US NRIs can now find an Hourly-Fee Financial Planner on

Published: January 22, 2022 at 2:30 pm is the new initiative by SEBI Registered Investment Advisor, Avinash Luthria for US-based NRIs to find a financial planner free from conflict of interest. Avinash is the first Indian hourly fee financial planner (explained below). In this article, he explains in detail about the new website.

About the author:  Avinash Luthria is Founder, Hourly-Fee Financial Planner & SEBI Registered Investment Adviser (RIA) at Fiduciaries. He was previously a Private Equity & Venture Capital investor for 12 years and has a flagship-course MBA in Finance from IIM Bangalore. His articles about Financial Planning & Investing have appeared at Business Standard, Mint and The Ken.

  1. What is ? (‘the site’) is a freely available list of Hourly-Fee Financial Planners & Registered Investment Advisers in the US & India and eventually in the UK & Canada also i.e. English-speaking countries amount the top-10 countries in the world. For the sake of brevity, this article may sometimes also use the term RIA which stands for Registered Investment Adviser. The site currently lists 4 RIAs in the US. 

  1. What does Hourly-Fee Financial Planner mean? 

Hourly-Fee Financial Planners disclose both their total fee as well as their hourly fee. Thus, such RIAs are automatically also disclosing the number of hours of effort that they put in for each client (including over calls, emails and back-end effort).

This transparency by itself is a very useful input to the client since it indicates whether (a) the engagement goes into great depth or (b) the engagement reduces the depth so as to cater to clients who need a low total fee or (c) the engagement focuses on only one or two narrow aspects (e.g. should the client buy an apartment now in New York / London / Mumbai?).

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This transparency also allows the client to correctly compare the fees of two RIAs. Comparing only the total fees of two RIAs is usually the same as comparing apples with oranges. Comparing the hourly fees is the right way to make the comparison. Let’s assume there are 4 RIAs as described below. 

Hours of effort with a new client = 3Hours of with a new client = 15
Hourly-Fee = USD 500RIA X Total Fee = USD 1,500RIA Z Total Fee = USD 7,500
Hourly-Fee = USD 350RIA W Total Fee = USD 1,050RIA Y Total Fee = USD 5,250

For two RIAs that put in the same number of hours of effort per client, the RIA with more experience/credentials will usually have a higher hourly fee. Hence, a client with a tight budget and a simple situation might select RIA W (and if that is not possible, then RIA X).

A client with a tight budget but a complex situation might be based on several factors selecting RIA X or Y (transparency in the hourly fees allows the client to make an informed decision between the two RIAs). A client that does not have a budget constraint and has a complex situation might select RIA Z (the transparency in hourly fees allows this client to correctly select RIA Z over RIA X as a better fit for this client). 

Hourly-Fee does not mean that the client can ask for an engagement with just one hour of total effort.

  1. Who should use the site?

The main benefit of the site currently is only in the information about US RIAs. The site could be more or less useful based on several factors including (a) whether a client plans to retire in the US or not (b) whether a client is a US citizen / Green Cardholder or not and (c) whether a client is or was resident in the US or not and (d) whether the person has or intends to have a significant amount of investments in the US or not. 

  1. Who should not use the site?

Anyone who is hoping to beat the stock market index via their equity investments will find the site to be a complete waste of time. 

  1. What are the criteria to list RIAs on the site?

The site lists seven criteria. A few of those criteria require that hourly fees be the only form of revenue that the RIA earns i.e. the RIA does not earn any commission nor percentage of AUM fees nor fees from other higher-paying services nor referral fees.

There are several other criteria e.g. that the RIA does not push clients to renew the engagement. The seven criteria put together sets a very high bar that very few RIAs are able to meet. For example, I have looked through the information of several RIAs in the US that claim to be Hourly-Fee RIAs but they do not meet the criteria listed on the site. 

  1. Why is the list on the site so short?

As mentioned earlier, the seven criteria put together sets a very high bar that very few RIAs are able to meet. Also, from a practical point of view, Hourly-Fee is a very new concept. By the strict definition on the site, the first Hourly-Fee RIA in the US (Allan Roth) started operations around 2003 and the second Hourly-Fee RIA in the US (Rick Ferri) started operating as an Hourly-Fee RIA only in 2019. To clarify, Rick Ferri has significant relevant experience, and he is the host of the ‘Bogleheads on Investing’ podcast by the John C. Bogle Center for Financial Literacy, a non-profit organization.

  1. How do I select between the 4 RIAs that the site currently lists in the US?

This is a very complex topic that is difficult to address briefly. Allan Roth’s model is 8 to 20+ hours of effort (by default, I mean with a new client) at USD 450 per hour and he focuses on High Net Worth (HNI) clients. That range of 8 to 20+ hours of effort spans a very wide range of HNI clients from those having a simple situation to those having a very complex situation.

For a specific client (for example an HNI client with a simple situation), Allan Roth will provide a narrow range of effort in advance of starting the engagement – for example, 8 to 12 hours of effort. And he will charge the client based on the actual effort consumed which is within that narrow range e.g. 10 hours of effort.

Usually, neither the client nor the RIA knows the precise scope before the engagement starts. For example, after the engagement starts, a client may tell the RIA that the client’s spouse has advanced cancer. The client may not have sufficient knowledge of financial planning to disclose in advance all aspects that might influence the scope of the engagement.

Hence the narrow range of effort helps to accommodate such surprises in the scope. This makes sense in the US while in India an Hourly-Fee Financial Planner will typically commit to an exact number of hours of effort in advance (e.g. 15 hours of effort) and typically manage the scope to make it fit within those 15 hours of effort (e.g. by deprioritizing less important aspects).    

Rick Ferri’s model is around 2.2 hours of effort at USD 450 per hour (clients can choose to pay for additional hours of effort). Rick Ferri has a waiting list of around 9 months i.e. you will be able to formally engage with him only 9 months later. Jon Luskin’s model is around 2.5 hours of effort at USD 450 per hour (clients can choose to pay for additional hours of effort). Jon Luskin’s approach to financial planning and investment advice is based on Rick Ferri’s approach and they are business partners. And Cody Garrett’s model is 20 hours of effort at USD 320 per hour. 

  1. Should one refer to the list by Harry Sit which is mentioned on the site?

Harry Sit’s list (which may or may not include one additional person) is behind a paywall and hence you could initially ignore it. Harry Sit is a pioneer in painstakingly compiling a list of 100 either Hourly-Fee or Fixed-Fee RIAs in the US. I have not seen Harry Sit’s list, but I assume that his criteria are less strict than mine. I have not seen Harry Sit’s list because it would be unethical for me to now proactively see his list. 

  1. Do any of the other RIAs mentioned on the site pay you a fee?


  1. Why are there no RIAs listed in the UK / Canada?

I am trying to locate at least one such RIA in each of the UK and Canada, but I have not yet been able to. If any such RIA (or equivalent) exists, I am hoping that they will contact me, and I can list them on the site.

Postscript: The extraordinarily low conflict of interest in Allan Roth’s fee-model inspired me to quit my 12-year career as a Private Equity & Venture Capital investor and become the first Hourly-Fee Financial Planner in India in 2018 (going by the definition on the site).

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