help you or your needs.
I’ve been with Yield for more than 10 years and I’ve found the advice invaluable in helping to navigate life’s twists and turns. Highly recommended 5 Stars!
I would like to congratulate Yield Financial Planning, for their high quality of care, expertise and knowledge they have provided in ensuring my future growth is heading in the right direction. These qualities have reflected both in results and the ongoing follow up as an existing client, which I find reassuring.
Have been with Yield for a few years as my financial planners, and was very pleased when they announced their Mortgage Brokering Services – their Broker had great communication, and at no time was I unsure of where we were in the process. Being my Financial Planner, I was much more comfortable knowing they had my interests at the forefront of all negotiations – rather than getting a mortgage broker off the street who is probably aligned with a bank. From a more financial perspective, Yield saved us over $5000 per year through reduced interest payments alone – I highly recommend looking into Yield Financial
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What Our Clients Say
We have entrusted our wealth creation and future security with Yield FP for a number of years now. They truly are professionals who have stayed ahead of the game by making strategic decisions at the right time and have always given sound advice. Security for our future is in great hands. Thanks YFP!!!
