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Prudential Financial Planning Services Review [2024]: Non-Fiduciary and Not Recommended

INVESTING - BROKERAGES & ADVISORS
Prudential Financial Planning Services doesn’t use a fiduciary approach and charges high annual account fees.
Danielle Letenyei
By Danielle Letenyei
Yahia Barakah, CEPF
Edited by Yahia Barakah, CEPF
Updated Dec. 17, 2024
Fact checked
Financial planner helping their client

While Prudential offers legitimate financial planning services, we recommend working with one of its alternatives. This is because the company uses a non-fiduciary approach when providing financial advice or recommendations to you to maximize its gains, even when there’s a conflict with your interests.

Prudential doesn’t disclose all its fees, but among them are high annual account fees that range from $125 to $161. Failure to disclose how their bundled fee programs work resulted in an $18 million settlement with the Securities and Exchange Commission (SEC).

In this Prudential Financial Planning Services review, let's explore how the company works and discuss some of its alternative options.

In this article

Key takeaways

  • We don’t recommend Prudential Financial Planning Services because it isn’t fiduciary, which means it may not always have your best interest in mind.
  • Financial professionals with Prudential Financial Planning Services are incentivized to make money for Prudential and its affiliates, even if this conflicts with your interests.
  • Investment accounts opened with Prudential Financial Planning Services carry many fees, including annual account fees ranging from $50 to $161.
  • The company settled charges with the SEC for $18 million. The charges related to alleged breaches of duty in their wrap fee programs and non-disclosure of conflicts of interest to their clients.
  • Prudential Financial Planning Services is an arm of Pruco Securities, LLC, which is registered as both a brokerage and investment advisor with the SEC.

Prudential Financial Planning Services: Is it worth it?

Pros
  • Offers a free financial assessment
  • Has financial professionals in 27 locations in the U.S.
  • Registered with the SEC
Cons
  • Doesn’t operate as a fiduciary service
  • Charges various fees bundled in a wrap fee
  • Charges an annual account fee of $125 or $161
  • Had previous charges by the SEC

Our verdict

We don’t recommend Prudential Financial Planning Services for people looking for a financial planner who will work in your best interest. Although registered as an investment advisory service with the SEC, its financial professionals prioritize recommending products and services that make money for Prudential and its affiliates over products that offer you better benefits or lower fees.

What is Prudential Financial Planning Services?

Prudential Financial Planning Services is an arm of Pruco Securities, LLC, an investment advisory firm. Pruco is registered with the Securities and Exchange Commission (SEC) as a brokerage and investment advisor.

Prudential Financial Planning Services falls under the umbrella of Prudential Financial, Inc., a Fortune 500 company founded in Newark, New Jersey, in 1875.

Prudential Financial has about $1.4 trillion in assets under management and 50 million customers in over 50 countries. It provides insurance products, mutual funds, annuities, college savings plans, and personalized investment portfolios.

Prudential Financial Planning Services works with financial advisors to provide its non-fiduciary services. While fiduciary services prioritize your best interest, non-fiduciary services might prioritize certain products over others to maximize the compensation the company receives.

Learn more about what financial advisors do.

How does Prudential Financial Planning Services work?

Prudential Financial Planning Services is a part of Pruco Securities, which is registered with the SEC as an investment advisor and a broker-dealer.

Prudential’s advisory programs

Prudential offers four advisory programs that are actively managed by financial planners:

  • PruStrategist Portfolios (PSP): A discretionary program where the financial planner makes investment decisions without your prior consent.
  • PruChoice: A non-discretionary program where your permission is required for any trades.
  • Unified Managed Accounts (PruUMA): Another discretionary program where the financial planner can make trade decisions without asking you first.
  • Managed Income Solutions (MIS): A non-discretionary account that helps you to get advice and administrative help along with a purchase of an annuity.

These programs use a mix of mutual funds, exchange-traded funds (ETFs), and other investment assets. Some of these assets are proprietary or owned by the company, while others aren’t.

Prudential financial planners can guide you with these investment assets. However, since Prudential isn’t a fiduciary service, planners may recommend proprietary or affiliate assets to maximize the return the company receives.

Prudential’s advisory fees

Prudential Financial Planning Services uses wrap fees for three of its four advisory programs. Wrap fees bundle up or wrap up account fees, investment advice fees, trading and custodian costs, and administration expenses into one fee.

As a part of its wrap fees, Prudential charges a $125 or $161 annual account fee, depending on whether you receive electronic or physical statements.

Keep in mind
In 2020, Pruco Securities, along with its advisory division, Prudential Financial Planning Services, agreed to an $18 million settlement with the Securities and Exchange Commission (SEC). The SEC charges were related to alleged breaches of duty towards their advisory clients within their wrap fee programs and failure to disclose conflicts of interest to their clients.

The following three programs charge wrap fees:

  • PruStrategist Portfolios (PSP)
  • PruChoice
  • Unified Managed Accounts (PruUMA)

Wrap fees are typically due every quarter and are based on a percentage of your assets under management. However, Prudential doesn’t disclose the specific percentages of these fees.

The Managed Income Solutions (MIS) program enables you to choose non-wrap fees. Instead, you pay each fee separately, including an annual account fee of $125 to $161, investment advice fees, and additional fees. You may also pay an hourly consulting fee between $50 and $450.

How to get started with Prudential Financial Planning Services

There is no charge for a 30-minute virtual consultation where you will discuss your financial goals, personalized solutions, and the next steps to working with a Prudential advisor.

  1. To get started with Prudential Financial Planning Services, you’ll need to schedule a consultation through the Prudential website.


  1. To have a Prudential Financial Planning Services advisor contact you, fill out your name, email address, phone number, and what you’d like to discuss.


  1. If you prefer to meet with someone in person, you can search for Prudential advisors near you and request an appointment through the Prudential website. The company has financial advisors and planners located in 27 offices located across the U.S.


Alternatives to Prudential Financial Planning Services

Prudential Financial Planning Services has several competitors that offer similar services. J.P. Morgan Personal Advisors and Vanguard Personal Advisors stand out as two of the most popular and established options.

J.P. Morgan Personal Advisors

Unlike Prudential Financial Planning Services, J.P. Morgan Personal Advisors is a fiduciary service that’s legally required to work in your best interest when advising you on investment products and services. This is important because it guarantees that your advisor doesn’t prioritize products that financially benefit them. You need to invest at least $25,000 to work with a dedicated advisor at J.P. Morgan, but the advisory fees are low and range from 0.5% to 0.6%, depending on how much you have invested.

Visit J.P. Morgan Personal Advisors…

…Or learn more in our J.P. Morgan Personal Advisors review.

Vanguard Personal Advisor

Vanguard Personal Advisor is also a fiduciary service that prioritizes your interests. The minimum investment amount is $50,000, which gives you access to a non-dedicated advisor. This means the person you consult may change every time you need assistance. You need to invest at least $500,000 to get a dedicated advisor. Advisory fees range from 0.35% to 0.40%.

Prudential Financial Planning Services FAQ

How much do Prudential advisors charge?

Prudential Financial Planning Services primarily uses a wrap fee structure. This structure bundles various fees, such as annual account fees ranging from $125 to $161, administrative expenses, investment advice fees, and more. These wrap fees, typically a percentage of your account value, are billed quarterly. However, Prudential doesn’t disclose the specific percentages of these fees. Depending on the services utilized, a financial planning fee between $50 and $450 per hour may also apply.

What does a Prudential financial advisor do?

Prudential financial advisors aim to guide your financial and investment decisions to help you achieve your financial goals. They keep you updated on your investments and handle trades on your account, either with your approval (non-discretionary) or without needing your prior consent (discretionary).

However, Prudential advisors are non-fiduciary, so they aren’t legally required to prioritize your interests over their own.

Are Prudential financial advisors fiduciaries?

No, financial advisors working with Prudential Financial Planning Services are not fiduciaries. While the company is registered with the SEC, its advisors are incentivized to earn money for Prudential and its affiliates.

Prudential Financial Planning Services review: bottom line

We don’t recommend Prudential Financial Planning Services since it’s a non-fiduciary service. While fiduciary services work in your best interest when you’re investing money, non-fiduciary services typically prioritize certain products over others to maximize their financial gains.

That’s why one of the main questions for your financial advisor is whether they are fiduciary and how they get paid. Explore more options in our list of the best financial advisors.

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