Financial Advisor Cost

As a high-net-worth or ultra-high-net-worth individual, structuring your finances requires careful planning across multiple areas. Owning businesses, managing real estate, and pursuing philanthropic interests demand a coordinated financial strategy. In these cases, working with a financial advisor can provide essential support.

Understanding the financial advisor cost is crucial before selecting the right professional. Different advisors follow various fee structures, and knowing these differences can help you make an informed decision that aligns with your financial goals and personal needs.

Financial advisor fees can vary depending on the services offered, the advisor’s experience, and the complexity of your financial situation. Fee structures may include fixed fees, hourly rates, a percentage of assets under management (AUM), or a combination of these models.

The topic of financial advisor cost often sparks considerable debate. Fee structures can influence how individuals perceive the quality, transparency, and breadth of services offered by a financial advisor. Some may associate higher fees with more comprehensive services, while others may worry that lower costs could reflect less personalized advice. Additionally, hidden fees can erode trust and transparency in the client-advisor relationship.

Understanding financial advisor cost is crucial when evaluating potential advisors. Fee models can vary widely, including flat fees, hourly charges, or fees based on a percentage of assets under management (AUM). Each structure carries implications for the type of service you receive and how aligned the advisor’s interests are with your financial goals.

In the sections ahead, we will explore why financial advisor cost structures matter, what to expect from a flat-fee financial advisor, typical financial advisor fee ranges, and how choosing the right financial advisor model can better support the needs of high-net-worth and ultra-high-net-worth individuals.

A deeper understanding of financial advisor costs can empower you to make informed decisions that align with your long-term wealth management and financial planning objectives.

How Much Does a Financial Advisor Cost?

 The cost of working with a financial advisor depends on both the services offered and the fee structure they apply.

Many financial advisors base their fees on a percentage of the assets under management (AUM), meaning the more assets they manage for you, the higher the fee in dollar terms. Others may use different models, such as charging an hourly rate, a per-plan fee for creating a financial plan, or a flat monthly or annual fee. Each structure can impact how services are delivered and how costs align with your financial needs and goals.

Financial Advisor Fees by Type of Advisor or Service

Financial Advisor Fees by Type of Advisor or Service

  1. Robo-Advisors
  2. Online Financial Planning Services
  3. AUM Fee
  4. Retainer for Services
  5. Hourly Rate
  6. Flat Fee per Plan
  7. Commission-Based Compensation

1. Robo-Advisors
Robo-advisors use algorithms to recommend investments based on your financial goals and risk tolerance. Their fees are typically based on assets under management (AUM), usually ranging from 0.25% to 0.50%, making them lower-cost compared to human advisors. Some robo-advisors, such as SoFi Automated Investing, offer services with no management fee. However, robo-advisors generally do not provide customized or personalized financial planning beyond investment recommendations.

2. Online Financial Planning Services
These services operate entirely online and may be extensions of robo-advisors (e.g., Betterment) or platforms that provide access to human advisors. They offer assistance with common financial needs such as investment and retirement planning. Fees typically involve an AUM percentage between 0.30% and 0.89% or a flat annual fee starting around $1,000, depending on the level of service required. Most provide a dedicated advisor to work with the client remotely.

3. AUM Fee
An AUM fee is based on a percentage of the assets managed by the advisor, often around 1%. The percentage may decline for higher asset levels. Many advisors set minimum account requirements to offer AUM-based services. Some advisors focus solely on investment management without offering broader financial planning.

4. Retainer for Services
Clients may pay a flat retainer fee, typically ranging from $2,000 to $7,500 per year, sometimes linked to the size of investable assets. This model usually includes both financial planning and investment management.

5. Hourly Rate
Advisors may charge by the hour, with typical rates ranging from $200 to $400. Hourly sessions cover areas like budgeting, saving, debt management, investment recommendations, and retirement planning.

6. Flat Fee per Plan
Some advisors offer one-time flat fees for creating financial, tax, or estate plans. These services usually include recommendations for plan implementation. Additional work or ongoing management may require separate hourly or AUM-based fees.

7. Commission-Based Compensation
Commission-based advisors earn fees from the sale of financial products. While this model can lower upfront costs for clients, it may create potential conflicts of interest, as the advisor’s recommendations might prioritize products that generate commissions rather than those best suited for the client’s needs.

Three Fee Structures

Regardless of the type of financial advisor you work with, it’s important to ask about their fee structure. Financial advisors typically follow one of three models:

1. Fee-Only Advisors
A fee-only advisor earns income exclusively from the fees paid by their clients. They do not receive commissions or other forms of compensation from third parties. This structure minimizes potential conflicts of interest and ensures the advisor’s recommendations are more likely aligned with the client’s best interests.

2. Fee-Based Advisors
Fee-based advisors charge fees for their financial services but may also receive commissions from the sale of investment products. While they offer planning services, the potential for commission earnings introduces a possible conflict of interest that clients should carefully consider.

3. Commission-Only Advisors
Commission-only advisors are compensated solely through commissions generated from the financial products they sell. Their income depends entirely on product sales, which can create incentives that may not always align perfectly with a client’s financial goals.

What is The Normal Fee for a Financial Advisor?

A typical fee for a financial advisor is often based on the value of the assets they manage. This can vary depending on the advisor’s type, the services offered, and the total value of the assets. Generally, individuals with larger portfolios tend to pay a lower percentage in fees.

When considering hiring an advisor, it’s important to evaluate the level of service they provide, how accessible they are when you have concerns, their certifications and experience, and their overall investment approach. These factors can help you determine whether their fees are reasonable for the financial advice you are receiving.

Financial advisor fees

Financial Advisor Fees

Typical costTypical cost
Assets under management (AUM)0.25% to 0.50% annually for a robo-advisor; 1% for a traditional in-person financial advisor.
Flat annual fee (retainer)$2,000 to $7,500
Hourly fee$200 to $400
Per-plan fee$1,000 to $3,000
Source: nerdwallet.com

Why a Financial Advisor Cost and Fee Structure matter

There are various fee structures across the financial advisory industry, which can be broadly grouped into three models: fee-only, fee-based, and commission-only.

This alignment is the primary reason why financial advisor cost and fee structure matter. Under a fee-only model, advisors charge a straightforward fee—whether as a percentage of assets under management (AUM), an hourly rate, or a fixed milestone-based fee. There are no commissions involved, which means advisors are not incentivized to recommend specific products for personal gain.

In contrast, a fee-based model combines both fixed fees and commissions. Here, commissions are typically paid by companies offering investment products. While the initial fee may appear lower, the potential for conflicts of interest increases, as advisors might be inclined to recommend products that earn them additional compensation.

A commission-only model eliminates fixed fees altogether. Although it can seem more cost-effective upfront, this structure poses a higher risk of biased recommendations, with advisors potentially favoring products that offer the highest commissions—whether or not they best fit the client’s needs.

Financial Advisor Cost

Understanding these models is crucial for selecting an advisor whose compensation structure supports objective, client-centered financial planning.

Flat-Fee Financial Advisor Cost Per Plan

A flat-fee financial advisor cost per plan refers to a fixed amount charged for preparing a financial plan, typically ranging from $1,000 to $3,000. This approach may appeal to clients who want a one-time plan while minimizing upfront costs.

However, financial plans are not static documents. They require regular updates to stay aligned with your evolving financial circumstances. A financial plan reflects your current situation and outlines a strategy to achieve short-, medium-, and long-term goals. Yet, as life changes—whether through career shifts, family developments, market fluctuations, or unexpected events—your financial plan must adapt accordingly.

Good financial advisors continuously monitor a client’s progress toward their life goals and recommend adjustments when needed. Without this ongoing guidance, even a well-designed initial plan may quickly become outdated.

For high-net-worth individuals, paying an annual advisory fee based on assets under management—often around 1%—can be worthwhile if the advisor helps save hundreds of thousands of dollars and facilitates long-term wealth growth. In contrast, a one-time flat-fee advisor may not provide the proactive, ongoing portfolio management and cost control that a dedicated wealth manager delivers.

Ultimately, financial advisor cost should not be viewed in isolation. The real value lies in how the fee is structured and whether it supports a relationship focused on helping you achieve your financial goals over the long term.

The Benefits of Incurring the Financial Advisor Cost

As a high-net-worth or ultra-high-net-worth individual, it is important to clearly recognize the benefits of paying financial advisor fees. A skilled financial advisor brings expertise across multiple areas, including tax planning, retirement planning, portfolio management, business succession, and legacy planning. Instead of consulting multiple specialists independently, working with a single experienced advisor can streamline the process, ensuring that all financial strategies are coordinated and aligned with your overall objectives.

Having one professional manage these interconnected aspects can lead to more efficient decision-making, as each action is evaluated for its impact across all areas of your financial life. This holistic approach can help avoid fragmented strategies and minimize risks.

In addition, a qualified financial advisor implements a disciplined system for decision-making. Financial choices made on emotion or instinct can be risky, particularly when large sums are involved. During past market downturns, such as the dot-com crash, many high-net-worth investors suffered significant losses due to impulsive decisions. A structured, goal-driven system helps maintain focus on long-term objectives, regardless of market volatility, while the advisor continuously monitors and adjusts the strategy as needed.

Overall, working with an experienced financial advisor provides access to a coordinated, expert-driven system designed to safeguard and grow wealth over time.

What is the Normal Fee for a Financial Advisor?

Now that you understand what financial advisor cost involves and how different fee structures operate, you might be wondering—what is the normal fee for a financial advisor? With so many models and structures available, it’s important to know the general industry standards.

For high-net-worth or ultra-high-net-worth individuals, working with a fee-only financial advisor typically means paying an average of 1% of the assets under management (AUM). For example, if an advisor manages $10 million on your behalf, a 1% fee would amount to $100,000 annually. This 1% is generally the base management fee; additional services or specialized tasks may incur extra charges.

Hourly rates vary more widely. Depending on your location, the advisor’s expertise, and the type of advice you seek, hourly rates can range from $100 to $700. It is advisable to confirm specific rates directly with any prospective advisors you are evaluating.

Fixed-fee models typically range between $1,000 and $3,000. However, fixed-fee plans usually provide a financial plan without ongoing monitoring or periodic updates, requiring clients to implement and manage the plan themselves.

Finally, commission-only structures are also an option. In such cases, the client does not pay an upfront fee; instead, the advisor earns commissions directly from the companies offering the investment products. It is important to carefully evaluate the potential for conflicts of interest under this arrangement.

Finding the Best Financial Advisors

We believe it is essential to speak directly with an advisor before deciding whom to hire. A personal meeting gives you the opportunity to evaluate important factors like the advisor’s communication style, working approach, and overall compatibility with your financial goals. Building a foundation of trust is critical when selecting someone to help manage your wealth.

Beyond conducting your own research, it can be helpful to ask family members, friends, or colleagues for recommendations based on their own experiences with financial advisors.

Choosing the right financial advisor is an important step toward securing your long-term financial success. Take the time to find an advisor who not only offers expertise but also aligns with your values and planning needs.

As you explore your options, you can also browse trusted resources designed to help you navigate the process: