Planning to pay for financial planning
May 13, 2017 8:36 AM   Subscribe

We're about to get an invoice from our financial planner. I suspect it's going to include both things I'm happy to pay for and things I'm not. What should I do?

We met with a new financial planner this year, and paid hourly for the time we spent together. Since then, we've had a follow-up email exchange. Our previous CFP had handled short email exchanges for free in between paid, in-person appointments, so I didn't think much about it. But these emails became so extensive that I began suspecting we'd be invoiced for them. Sure enough, her most recent email ends, "I’ll also send you an invoice shortly for work done on the reverse mortgage scenarios."

Looking back through our initial paperwork, it does clearly state, "Hourly charges are based on time spent with the client as well as on work done outside of sessions..." So no argument there. But I'm worried that we may have racked up more charges than I wanted. In particular, our email exchanges have involved the following work, with my reaction to each in italics:

1. Reading my emails and responding directly to questions I asked.
I'm happy to pay for this.

2. Explaining about those questions and her answers at greater length, and providing links to related sources.
Relevant but not anything I would have wanted to pay for. I would have been happy with concise answers without all the background detail and explanation. I knew of some of the references already. In general, I'd rather learn stuff from already published sources than pay someone to write new explanations just for me. Or, if customized explanation was needed, it probably would have been quicker by phone than typing it all up.

3. Editing our financial model in her software with numbers I provided.
I'm happy to pay for this.

4. Spending time with tech support on at least two separate occasions, finding workarounds in her software (MoneyGuidePro) for accommodating reverse mortgages.
Feel we're already paying her for her expertise, which should cover this.

I think 1. and 3. could realistically have been handled in about an hour (@ $250). If she bills for 2. and/or 4., I'm sure it will be well above that. So, here are the options I've thought of.
A. Pay the invoice when we get it; chalk it up as an expensive lesson learned.
B. Wait for the invoice. If it's for more than about an hour, ask her politely about the above details. (I worry that there may be no way to avoid coming across as bad clients, since this is our first interaction with her.)
C. Before I get the invoice, politely mention the details above as a concern. (Ditto the above concern. Any more or less so than B.? One key thing I'm wondering is whether we might have a better chance of it all being congenial if I'm politely asking about what categories above she'd customarily bill for, before she actually does so.)
D. Something else you recommend?

I'd like to maintain the relationship -- although I'll certainly change how I handle email with her going forward!
posted by Other to Work & Money (9 answers total) 1 user marked this as a favorite
 
B or C. You decide. As a professional she's already heard everything you've said here. There's nothing dangerous or shocking about the words you've written here that will change the relationship to "uncongenial."
posted by JimN2TAW at 8:47 AM on May 13


Pay the invoice as billed and when you next meet with her discuss the extent/type of emails that would be billed/not.billed. it is perfectly appropriate to discuss future billings. It is always OK to discuss current bills but I would stay away from challenging the current bill unless it seems clearly excessive or outside of established guidelines
posted by rmhsinc at 9:09 AM on May 13 [1 favorite]


Part of the concern about paying hourly for stuff is you're never sure how long it takes other people to do things. This is particularly true as communication moves to email from the phone (when you both know how long a phone call took). Depending on your general "We can afford this" level I'd either do A or B. I'd also push back, gently, if she tries to bill you for time spent learning or dealing with software issues which should be things she manages on her own time. And then before you start racking up time spent for the next invoice, just let her know that you don't need the services that she provides in #2 and thanks-but-no-thanks on that for the future. Realistically she knows your money situation so she knows what you can and can't afford. But a good faith "This is how we are budgeting for this" should be something a financial planner understands and respects.
posted by jessamyn at 9:15 AM on May 13 [3 favorites]


I say this at the bottom, but I wanted to emphasize how unintentionally anxiety inducing this type of billing system can be for the client. Interestingly, I found it also produced anxiety for me as a service provider. My recommendation is for you to pay the invoice and change how you interact with her in the future.

When asking questions, I think it is OK to specify that you require a short answer and indicate that you will do follow-up research on your own. I'm unsure if you should have to pay the rates for her software adjustments... Are you the only client she uses this product with?

Her time spent on your services is what it is. If she did not charge hourly, she would have to come up with some other way to get compensated for her efforts on your behalf. So, I mean... If you like her, she worth the high rates.

I can certainly understand how the hourly billing just sorta builds anxiety via how it works in these types of situations. You might be more comfortable with a higher flat rate up front for the service, rather than hourly billing.
posted by jbenben at 9:20 AM on May 13 [1 favorite]


I just wanted to say that it is OK to question what services are billable as they crop up. For example, you mentioned that you suspected you were being billed for lengthier emails. It is totally fine to ask her directly if that was the case. I think it is within her rights to bill you for all of the services you outlined, excluding the computer issues, but it is also within your rights to know in advance that you will have to pay for them.
posted by pintapicasso at 9:54 AM on May 13


I have a financial advisor for which I pay an upfront yearly fee.

Helps me not think about a lot when I e-mail him for run of the mill questions.

In your case, I would be proactive and take option c.

This way she knows you are scrutinizing the bill and will hopefully go out out of her way to explain the charges
posted by The1andonly at 10:13 AM on May 13


If I were you, I think I would do the following:

1. Ask via email something like, "It's been great working with you. Since we're new clients, was hoping to get a sense of the upcoming invoice amount so we can budget for it."

2. If she is charging for 2 and 4 write, "Thanks for this info. I think my ideal will be to keep my budget for [monthly/quarterly] services to about [X-Y] going forward. I'd be grateful if you could help me cap that [monthly/quarterly] budget - does that work for you? For future work, is it possible to limit [#2] services? I'm happy to do that kind of legwork on my own. Thanks again for all the work - it's great to be working together."

I dunno, I'm feeling like you don't have much recourse if you want to retain a good relationship to pay less on 2 and 4 if she is charging for those at this point since the agreement is based on an hourly rate.

I am [very rarely, to avoid this exact scenario] paid a hourly rate for my expertise and I do get questions like "We feel we're already paying you for your expertise, which should cover [X,Y,Z]" and man it does leave a sour taste in my mouth. If the agreement is hourly, you pay hourly and my contract explicitly states for research, troubleshooting, meetings, calls, work, basically even just thinking about you [no not really but almost].

But I love when people are just like, "Hey this is my budget. If there are things I can do myself to limit your work on this, please kick that over to me, I'm happy to get my hands dirty. Otherwise, please cap work to this budget and give me a heads up if we're nearing the cap."
posted by Uncle Glendinning at 10:55 AM on May 13 [3 favorites]


I think that you should wait to see the bill and then contact her about any charges you believe are inappropriate. I think there's a big distinction between hours which are legally billable (probably all of #1-4) and hours which are reasonable to bill for from a customer service sense.

#2 is a perfectly sensible thing to bill for -- she *did* deliver the service and if it wasn't necessary, you could've told her earlier. However, if the hours billed for this are surprisingly high, you can try to push back and explain that you don't actually want these extensive explanations, would prefer just quick references to existing write-ups in the future, and would hope she would forgive the charges (or say cut them in half) since they were incurred as a result of misunderstanding. If she insists on getting paid, I feel you owe her the money.

Billing for #4 feels ridiculous. If she needs technical support to figure out how to use her software (of her own choice) to input something as common as a reverse mortgage, she should learn how to do her job on her own time and not bill you for it. Again, she probably has the legal right to bill you but as a client, I wouldn't expect to pay for on-the-job training for someone who should be a professional. What if her email system was down and she needed IT help to fix it in order to respond to your email -- would she also bill for that too?

Uncle Glendinning wrote a great explanation of this from the view of service provider. As a client, however, I see no reason to care about how long the service provider spent thinking about work in the shower -- I only judge whether the total service provided was worth the total cost. If your service provider is slow (because she needs technical support, writes undesired wordy emails, etc) and bills many hours for something that a more competent professional would deliver quicker, she better have significantly lower hourly rates to justify this. If that's not the case and she's not flexible about removing unreasonable hourly charges, why would you want to retain her for the future?

As to how to bring up the issue -- I say do it directly and politely but without groveling in apologies. For #2, I'd say "You billed X hours for providing extensive answers. There was a miscommunication -- I did not expect these questions to incur so much work and my previous CFP did not bill for this. Going forward, brief pointers to existing resources would be fine and lets cap the total email explanation hours at Y. Will you reduce the hours billed for this misunderstanding at the start of our business relationship?" As a professional, she should be used to these conversations and not take them personally. On the flip side, there is such a thing as "difficult" clients who don't respect the service provider's time and complain about everything -- don't be one of those as that's rude and no competent provider will chose to work with you.
posted by bsdfish at 1:34 AM on May 14


A belated thank you very much to everyone for answering. I decided to wait and see what the invoice says. If I have questions about it then, I'll feel better that I know how to bring them up, and I'll focus on establishing shared expectations for our work going forward. Thanks again!
posted by Other at 6:08 AM on May 19


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