A second opinion on a financial plan is a review, by someone with nothing to gain from the answer, of the advice you already have: the assumptions behind it, what it costs in dollars, the tax decisions and anything it leaves out. Hourly fee-only planners charge a median $300 an hour, so a review quoted at four hours costs about $1,200 at that median. A full one-time plan has a median of $2,000. The most useful time to get one is before a decision that’s hard to undo.
When it’s worth getting
- Before a decision you can’t reverse: retiring, a pension or survivor election, buying or exchanging an annuity, selling a business, a large Roth conversion. Our guides to military retirement and keeping an annuity cover two of these.
- When you’re asked to move money or replace a product you already own.
- When the plan looks too good: a very high success rate, or returns that seem generous.
- After a big change your plan hasn’t caught up with, such as a divorce, an inheritance or a new job.
- When you’ve never seen the cost in dollars for a year.
If you suspect something is wrong with where your money is held, that’s a different problem. Our guide to warning signs covers what to check today.
What to bring
A reviewer can only check what they can see. Bring:
- The full plan, including the assumptions pages, not just the summary.
- Recent statements for every account, ideally straight from the custodian, plus workplace plans.
- Your advisor’s disclosure documents. A registered investment adviser must give you its brochure, Form ADV Part 2A, before or when you sign, and offer an update each year when something material changes. Bring that and the firm’s Form CRS, which summarizes fees and conflicts.
- Two years of tax returns.
- Insurance policies and any annuity contracts.
- Estate documents and beneficiary designations, and any investment policy statement.
What the review should check
The assumptions
Every projection rests on a few numbers: investment returns, inflation, what you’ll spend, how long you’ll live and when you’ll claim Social Security. Small changes in any of them move the result a lot. FINRA requires brokers’ planning tools to disclose their “limitations and key assumptions,” and any advisor should be able to show you theirs. A good reviewer reruns the plan with lower returns and higher spending to see how much room you have. If the plan reports a probability of success, our entry on Monte Carlo analysis explains what that number does and doesn’t mean.
The cost in dollars
Add every layer: the advisory fee, the funds’ expense ratios, any commissions or wrap fee, and insurance or annuity charges. Then compare with what fee-only firms publish:
US medians from prices firms publish on their own websites
Source: Wellspent fee report
If your total is well above these, the review should say what you get for the difference. Our guide on whether 1% is too much has the dollar comparison.
The tax plan
Is each account doing the right job? A reviewer should look at which investments sit in taxable, tax-deferred and Roth accounts (asset location), whether Roth conversions fit your brackets, the order you’ll draw from accounts in retirement, and whether your tax return shows missed deductions or avoidable gains.
The gaps
Plans often skip what the advisor isn’t paid for. Check disability and life insurance, liability coverage, long-term care, emergency cash, a current will and powers of attorney, and beneficiaries that match your wishes.
Whether the portfolio matches the plan
A plan that assumes a balanced portfolio’s returns but holds mostly cash, or one stock, isn’t the plan you’re living. The reviewer should compare what you own with what the plan assumes.
Common mistakes
- Asking someone who profits from a different answer. A reviewer who wants to manage your money or sell a product has a reason to find fault. Settle the fee first, in writing.
- Bringing only the summary. The assumptions are where most problems hide.
- Judging the plan on last year’s returns. A good plan can have a bad year.
- Treating a different answer as a better one. Ask the reviewer to show, in dollars, what their change is worth.
- Moving accounts in a hurry. If you decide to leave, choose the new advisor first and don’t cash out; our guide to switching advisors covers the transfer.
Questions to ask the reviewer
| Ask | A good answer includes |
|---|---|
| Would you manage my money if I moved it to you? | A clear no for this engagement, or a fee that’s the same either way |
| What’s your fee for this, and how many hours? | A written price or a cap on hours |
| What would you change, and what is each change worth? | A short list, with dollar effects |
| Which assumptions would you use instead, and why? | Specific numbers and a reason for each |
| What in my current plan is fine as it is? | A real answer; a good reviewer tells you what to keep |
For a first meeting with any advisor, our list of questions to ask a financial advisor goes further, and how to check an advisor’s record takes about 15 minutes.
When a fee-only advisor is worth it, and what it costs
The review pays for itself when it changes one large decision or finds a cost you’ve been paying every year. If your plan is simple and your fee is already in line with the figures above, you may not need one.
Fee-only planners who publish prices charge:
- Hourly: a median of $300 an hour, middle half $250 to $350; in Canada, C$250. Most reviews fit here. See hourly planner costs.
- One-time plan: a median of $2,000, if the review shows you need a new plan. See one-time plan costs.
Advice-only planners, who never manage money, are a natural fit; see advice-only financial planning. A CFP professional giving you financial advice must act as a fiduciary under the CFP Board’s standards, whatever the engagement.
How to find one
In the public graph, start with flat-fee advisors and the flat-fee planning specialty, whose prices don’t change with what you decide. For a retirement plan, see the retirement planning specialists and advisors for pre-retirees and retirees. If the plan needs a second look because your life changed, see advisors for mid-life transitions. Our guide to whether financial advice is worth it has a yearly check you can run on any ongoing advice.