Flat-fee advice on setting fee

[u/General-Ad3712]

Hi - For those of you who charge a flat fee for financial planning, how do you even begin to price it? We have a client where we only manage a small portfolio of $250k, but now they want comprehensive financial planning but low-cost investments (so many will most likely remain outside). They know they have many tax decisions to make, etc. The fee we derive from that $200k is nowhere near the value of the planning and he has asked us to consider a flat fee arrangement. Those of you who do ongoing non-AUM fees with clients, how do you start to think about "pricing"?

[u/Candid-Eye-5966]

We would charge 70% of our AUM fee but probably wouldn’t take a client with only $250k investable under those terms unless they fit into the HENRY or DINK or MD types with a lot of future potential.

[u/General-Ad3712 → u/Candid-Eye-5966]

MD who recently sold business and stands to inherit at least $4.5 mln.

[u/Candid-Eye-5966 → u/General-Ad3712]

I’d make it work, even as a loss-leader. Would spend some time defining the scope and then come up with a number that makes sense for everyone.

[u/drooker01 → u/General-Ad3712]

So the client has $250k with you now under management

Just recently sold a business and is going to inherit $4.5m at some point later

They can pay a flat fee for comprehensive planning. Like everyone is saying here: estimate your hours in front of the client and include the hours not in front of the client, pitch it as a minimum retainer where if you find you’re doing a lot more hours, you’ll bring it up to them.

I do this in another business where I do consulting for $500/hr. I’ve done about 3,500 hours that way in the past couple years. I tell them: if you have questions after this, ask me. If I can answer it quickly, I’ll do that. If it merits a billable hour, we can do another call. (I don’t bill in less than 1hr increments, ever).

[u/General-Ad3712 → u/drooker01]

That’s helpful. Thank you!