How to Negotiate the Cost of Your Financial Advisor

by Andrea Kornstein

Two women talking in a conference room

Congrats, you’ve found a financial advisor you enjoy working with! The only hiccup is that you are a little dubious of the fees you’re paying. And while you’re hoping to curb unnecessary spending, you also don’t want to sever the relationship. So where does that leave you?

Fortunately, it’s perfectly acceptable to negotiate fees with your financial planner. In fact, according to Simon Brady (CFP®, CDFA®), “The days of the advisor slapping down a seventy-page leather bound plan full of charts and graphs and stocks — picking mumbo-jumbo in front of the client and saying, ‘There you go — now give me a few thousand dollars!’ are long gone.”

Instead, he says that advisors are increasingly “giving their clients a significant amount of control [over] how intense [their] engagement is, what [their] agenda [covers] and how much is spent on it.”

Nevertheless, you don’t want to walk into your negotiation blindly. That’s why we’ve compiled some tips for you to consider:

Making sure the price is right

Know your fees

In order for you to negotiate properly, it’s critical that you understand exactly how you’re being charged. This means you should know the ways financial advisors generally bill clients as well as the specific breakdown of your own fees. Once you have a firm handle on the figures, you can start your discussion and ensure you’re not paying for services you don’t want or need.

Change your scope

Narrowing your area of focus is a guaranteed way to reduce costs associated with a financial advisor. For example, maybe instead of discussing life insurance, mortgages, financial planning, and a new child, you can narrow down the subject matter to financial planning and a new child instead.

Restructure your portfolio

You may be able to lower the cost of a financial advisor indirectly by restructuring your portfolio. Indeed, shifting assets or setting up different accounts can lead to lower fees. Similarly, depending on your needs, switching from a flat fee to an hourly rate (or vice versa) may save you a few bucks as well.  

Consider your account size

When it comes to negotiating with your advisor, the size of your account might offer you some leverage. A client with a high net worth likely has more bargaining power than someone with limited income. After all, if you have $500,000 to invest, your advisor may stand to make a lot while working with you (depending on their fee structure, that is). 

Call some competitors

If you’re concerned about the cost of a financial advisor, consider reaching out to other reputable planners. Ask them about their pricing structure or for an estimate on how much they’d charge. You can then present their quotes to your advisor and address any great discrepancies in fees. 

Inquire about perks

Sometimes financial advisors won’t budge on their fees. But don’t despair! In lieu of lowering their prices, see if they’ll offer other benefits or perks. This could mean anything from giving you access to recommended investment products at a discount to providing assistance with filling out financial aid forms for graduate school.

In the end, you shouldn’t be afraid to negotiate if you’re unhappy with your fees. After all, as Brady concludes, “In today’s competitive landscape, an advisor needs to provide as many touchpoint options as possible if they want to attract business.”

My Financial Counsel can help

Now that you know how to negotiate the cost of a financial advisor, you may be ready to start working with one. Remember that you can always turn to My Financial Counsel for help with your search. We can pair you with a fiduciary advisor who is required to act in your best interest. To get started, take our free, confidential survey here.

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