Are New Financial Planning Services Worth It?

Do you need a financial planner? A sad truth: Most people are not wealthy enough to even speak to a financial advisor, much less afford access to professional money management tools. Today, most money managers only work with you if you've already amassed a lot of money for them to manage (say, about $1 million) because they earn based on percentages. Because of the expense, it often doesn't make sense for us to pay for financial planning. Ultimately, that means as we're saving and earning, most of us are pretty much doing so in the dark.

Enter startup financial planning services—namely Facet Wealth, Stash Wealth, and Personal Capital—with an eye to democratize professional financial planning. While many Certified Financial Planners (CFPs) charge upwards of $5000 for a single comprehensive financial plan, Stash charges a flat fee of only around $1000. Facet Wealth charges a monthly subscription fee (based on individual complexity) for an ongoing relationship and unlimited meetings with your dedicated financial planner. Meanwhile, Personal Capital makes planning software free to use and offers investment advice for clients with as little as $100K to invest.

Sound too good to be true? For the right person, it might be just the thing, but the trick is figuring out if it's for you. "I love that these companies are making financial planning more accessible," says Elizabeth Windisch, CFP, of Aspen Wealth Management in Colorado. "But you want to compare costs—they can be great, but they might be more than you need."

If you're someone who is just starting out in your career, for example, you might not be ready for the kind of service these companies offer. "Early in your career, just trying to fund your 401(k), you may not need to speak to someone as often. There are a lot of financial advisors that will do flat-fee financial planning," Windisch says. "I've helped a lot of people who just need an hour or two of my time."

On the other hand, let's say you're getting more senior in your career. You've got some discretionary income (finally!), but you're trying to figure out how best to use it toward multiple financial goals: paying debt (ugh student loans!), funding your retirement, and saving for your kids' college or simply paying for daycare. On top of that, maybe you have stock options at work or a small business. (If you're a gig worker or side hustler, you have a small business.) In that case, you might benefit from having a financial planner in your corner—and perhaps one of these new companies might be a fit for you.

If you ask Windisch, the main benefit of these new financial planning services is they make finding an expert easier. "It can be overwhelming to find a financial advisor," she says, "but they make it easy." Each of the three companies we've featured works a bit differently, and we break down the basics of each.

financial-planning: pie chart cake — Getty Images

01 of 04

How Facet Wealth Works

Facet Wealth

Facet Wealth's main differentiator is that it connects you with a CFP, who you meet with on a regular schedule or whenever you like. All you have to do is block a time on their calendar. You can also email them at any time.

Your assigned CFP can manage your investments (if you like, for no additional cost) but the main benefit is they help you build a comprehensive financial plan around your goals. That means they help ensure that you're adequately insured (or advise you how much insurance to buy), show you how to start saving for your kids' college while juggling your other goals, and determine how to best manage your cash flow. (Can you really afford a new car?)

Facet's CFPs are fiduciaries, which means they're legally bound to offer advice in your best interest. Unlike other types of financial advisors, they don't make commissions by selling you products.

Cost: $150/month baseline. Instead of an assets-under-management fee—which is when financial advisors charge say, 1 percent of the funds they're managing for you—Facet charges a monthly subscription fee based on the complexity of your financial situation. You can cancel at any time, but the idea is your planner is with you for the long haul. As your life changes, your planner is there to help you navigate new challenges. The fee you pay is worked out during initial conversations with Facet Wealth. You can schedule a free 30-minute intro call via its website.

02 of 04

How Stash Wealth Works

Stash Wealth

Stash Wealth sells itself as offering modern financial advice tailored to millennials' unique situations—you know, hella student loan debt and a desire for daily avocado toast. Rather than a long-haul financial companion, Stash provides a comprehensive financial plan tailored to you by working with you over a couple of weeks.

Stash pairs you with a Registered Investment Advisor (RIA), which is also a fiduciary designation, so the advice you're getting is in your interest. If you'd like, you can then sign up for Stash Management for ongoing updates to your plan and access to your advisor for one-off questions.

Cost: For individuals, costs start at $997, but they also offer plans for couples and entrepreneurs. If you sign up for Stash Management, it charges an assets-under-management fee of 1.2 percent per year. You can take a quick quiz on Stash's website to see if you're a fit for its services, or schedule an introductory call.

03 of 04

How Personal Capital Works

Personal Capital

Personal Capital operates slightly differently from Stash or Facet in that its main gig is the software tools and dashboard, which are free. After signing up for its app, you can link your many accounts and get a full picture of your financial life and investments.

The dashboard offers tools for managing your cash flow, understanding your net worth, and seeing whether you're on track for retirement. From there, you can also sign up for its Investment Service (if you have $100K to invest) or Wealth Management (if you have $200K to invest).

The differentiator for Personal Capital is that it's basically one step up from a robo-advisor. While it does lean on technology, you also get 24/7 support (yes, really, you can email or call 'round the clock) from two human advisors.

Cost: The dashboard is free. Personal Capital charges 0.89 percent per year on accounts with $100K, and the percentage goes down after $200K.

04 of 04

Which One Is Right For You?

Only you can answer this question. Your situation is unique, and many of the benefits of financial planning come from the personal relationship you have with your money and with your planner.

The three companies we've featured here are not the only options on the market. New financial planning startups crop up all the time, and many independent financial planners offer comparable services. One that suits you may be hard to find, depending on your financial situation, so Windisch recommends asking around among friends and loved ones with similar financial situations to yours.

The best advice is to do your homework. "You want to interview [advisors at new startups]. Interview independent advisors. And compare costs," Windisch says. "Try to make everything apples to apples—so look at how much time you get with the advisor and do the math on what the fees will be." Finally, she adds, "Don't pay more for more than you need because that will eat into your wealth."

Was this page helpful?