Do you think that having a professional financial advisor develop a financial plan for you would be cost prohibitive? The Wall Street Journal recently focused on a possible solution: online financial planning. The article mentioned two companies, Veritat Advisors and People’s Financial Advisor, that offer relatively inexpensive plans along with meetings with an advisor either via telephone or video chat.
Whereas traditional financial planners may charge upwards of $150 per hour and $3,500 for a comprehensive plan, according to the article, Veritat charges an upfront fee of $250 plus $40 per month. People’s Financial Advisor charges $99 for a plan and $99 for each telephone consultation.
While I find the online financial planning idea appealing, there are a couple of questions I would raise before becoming a client. First, I’d want to know a lot about the actual advisor I would work with: how many years has he or she been in the business, what credentials do they hold, and can they provide references? Also, I would want to know more about the company’s asset allocation software. Is it as sophisticated as that used by more expensive financial planners or is it more along the lines of what you can get for free online?
What about you? Does the idea of working with an online financial planning company appeal to you? Why or why not?