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How Much Does A Financial Advisor Cost – 3 Fees To Know

How much does a financial advisor cost? If you like simple answers to complex questions because you don’t want to know the real truth, you can stop reading right now.

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7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning

The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.

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Because we’re about to pull back the curtain on financial advisor fees. These vary widely across the industry. And choosing the wrong advisor can needlessly cost you millions in excess and unnecessary fees and costs.

For those with $5+ million in liquid investable assets, you can get an in-depth guide to optimizing your portfolio and securing your retirement here.

If you want the full truth about how much a financial advisor costs and whether it’s worth it to have one, this article is the best place to start.

Why? Because we are financial advisors (we exclusively serve clients with $5 million to $500 million in liquid assets), and we’re going to tell you that some of the fees you could be paying to other advisors are NOT worth it.

Let’s start with this:

The giveaway that there’s more to the question of how much a financial advisor costs is that some advisors will claim to charge no fees. Any thinking person knows that can’t be true, because no one works for free.

With that in mind, there seems to be a simple answer to the question of how much a financial advisor costs, which you can find all over the internet.

That answer is, fees can be categorized as one of three types: Flat fees, percentages, and commissions.

But that’s only part of the answer to how much a financial advisor costs.

It is true though that the financial advisor’s percentage fees and flat fees are relatively simple to understand. So, we’ll start there too. But before you go, make sure you read to the end to find out all the other ways wealth advisors can confuse you about how much a financial advisor costs.

In our signature written work, 7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planningyou’ll discover eight separate costs your advisor could be charging you, and you’ll have the answer to the question of how much a financial advisor costs.

Here’s the kicker:

Only one of those eight costs is the fee they quote you.

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It is worthwhile to hire a financial advisor if you are not very familiar with financial markets, retirement planning, and where, when, and how to invest in various types of assets.

Typically, you will pay a percentage of the assets you own, which you place under the management of the investment firm or advisor. You may also pay other fees or commissions.

How they charge will depend on the firm. They may charge an hourly fee. They may charge a percentage of the value of the assets they manage, typically 1%, or they may charge an annual retainer fee.

An advisor who charges a flat fee may charge between $2,000 and $7,500 per year. Or an advisor can charge a percentage of the value of the assets they manage, typically 1%.

The typical advisor with charge either a percentage of the value of the assets they manage or a yearly fee. Their fees may vary with the services they offer. The client may negotiate the fees.

It is worthwhile if the advisor is doing a great job at growing and preserving your assets. If you have only basic financial needs, you could pay a one-time fee for the advice you need.

You may need an advisor if you have a lot of assets to manage. You may want help with controlling your tax payments or improving your asset allocation. You may be concerned about risk management.

Many advisors charge a yearly fee of about 1% of the value of the assets they manage. Some advisors charge a flat monthly or yearly fee or an hourly fee for a particular service.

If your financial planner is able to help you earn substantially more each year than the fee they charge, then it’s worthwhile, especially if you feel they have expertise from which you can benefit.

A financial advisor is someone who will advise you on investments, whereas a financial planner with take a more holistic approach that takes into account your overall financial situation and goals.

3 Important Things About Financial Advisor Fees

3 Important Things About Financial Advisor Fees

  1. Three Types of Financial Advisor Fee Structures
  2. How Much Does Each Type of Advisor Charge?
  3. The Fiduciary Standard and Financial Advisor Fees

Let’s begin with the simple part – fee or compensation structures.

1. Three Types of Financial Advisor Fee Structures

  • What Is a Fee-Only Financial Advisor?
  • What Is a Fee-Based Financial Advisor?
  • What Is a Commission-Only Financial Advisor?

What Is a Fee-Only Financial Advisor?

How much a financial advisor costs will depend of their fees. Fee-only financial advisors may charge flat fees ranging from $1000 to $5000; they may charge hourly fees ranging from $100 to $400, or they may charge a percentage fee, typically around 1% of the value of the client’s assets under management.

A fee-only advisor charges no commissions as part of their advisory service. This type of financial advisor’s fee structure comes in three varieties – flat fee, hourly, and percentage.

With a flat fee approach, the financial advisor creates an investment plan for you, but then leaves it to you to manage from that point on.

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Sound good?

Well, only if you’re the type of person who wants to drive the ship, pay attention to investment and market trends, buy, sell, and trade, and do all the other investment management tasks yourself, in which case you don’t care that much about how much a financial advisor costs. The management aspect is work. And the stakes are high. But if that’s you, then this flat fee approach can be appealing.

The flat fee buys you a ‘moment-in-time’ financial plan.

Why do we call it that?

Because all financial plans become obsolete and eventually fail. Just like when you drive a new car off the lot, your plan begins losing relevance and value the moment you take it from the advisor’s hands.

Think about it:

The conditions of your life in which that plan was created do not remain constant. Without the financial advisor services to help you keep your financial plan updated and accurate for your ever-changing life situation, its usefulness and effectiveness diminish over time, regardless of how much a financial advisor costs.

What about hourly fees?

Hourly financial advisors operate more on a pay-as-you-go approach. With this approach, how much a financial advisor costs increases with the complexity of your personal finances, so the hourly approach will cost you more.

Pretty simple stuff.

And how about percentage based financial advisor fees?

The percentage-fee advisor charges an ongoing fee, and this type of advisor works with your finances continuously.

You can see the differences right away.

They charge a fee based on a percentage of your assets under management in your account balance per year. Sometimes, how much a financial advisor costs in this scheme steps down a bit if your assets surpass certain levels.

How much should you expect to pay for a fee-only financial advisor?

Well, that’s not actually the right question.

What matters much, much more is, what kind of advisory services you get for that fee, and not how much a financial advisor costs. More on that in a bit…

What Is a Fee-Based Financial Advisor?

How much a financial advisor costs in a fee-based scenario differs from in a fee-only system in that a fee-based advisor may be able to earn extra when buying and selling certain investment products to you or on your behalf.

Here’s the main idea:

The fee (percentage, flat, or hourly) is the starting point. The fees they may earn get added on top of that.

This is why how much a financial advisor costs can depend on a slightly lower percentage than fee-only financial advisors. If you encounter this, financial advisors can afford it because they make enough on commissions to make up the difference.

What’s the bottom line?

Typically, commissions + fees will cost you more than how much a financial advisor costs with a percentage fee-only setup on its own.

Click to tweet: Commission-based advisors cost way more than the percentage charged by a fee-only financial advisor

What Is a Commission-Only Financial Advisor?

A commission-based advisor earns all their income by selling products or investments on your behalf, and taking a percentage of the sale price each time. How much a financial advisor costs if they are commission-only covers a broad spectrum.

Commission-based content can include annuities, brokerage packages, mutual funds, and insurance.

You know where this one’s going:

Because this type of financial advisor derives all their money from sales and transactions, they often make financial planning recommendations in their own interests but that hopefully also work well for you, regardless of how much a financial advisor costs on a commission basis.

We’ll see how well they do at this in a bit.

2. How Much Does Each Type of Advisor Charge?

  • Fee-Only Charges
  • Fee-Based Charges
  • Commission Charges

Let’s do a little comparison of financial advisor fees and see if each type is worth it.

And as stated, even though the services you get matter much more than just the fee you’ll be charged, you should still have an idea of how much a financial advisor costs, whether that’s fee-only, fee-based, or commission-based.

Fee-Only Charges

For fee-only financial advisors, how much a financial advisor costs is based on flat fees, hourly, or percentages, or sometimes a combination such as an initial consultation fee combined with a percentage.

Flat-rate fees range from $1000 to $5000 for a one-time charge.

And remember:

As stated above, that gets you started with a ‘moment-in-time’ plan, and it becomes your responsibility to follow it from that point on. As your life situation changes over time, you’ll find that financial plan becoming less and less relevant and helpful to your financial goals.

Hourly fees can range anywhere from $100 to $400 per hour, so how much a financial advisor costs varies accordingly. It depends on the complexity of your situation, the experience of the financial advisor, and other factors.


Percentage fees hover around 1% of your assets under management, per year. But this can vary quite a bit.

If you entrust $1 million to your investment advisor, a 1% fee would be $10,000.

How much a financial advisor costs when using robo advisors instead of human financial advisors will be a much lower percentage fee of around 0.25–0.5%. This is because they will also have much more limited service capabilities.

A robo advisor could be your helper if you need simple investment management advice with low financial advisor fees, significantly decreasing how much a financial advisor costs. Another option is to get a combination of a robo advisor and an investment advisor, a service offered by some firms.

Here’s the most important thing:

In ideal situations, the percentage-based financial advisor’s fee buys you:

  • Customized, ongoing attention
  • Continuous plan updates
  • Rebalancing of your asset allocation
  • Credit score maintenance for your credit cards
  • Other personalized benefits

And for investors with high net worth or ultra high net worth working with a wealth manager, who may be concerned about how much a financial advisor costs, you can expect many more services including:

  • Tax minimization strategies
  • Estate planning expertise
  • Advice regarding complex and high-stakes financial decisions such as when to offload company stock as you near retirement
  • Business exit strategic planning
  • Unbiased fiduciary advice in your best interests

And much more.

By using this type of compensation structure, this can be said to create a “great user experience”.

Which deal is better? How do you decide? We’re not done yet! There’s a lot more to this question than just the simple fees.

Keep reading…

how much does a financial advisor cost

Fee-Based Charges

Your initial financial advisor fees with a fee-based advisor will look similar to those of the fee-only advisor. They could be hourly, percentages, or a flat fee, which determines how much a financial advisor costs.

As stated earlier, the fees may be a little lower on occasion, because this financial advisor also earns income from commissions.

Their income is based on a baseline fee, and it increases from there. It’s similar to a mattress salesperson who earns a base income but has to earn commissions from actual sales to make a decent salary.

Don’t miss this:

It’s harder to know with commissions how much a financial advisor costs, because you don’t always know when they’re earning a commission or an extra slice of the pie. Sure, they have to disclose it to you, but it could be buried on page 23 of a prospectus you didn’t read.

Commission Charges

Typical commissions for the selling of investment products and packages range from 3-6% of the sale. That means, if your commission-based (or fee-based) advisor invests $500,000 of your assets in a particular mutual fund, they would net a $25,000 commission at a 5% rate, per year.

As that example shows, it doesn’t take much for commissions to dwarf all the fee-only variations listed earlier.

Do you get it?

This is how some advisors can charge “zero” fees.

Generally, it’s pretty difficult to justify the higher costs of commission-based financial advisors. Your investments would need to perform far above how much a financial advisor costs and what they achieve for you, just to break even. The likelihood of that is exceedingly tiny.

So why does anyone go with commission-based advisors if they cost so much more?

You already know:

Because they buy the pitch that this is a ‘zero-fee’ advisor. This is accurate in the sense that in this case, how much a financial advisor costs is not based on a percentage, flat, or hourly fee like a fee-only advisor does.

But it’s inaccurate in the impression it gives that with their approach, the cost is little or nothing when in fact it’s much more in most cases.


At big banks, investment advisor firms, and brokerage houses, how much a financial advisor costs is often based on commissions and these firms’ advisors claim to be zero-fee advisors.

Pillar Wealth Management, LLC., isn’t like that. They wrote the book on the best investment management strategies for investors with high net worth. Even better, the authors and founders with over 60+ years of experience want to work directly with you. Get the undivided attention, focus, advice, and proven expertise you deserve!

Now, can you negotiate how much a financial advisor costs?

To some degree, yes. But this is most common among wealth managers serving clients with ultra high net worth.

3. The Fiduciary Standard and Financial Advisor Fees

The best assurance you can get that your financial advisor works to minimize your fees is if they follow the fiduciary standard.

What is a fiduciary?

A fiduciary is a financial advisor, wealth manager, or Registered Investment Advisor (RIA) who adheres to the standard requiring them to only give financial advice that is in the best interests of the client. It is not a toothless promise. An advisor not doing this who claims to do it can be held accountable.

For a fiduciary, how much a financial advisor costs cannot be tied to his or her interests.

This is crazy:

A 2015 report found that “savers receiving conflicted advice earn returns roughly 1% lower per year…we estimate the aggregate annual cost of conflicted advice is about $17 billion each year.”

Did you catch that?

Not only do you pay more for non-fiduciary financial advice, but in most cases, your investments do worse too.

As investors, you’re losing on both fronts – with how much a financial advisor costs and with how much you’re earning.

Few commission-based advisors also act as fiduciaries (because living off commissions seldom aligns with your best interests). Thus, you shouldn’t expect your investments to perform better when managed by a commission-based advisor. Based on that report, you’ll do worse, and you’ll be paying 3-6% for the privilege.

how much do financial advisors charge

Where Financial Advisor Costs Get Complicated

If you need multiple financial planning services, like insurance, accounting, and estate planning, then how much a financial advisor costs can get complicated. If your advisor offers all these services in-house, you may pay more to access them. But if you need them, you need them.

What if you have complex financial decisions, aren’t sure of the best way to proceed, or how much a financial advisor costs?

For instance, when a spouse dies, transitioning back to single life (or marrying again) requires many complex financial shifts.

Look at this list:

Depending on your age when this happens, you might have to deal with individual retirement accounts (IRAs), Social Security, pensions, life insurance, and all the taxes, fees, required minimum distributions, and other factors that often incur costly consequences if you make the wrong choices.

For a really simple example, inheriting a Roth IRA has very different tax implications than a traditional IRA.

But here’s the sad part:

So many people end up paying far higher taxes than they should even in this very simple scenario. Most people need investment advisory services to manage their money, no matter how much a financial advisor costs, and would have more of it with a good investment advisor on their side!

Does your financial advisor offer help with situations like this?

If you’re paying hourly, they almost certainly do, but you’ll be paying for it every step of the way.

And it doesn’t stop there:

The same question applies to divorce, re-marriage, real estate sales, and purchases, selling or starting up a business, medical debt, long term care – these and countless other real-life questions are where most of the complexity lies when it comes to personal finance.

Does your financial advisor offer help with these?

This is why we say it:

The fee alone doesn’t tell the fully story of how much a financial advisor costs.

Click to tweet: Financial advisor fees don’t tell the whole story

If you pay 0.3% but get a robo advisor or a human advisor who checks in on your investments once a year but other than that is a stranger, that’s a completely different animal than an advisor who helps with all the situations just described – in the heat of battle when it matters most.

Financial planner fees

The fees charged by a financial planner or advisor will vary depending of the fee structure they or the firm they work for has established. The fees will also vary depending on the financial services that the planner is able to offer. Also, the planner may set their fees based on the needs of the client.

Advisors vary by type: an advisor may be someone that you meet with face-to-face; they may be a robo advisor, or they be someone who works with you online, but not in person.

The type of advisor you choose depends on your needs, such as whether you want to simply trade on the stock market, or you need help with budgeting and financial planning. As a result, the cost of the advice will vary.

Cost of an in-person financial planner

Once you have chosen a financial planner, you will necessarily discuss your financial situation with them, what services you would like to use, and the fees you will have to pay. You should expect your advisor to be transparent about the cost of their services.

The average cost for a financial planner is typically based on a percentage of the value of the assets under management, which averages around 1%. This is a fee paid yearly for investment management.

However, some planners reject the AUM model and charge a flat fee yearly. This is because they do not think that the complexity of their advice increases with the value of the assets.

The planner may provide other services such as retirement planning, in which case they will charge a flat fee for that service. The fee will vary based on the complexity of the plan, but may be about $1,000 to $3,000.

Cost of a robo-advisor

A robo-advisor is a software system that provides investment advice based on computer algorithms. You can expect to pay a percentage of the assets under management, somewhere between 0.25% to 0.50% annually. Some may charge a flat fee per month.

As an example, Fidelity Go (Fidelity’s AI product) charges 0.35% a year for an account value of $50,000 or more.

If the fee charged is a flat fee, it can be around $12 per month.

Cost of online financial planning

Online financial planning is like having a personal in-person advisor. However, all services and advice are provided on-line, with an added human touch while providing the same advice as a robo advisor.

Fees vary depending on the firm. However, as an example, Fidelity Personalized Planning and Advice charges 0.50% annually.

financial advisor fees

What Does Pillar Charge?

Okay, you made it this far.

But what about us? What does Pillar Wealth Management do with regard to fees?

You probably already guessed it.

Pillar Wealth Management is a fee-only financial advisor. We are a fiduciary, and we charge an all-inclusive fixed percentage.

‘All-inclusive’ means we do not charge extra fees for any of these situational financial questions as they arise. We just help you walk through them.

If we need to collaborate with your estate lawyer, accountant, insurance rep, or other specialists, we work with them too, again at no extra fee. All this gets included in the single percentage.

Here’s the bottom line:

There is no simpler financial advisory compensation structure possible.

The Full Truth about What Your Financial Advisor Costs

The entire preceding discussion has only touched on the financial advisor costs you pay to your financial advisor directly.

Here’s the scary part:

Even with the commission-only advisor, the “price tag” that you pay may be much, much more than you imagine, for numerous other reasons in addition to their fees.

Understanding those other costs before choosing to hire a financial advisor may be the most financially astute decision you can make. Even the best fee-only advisor who earns the highest performance must be called into question over these financial advisor fees.

Here’s why this matters:

Managing investment costs is part of investment performance

If your financial advisor is not minimizing these hidden costs, their investment gains and the growth they appear to have earned for you will add up to far less than what a different financial advisor will earn who is as fixated on minimizing your costs as he is on maximizing your performance.

You want the best of both worlds:

Low cost. High performance.

What’s at stake? Hundreds of thousands, perhaps millions of dollars in lifetime growth.

Bottom Line

It is critical to know how much a financial advisor costs before utilizing their services.

According to the Wall Street Journal, understanding the advisor’s fee structure is crucial to know which one suits your current financial circumstances. Besides, you should also choose an advisor with a fiduciary standard, and this is most common among advisors using a fee-only structure.


To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.

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