I need help putting together a financial plan. I spoke with a CFP who charges on a per-project basis. Her fee would be between $3500-$4500 (depending on how simple or complicated it is) to put together a detailed financial plan which would take into account my long-term savings and investment goals. Is this fee reasonable?
There are 2 ways that CFPs might be compensated. On a fee basis, or on a commission basis. If the CFP is not trying to sell you specific investments, $3,500 to $4,500 is probably very reasonable for a fee-only comprehensive plan (Goals, investments, insurance, retirement, and estate planning).
If however you are going to be encouraged to buy particular mutual funds or insurance products, then the planner is probably being compensated by commission. In that case, charging $3,500+ is probably double dipping. The complexity of your financial situation factors into whether the fee on the whole is reasonable. Think in terms of the CFP having professional fees equivalent to those of a CPA or attorney. If professional fees in your part of the country average $200 hourly and the bill ultimately is $4,000, then that translates to about 20 hours of professional services work on the part of the planner.