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Form ADV Part 1A Item 5E(2) · Answer type: yn · Item 5 - Compensation
Item 5E(2) asks whether the firm is compensated by hourly charges.
Hourly billing means clients pay for the adviser's time spent on their projects or questions, typically ranging from $150 to $500 per hour depending on the adviser's experience and geographic market. This structure works well for one-time financial planning, specific consulting projects, or clients who want professional advice without ongoing portfolio management.
Hourly fees provide transparency about what clients pay for each service and allow flexibility for clients who need occasional professional guidance rather than comprehensive wealth management. Clients receive detailed invoices showing time spent on different tasks.
Many fee-only financial planners use hourly billing for comprehensive financial plans, retirement planning analysis, tax strategy consultation, or specialized advice on employee benefits, insurance, or estate planning topics.
This compensation method differs from asset-based fees in Item 5E(1) that tie costs to portfolio values, fixed fees in Item 5E(4) for predetermined project costs, or subscription fees in Item 5E(3) for ongoing publication access.
Yes
The firm uses hourly charges as a compensation method for some or all of its services.
No
The firm does not bill clients on an hourly basis - it uses other fee structures listed in Item 5E.
5E(2) - Hourly charges (Yes / No).
This appears in Item 5E, Compensation Arrangements, which catalogs all compensation methods the firm uses across its service offerings.
Hourly billing indicates a service model focused on specific client needs rather than ongoing asset management. This structure often appeals to clients who want professional financial advice but prefer to manage their own investments or work with separate investment managers.
Hourly fees can provide cost-effective access to financial planning expertise for clients with straightforward situations or specific questions. The pay-as-you-go approach avoids ongoing management fees when clients do not need continuous portfolio oversight.
However, a Yes on 5E(2) does not reveal the actual hourly rates, minimum billing increments, or which services are billed hourly versus other fee structures. Advisory firms may charge different hourly rates for different types of work or adviser experience levels.
The checkbox also does not indicate total project costs, since final bills depend on time required to complete each client's specific needs. Complex financial situations may require significantly more hours than simple planning projects.
Hourly billing does not guarantee lower total costs compared to asset-based fees. For clients needing extensive ongoing advice, annual asset-based fees may cost less than equivalent hourly billing over time.
Yes
The firm uses hourly billing for some services. On Best Investors, look for additional Yes answers in other Item 5E categories to see whether the firm combines hourly billing with other compensation methods for different services or client types.
Review services offered in Item 5G to understand which advisory functions might be billed hourly. Financial planning services often use hourly billing, while portfolio management typically uses asset-based fees.
Check whether the firm also marks asset-based fees in Item 5E(1) or fixed fees in Item 5E(4), suggesting different billing methods for different client needs or service types.
For specific hourly rates and billing practices, consult the firm's Form ADV Part 2 brochure and fee schedules, which provide actual pricing information not available in this checkbox.
No
The firm does not use hourly billing. Check other Item 5E compensation methods to see how the firm charges for services. Common alternatives include asset-based percentage fees for portfolio management or fixed fees for specific planning services.
Some firms prefer predictable fee structures like asset-based or fixed fees to help clients budget for advisory services and avoid uncertainty about time-based billing costs.