Financial Advisor Fees and Costs Go Far Beyond What the Advisor Quotes You

How much do financial advisors 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. Because we’re about to pull back the curtain on financial advisor fees. For those with $5+ million in liquid investable assets you can download an in-depth guide here.

In our signature written work, 7 Secrets to High Net Worth Investment Management, Estate, Tax, and Financial Planning, you’ll discover eight separate costs your advisor could be charging you. Only one of them is the fee they quote you. With a cover price of $599, you can get this ultimate guide to high net worth investment management for free. Click here to get your free copy.

So if you want the full truth about financial advisor fees and if they’re worth it, 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 story about financial advisor fees 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 financial advisors cost, 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 story.

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 financial advisors have found to charge you money.

In our signature written work, 7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planning, you’ll discover eight separate costs your advisor could be charging you.

Here’s the kicker:

Only one of those eight costs is the fee they quote you. Normally sold for $599, you can get this ultimate guide to high net worth investment management for free. Click here to get your free copy.

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

3 Types of Financial Advisor Fee Structures

What Is a Fee-Only Financial Advisor?

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.

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. It’s 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.

What about hourly fees?

Hourly financial advisors operate more on a pay-as-you-go approach. The more complex your personal finances, the more the hourly approach will cost you.

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 this advisor fee 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.

More on that in a bit…

What Is a Fee-Based Financial Advisor?

Fee-based advisors differ from fee-only advisors 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 fee-based advisors may charge 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 the percentage fee of a fee-only financial advisor would 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.

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 services in their own interests but that hopefully also works well for you.

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

How Much Does Each Type of Advisor Charge?

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 you can expect to pay a financial advisor, whether that’s fee-only, fee-based, or commission-based.

Fee-Only Charges

For fee-only financial advisors, they can charge 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. 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.

You can expect much lower percentage fees of around 0.25-0.5% when using robo advisors instead of human financial advisors. 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. 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, 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 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…

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.

As stated earlier, they 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 salesman 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 how much you’re actually paying this type of advisor, 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 aren’t going to 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 what your fee-only advisor achieves 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 ‘zerofee’ advisor. This is accurate in the sense that they charge no percentage, flat, or hourly fee like a fee-only advisor does.

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


Many financial advisors you encounter at big banks, investment advisor firms, and brokerage houses operate on commissions and 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, are financial advisor fees negotiable?

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

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.

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.

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.

Where Financial Advisor Costs Get Complicated

What if you need multiple financial planning services, like insurance, accounting, and estate planning? 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 and aren’t sure of the best way to proceed?

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 with their money, 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.

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.

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.

Here’s an investigation into six of these ‘hidden’ costs, and how much money these financial planners can drain from your investment portfolio.

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:

[Click to tweet: Managing investment costs is part of investment performance]

The right way to think about this is, managing these 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 you are going to get charged before utilizing the services of a financial advisor.

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.

You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.

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