What does financial planning cost, and how do I know if it is worth it?

Why there is no number on this page

A price printed on a page is a price written before anybody looked at your situation. It is either high enough to cover the worst case, which makes it useless to most readers, or low enough to get the call, which makes it something else.

The honest version is that the work is not one size. Two owners with similar revenue can need very different amounts of attention depending on how tangled the position already is, how many entities are involved, and whether anyone has looked at any of it before.

So what follows is the next best thing: what the number actually depends on, and how to ask for it so that what you get back can be compared with what anybody else tells you.

What the figure turns on

How tangled it already is

A clean position with separate accounts and current books is a different job from one where the first months are spent working out what happened.

How many moving parts

One entity or several. One state or more than one. Property, partners, a spouse with their own business — each adds a dimension rather than a line.

What else is in the relationship

Planning informed by books that are already current is a different piece of work from planning reconstructed from documents gathered for a meeting.

How often it is revisited

A plan built once and a plan reviewed as the year moves are different commitments, and they are priced as different commitments.

What you want it to reach

Retirement and structure alone, or protection, education, property and what happens to the business as well.

How to ask so the answer is comparable

1. Say what you actually have

   Entities, employees, states, roughly where the books stand, and what is already in place. A number given against a real description is a number that means something.

2. Ask for the all-in figure

   Including whatever is billed separately. That is precisely where two quotes that look similar stop being similar.

3. Ask where the first conversation ends

   What that conversation covers, and at what point work starts being billed. Ask it in your first sentence, before anyone opens a file. Anyone worth hiring answers that without hedging.

4. Ask how the advice side is paid

   A flat fee, a share of what is managed, a commission on what is sold, or some combination — and whether the answer changes depending on which product you end up holding.

5. Ask for it in writing

   Not because anybody is expected to be evasive, but because a figure you can re-read is a figure you can hold somebody to.

What you are actually paying for

Most of what turns up in a first planning engagement is not exotic. Retirement contributions that were never set up. A structure that suited the business at a different income and was never revisited. Personal and business finances threaded together in ways that make everything downstream harder. No protection against a risk that would genuinely undo years of work. No answer at all to what happens to the business if something happens to you.

None of that is unusual, and none of it is a failure. It is the ordinary condition of somebody who has been running a business rather than building the structure around it. What you are paying for is attention to the part of the picture that is easiest to leave for later, from somebody whose job it is to look at it.

It is the ordinary condition of somebody who has been busy running a business.

How to judge it afterwards

Nobody can honestly tell you in advance what a plan will return, and a page that promises a multiple is selling rather than explaining. What can be said is what a useful engagement looks like a year in.

Decisions changed. You can state your own position without going to look it up. There is an order to what happens next, and you know what the first thing is. Something that was exposed is now covered, or you have decided on purpose that it does not need to be. And the questions you bring are better questions than the ones you started with.

If a year has passed and none of that is true, that is the answer to whether it was worth it, and it is worth saying so out loud rather than renewing quietly.