Fee-only financial planner: what it is, what it costs and how to choose

The two ways advice gets paid for

1. Through products. This is the most common model in Italy. Your bank's or network's adviser doesn't send you an invoice: they're paid through a share of the fees on the products you buy (funds, insurance policies, managed portfolios). The service looks free, but you pay for it every year inside the product costs, for as long as you hold them.

2. Directly by you. This is the fee-only model: you pay a clear fee agreed up front, and your adviser receives nothing from banks, insurers or fund managers. They have no interest in steering you towards one product over another, or in getting you to buy anything at all.

Who does what in Italy

• Tied financial advisers (consulenti finanziari abilitati all'offerta fuori sede, formerly promotori finanziari): they work for a bank or network and distribute its products. They're usually paid through commissions.
• Independent financial advisers and advisory firms (consulenti finanziari autonomi and società di consulenza finanziaria): they give investment advice without selling products or holding client money. They're paid only by the client.
• Financial planners and financial educators: they work on the big picture, meaning budget, goals, retirement, pensions, protection and savings strategy, without recommending specific financial instruments.

The distinction matters: in Italy, investment advice, meaning personal recommendations on which financial instruments to buy or sell, is a regulated activity reserved to authorised professionals listed in the OCF register (Albo unico dei consulenti finanziari). You can check anyone's registration on the OCF website. Financial and retirement planning, on the other hand, works on the numbers, the goals and the big decisions.

What a fee-only professional costs

There are three common fee models:

• Fixed project fee: for example a complete financial or retirement plan. You know from the start what you'll spend.
• Hourly rate or package: suited to specific questions or a one-off review.
• Percentage of assets: typical of ongoing investment advice. With larger portfolios it can become the most expensive option: always work it out in euros.

Whatever the model, the fee should be written down and agreed before any work starts. For reference, my own services have prices published on the site.

Five questions to ask before choosing

1. How exactly are you paid? Do you receive anything, even indirectly, from the providers of the products we discuss?
2. How much will I spend in total, in euros, in the first year and in later years?
3. What do I actually get? A written plan, a report, review calls?
4. Will I have to move my money? A fee-only professional works with the bank or broker you already have.
5. What kind of work do you do? Planning, education or investment advice, and under which registration?

Clear, straightforward answers to these questions are already a good sign. If you like, we can start with a free 30-minute call to see whether and how I can help.