Subscription-Based Financial Planning: The Future of Personal Finance

Subscription-Based Financial Planning: The Future of Personal Finance

Have you noticed that most of our day-to-day activities and purchases are now subscription-based? From online entertainment streaming services, food delivery/meal kits, fashion services, and online fitness apps. Most people don’t think twice about paying a monthly fee for a service they may want to use.  

So why not subscribe to an affordable financial planning service?

Key Points:

  • Financial planning helps you identify spending habits and behaviors that impact your financial life. 
  • What’s the key difference between traditional financial planning vs. subscription-based financial planning?
  • A monthly subscription fee can be easier to budget than a big one-time fee. 
  • Don’t let “money shame” get in your way to a happier financial future. 
  • You don’t have to be a millionaire in order to use a financial planner.
  • Planning is a process that requires continuous updates.
  • Regardless of your age or financial situation (just getting started or nearing retirement), subscription-based planning can be an effective strategy for everyone.
  • Financial planning doesn’t have to be mysterious or intimidating.

What is traditional financial planning?

Traditional financial planning involves meeting with a financial professional to review all aspects of your current financial circumstances, practices, and goals for the future. For example, planning can include reviewing your: 

  • Current income and expenses
  • Checking and savings account information
  • Asset allocation for your existing investments 
  • Existing retirement plan assets (401k, IRA, etc.) 
  • Tax mitigation strategy
  • Current insurance coverages
  • Consumer debt and repayment schedules

Once this review has been completed, your financial planner will want to discuss your short and longer-term financial goals. This may include saving for retirement, paying off debts, or funding your children’s educations at the right schools.  From there, your financial planner will develop a plan that outlines all of the steps that will need to be taken in order to pursue your specific goals. 

Some financial planners charge a one-time, fixed fee for this type of service. Based on the complexity of your current financial situation, a plan may cost a few hundred dollars to several thousand dollars. Other planners wrap the cost of planning into their investment fee, which is usually based on a percentage of your assets. Other planners, who are paid with commissions (investment, insurance, both).

Once you have the plan, it’s up to you to stick to it on a month-to-month basis. It is also good to meet with your planner at least once a year to update the plan. There is typically an additional fee for these updates. If you’re like most people, your life is very busy, so developing and implementing a financial plan for yourself may be more difficult and time-consuming than you think. 

What is subscription-based financial planning?

The planning process stays the same. However, a subscription-based planning relationship gives you unprecedented access to your financial planner during the year for questions, changes, and updates. So the way you pay (fixed fee, asset-based fee, commission, subscription fee) for planning advice and services impacts your access to the planning firm. 

A subscription-based model also gives you more control and flexibility over the types of services that you receive from your financial planner on a monthly basis. This might include specific sessions on:

  • Building a monthly budget 
  • Reviewing the allocations in your 401(k) plan
  • Planning for your children’s education expenses 
  • Discussing your investment risk tolerances (based on current market conditions)
  • Planning for your upcoming retirement 

With subscription-based financial planning, you can start as simple or complex as your situation dictates. Say you come into an inheritance that might dramatically change your financial situation? Your financial planner can help you work through decisions to have a sound plan for moving forward.  

By paying a fixed monthly fee vs. a one-time fee, you know that your financial advisor will always be there to help guide you through each component of your financial journey, so you don’t feel you have to develop and execute your own plan.  

Monthly subscription fees for financial planning can vary based on complexity and amounts of time, but they typically start as low as $50 per month and can be as high as $500 per month

How does money shaming impact consumers?

Woman feeling ashamedThere can be a misconception that financial planning and advice are only reserved for individuals and families who have accumulated substantial assets.  This is not the case!  

Regardless of your financial situation or holdings, personal financial planning services can be a key component for achieving a successful, happy life. Financial well-being ranks right up there with physical well-being. Financial well-being can create a comfortable lifestyle and financial independence late in life when you need it the most.  

I knew someone who really wanted to work with a financial planner to help her and her family review their financial situation with the goal of paying for the college educations of their three children (ages 7 to 10). At this stage, they had no plan and no savings. What were her family’s options?

When a financial planner reached out to schedule a get-to-know-you interview, they balked and never returned the professional’s calls? Why? Because they were ashamed and embarrassed about their current financial situation. They let “money shame” get in their way of building a solid foundation for their children.

Don’t let your internal voice get in the way of creating the type of financial future that you’ve dreamed about for you and your family. 

Who should use subscription-based financial planning?

As noted earlier in this article, financial planning is available for people of all ages, demographics, cultures, and backgroundsNo massive nest egg is required!  

If you’re younger and just starting on your financial journey, you may need hyper-focused discussions with a financial planner about creating a roadmap to help you accomplish particular goals like saving for your first home, getting married, or having a baby. These types of planning efforts and conversations can help you facilitate your financial journey. 

You don’t need hundreds of thousands of dollars saved up in order to use a subscription-based planning service. And, if you are starting to accumulate substantial money but want to manage your own money, that also works. Your planner is there to help guide you. 

The flexibility of subscription-based financial planning for millennials is here to stay.

If you’re getting closer to retirement age, paying for financial planning services on a monthly basis may be a great alternative for you if you need consistent help navigating through things like savings, budgeting, and tax planning. 

How can you take the myths out of financial planning?

Student standing above the sign Facts and mythsHere are some of the most common myths about financial planning:

Myth #1: I can’t afford financial planning. 

Truth #1: As noted in this article, subscription-based financial planning is a very affordable solution that anyone who wants to improve their financial situation can use. 

Myth #2: I don’t have money to invest.  

Truth #2: Financial planning isn’t just about investing money. It’s about helping you achieve your financial goals and get your financial house in order with budgeting, spending, and savings plans. 

Myth #3: I don’t have time to execute a financial plan.

Truth #3: A financial planner can help guide you through all stages of your financial journey, so you don’t have to feel that you’re going it alone.  

Conclusion: Planning is like going on a road trip. You have one or more destinations in mind. Now you need a map for reaching those destinations. 

Work with Humanity Wealth Advisors, who is on the mission of making the world a better place no matter how much money you have!

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More about the author: Harry Sherdil

As a fiduciary financial advisor at an independent firm, Harry strives to offer the same resources, tools, and research as bigger firms while serving new and existing clients' best interests.