How Much Does a Financial Planner Cost in Canada?
The cost of working with a financial planner in Canada can range from a few hundred dollars for a specific question to several thousand dollars for a comprehensive financial plan. Some advisors charge an hourly or fixed fee, while others are compensated through investment management fees or commissions.
There is no standard fee for financial planning in Canada. How much you pay depends partly on how the planner is compensated, but just as importantly on what they are actually doing for you.
How financial planners charge in Canada
There are several common ways Canadians pay for financial advice.
| Model | How the advisor is paid | May be appropriate for |
| Hourly | Based on time spent | Specific questions or limited advice |
| Fixed fee | Set fee for an agreed service | Financial or retirement planning |
| Assets under management (AUM) |
Percentage of investments managed | Clients who want investment management and advice |
| Commissions | Compensation related to financial products | Clients seeking products as well as advice |
None of these approaches is automatically better than another. Someone who wants an advisor to select, monitor and manage their investments may prefer an investment advisor or portfolio manager who charges based on assets under management. Someone who manages their own investments may prefer to pay separately for financial planning.
Other people prefer having financial planning and investment management provided by the same firm. The important thing is understanding what you are paying, what you are receiving, and whether the arrangement fits what you need.
What does a fee-only financial planner cost?
The terms fee-only and advice-only financial planning(opens in new tab) are often used to describe planners who are compensated directly by their clients rather than through the sale or management of investments.
Fees vary considerably. A relatively straightforward consultation about a specific financial question may cost a few hundred dollars. A retirement plan or comprehensive financial plan may cost several thousand dollars, particularly when there are multiple accounts, corporations, pensions, tax considerations, or estate planning issues. Ongoing financial planning may involve an annual fee.
When comparing planners, a consumer should not focus exclusively on the price. Two planners may charge similar fees while providing very different services.
What are you actually paying a financial planner for?
Consider a couple approaching retirement. At first, their concern may be if they can afford to retire. Determining this properly may involve much more than preparing a retirement projection.
A planner may need to consider:
There may be several reasonable strategies. The planner's job is not simply to produce a report. It is to compare those strategies and help the clients understand the trade-offs.
That is why the complexity of a client's situation can have such a significant impact on the cost of financial planning. Especially if you want a tax-efficient retirement plan. Retirement tax planning(opens in new tab) is more of an art than a science.
Many people first consider working with a planner in the years leading up to retirement. Our retirement planning page(opens in new tab) explains some of the decisions that can be addressed as part of that process.
Is a more expensive financial planner better?
Not necessarily. A higher fee does not guarantee better advice, just as a lower fee does not necessarily mean the advice is less comprehensive.
Comparing fees without comparing the work being performed can be misleading. One retirement planning engagement may consist primarily of a retirement projection and a meeting to discuss the results. Another may involve detailed tax projections, CPP and OAS analysis, withdrawal sequencing, pension decisions, estate considerations, and several retirement scenarios.
Both may be described as "retirement planning," but they are not necessarily the same service. Before hiring a planner, ask what is included and what the planning process actually involves.
Is paying 1% for financial advice expensive?
A percentage-based investment management fee is common in Canada.
At a 1% annual fee, the dollar cost would be:
| Investment portfolio | Annual fee at 1% |
| $250,000 | $2,500 |
| $500,000 | $5,000 |
| $1 million | $10,000 |
| $2 million | $20,000 |
But the percentage alone does not tell you whether the fee is reasonable. An investment advisor or portfolio manager may provide investment selection, portfolio construction, monitoring, trading, reporting and financial advice. Other services may also be included, including retirement planning.
Someone who wants those services may find an asset-based arrangement appropriate. A DIY investor who does not need investment management may prefer to pay separately for financial planning.
The key is to compare services as well as fees.
Can financial planning and investment management be separate?
Yes. Financial planning and investment management are related, but they are different services.
Many Canadians work with an investment advisor or portfolio manager and also engage a separate financial planner. The investment professional manages the portfolio, while the planner focuses on retirement, tax, cash flow, estate, and other financial planning decisions.
This can be particularly useful when a client already has an investment professional they trust and does not want to move their investments.
Other clients manage their own investments. A financial planner can still help a DIY investor consider their risk tolerance, asset allocation and whether their investment strategy is consistent with their financial plan, without recommending individual securities.
There is no requirement that financial planning and investment management come from the same provider.
Do I need a comprehensive financial plan?
Someone with one or two relatively specific questions may be better suited to a financial consultation. For example, they may want a second opinion about a retirement decision, pension option, CPP timing or another financial issue without going through a full planning process.
Someone approaching retirement with multiple investment accounts, a pension, a corporation, rental properties and significant tax considerations may need considerably more analysis. This is another reason advertised fees can be difficult to compare. You first need to determine how much planning you actually need.
At Objective Financial Partners, our Pay-As-You-Go Consultations(opens in new tab) are intended for more focused questions, while our broader planning services are designed for clients who need more comprehensive analysis.
How much does Objective Financial Partners charge?
Objective Financial Partners is a fee-only, advice-only financial planning firm. Our clients pay us directly for financial advice, and we do not manage investments or receive investment commissions.
Our fees(opens in new tab) depend on the type and complexity of the work. A focused financial question costs less than a comprehensive retirement or financial planning engagement. More complicated situations involving corporations, cross-border issues, pensions, multiple properties, or significant tax planning generally require more analysis and cost more.
We do not try to be the least expensive financial planning option. Our fees reflect the time and analysis involved in the work we agree to perform. Before starting, we explain the work involved, the planning process, and the fee so clients can decide whether the engagement is a good fit.
Many of our clients already have an investment advisor or portfolio manager they are happy with and continue that relationship while working with us. Other clients manage their own investments.
If a client wants professional investment management and does not already have an advisor, we can also introduce them to portfolio managers we know well. We do not receive commissions, referral fees, or any other compensation from those managers.
How should you compare financial planners?
Start by deciding what you actually need. If you have one relatively straightforward question, you may not need a comprehensive financial plan. If you are five years from retirement with several investment accounts, a pension, a corporation, rental properties, and significant tax considerations, a short consultation may not be enough.
When comparing planners, consider asking:
The lowest fee is not necessarily the best value. Neither is the highest. The objective should be to find a planner whose expertise, process and level of analysis match the decisions you need to make. You can learn more about our team here(opens in new tab).
Frequently Asked Questions
This article is intended for educational purposes only and does not constitute personalized advice. The strategies and information discussed may not be suitable for your individual situation or may not be up-to-date and current. Please seek guidance from a licensed professional for advice specific to your circumstances.
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