Can fee-only financial planning actually save me money?
Fee-only financial planning is a totally transparent expense; clients of a fee-only financial planner know exactly how much they are paying for the services being rendered.
Since we do not invest client funds into mutual funds with sales fees, an immediate saving for many clients is the amount they may be (unknowingly) paying in commissions. Whether those fees are up-front, deferred, or annual, they may actually be more costly than the cost of retaining a planner. (And utilizing investments such as exchange-traded funds that have lower annual expenses than many mutual funds also contributes to annual savings.) Studies also demonstrate a diversified portfolio that is rebalanced on a regular basis (a routine practice for most fee-only financial planners) yields a higher annual return.
But the matter of cost savings is secondary to an even more important question: is anyone making certain your assets are working towards your retirement goal? With a fee-only financial planner, the planner’s fiduciary responsibility is to his or her client, not to a brokerage or insurance company.