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

How much does a financial advisor cost? The answer is not always simple, as fees can vary widely across the industry. Understanding how financial advisors charge for their services is crucial, especially because selecting the wrong advisor could result in significant lost investment opportunities over time.

If you have $5 million or more in liquid investable assets, understanding how to maximize your portfolio and secure your retirement becomes even more critical.

Wondering how much a financial advisor will cost—and whether working with one is truly worth it? Start by reading this guide.

It’s important to recognize that not all financial advisor fee structures are created equal. Some advisors advertise very low or even “zero” fees, but it is important to remember that no one provides professional services without compensation. Understanding what you are actually paying for is crucial to making informed decisions about managing your wealth.

You might find simplified answers online suggesting that financial advisor fees fall neatly into three categories: flat fees, percentage-based fees, and commissions. While this breakdown is helpful, it only covers part of the real picture when it comes to the cost of working with a financial advisor.

The reality is that the quoted fee is often just one of several costs involved.

Financial Advisor Fees

Below is an overview of typical financial advisor fee ranges. Keep in mind that these fees can vary based on the level of service provided, geographic location, and the specific financial advisor’s business model.

Fee Type	Typical Cost
Assets under management (AUM)	0.25% to 0.50% annually for a robo-advisor; around 1% for a traditional in-person financial advisor.
Flat annual fee (retainer)	$2,000 to $7,500 per year.
Hourly fee	$200 to $400 per hour.
Per-plan fee	$1,000 to $3,000 for a comprehensive financial plan.

Understanding these typical fee structures can help you evaluate the costs associated with working with a financial advisor and choose the model that fits your financial goals.

Financial Advisor Fees by Service

Financial advisory services are designed to meet the needs of a wide range of clients, offering options suited to different financial situations and levels of complexity. Some options are fully automated, while others involve highly personalized, hands-on planning.

One option is the robo-advisor, a financial technology service that combines automation with investment management. Driven by algorithms, robo-advisors are well-suited for individuals who need only basic investment services and prefer minimal human interaction. They often come with lower fees compared to traditional advisory models.

Another option is online financial planning firms, which provide a hybrid model. These firms offer more personalized service than robo-advisors, often including access to human advisors while maintaining a virtual structure to keep costs leaner than traditional setups. This model strikes a balance between digital convenience and personal interaction.

Traditional financial planners, however, continue to play an important role, especially for clients requiring customized strategies. These planners provide face-to-face consultations, ongoing investment management, estate planning, and retirement strategies. Because this model emphasizes personal service and operates from physical office locations, it generally comes with higher fees.

Each type of financial advisor service brings distinct advantages. The right choice largely depends on the complexity of your financial needs, the size of your investment portfolio, and the level of personalized service you require. Understanding these differences is key to selecting the advisory model that best fits your goals.

Robo-Advisors

Robo-advisors represent a major innovation in financial technology, offering automated, low-cost investment management services. These platforms create and manage investment portfolios based on an individual’s financial goals, risk tolerance, and time horizon, using sophisticated algorithms to guide investment decisions.

Fees for robo-advisors typically range between 0.25% and 0.50% of assets under management (AUM) annually. For example, an investor with a $50,000 portfolio might pay between $125 and $250 per year. Some robo-advisors, such as SoFi Automated Investing and Ally Managed Portfolios, have eliminated management fees entirely, making them particularly attractive to newer investors or those seeking a more hands-off approach.

While robo-advisors offer low fees and accessibility, they generally do not provide customized financial planning or personalized one-on-one advice. Instead, users have access to online tools and financial calculators that help guide their investment choices and financial decisions. These platforms are ideal for individuals looking for a simple, algorithm-driven way to manage their investments with minimal ongoing oversight.

Online Financial Planning Services

Technology has dramatically reshaped the landscape of financial planning services, creating new platforms that blend the automation of robo-advisors with the personalized service of traditional financial advisors. Hybrid models, such as Betterment Premium, offer clients a combination of computer-managed portfolios and access to human advisors for personalized planning and advice. These services are delivered digitally—via phone or video call—serving a broad range of clients with account minimums that can start at zero and extend to several hundred thousand dollars, opening financial planning opportunities to a wider audience.

Among the available options, services like Empower and Facet Wealth have distinguished themselves by offering clients dedicated certified financial planners (CFPs). These planners, who undergo extensive training to earn their credentials, work directly with clients to develop personalized investment portfolios and comprehensive financial strategies. This model provides the depth of traditional advisory services in a fully online environment, helping reduce overhead costs and, as a result, lowering the fees charged to clients. This evolution makes quality financial advice more accessible while aligning with the modern preference for convenience and flexibility.

The cost of online financial planning services tends to be significantly lower than that of traditional face-to-face advisory firms. Online services typically charge a percentage of assets under management (AUM) or a flat annual fee. AUM fees generally range from 0.30% to 0.89% annually. Flat fees, by comparison, often start at around $2,000 per year and adjust based on the complexity of the client’s financial situation. These fees typically cover investment management, the development of a comprehensive financial plan, and continued access to financial advisors through digital channels. For many investors, online services offer significant savings while maintaining a high level of advisory support.

AUM Fee

The assets under management (AUM) fee structure is common across robo-advisors, online planning services, and traditional human advisors. Under this model, clients are charged a percentage of their managed assets annually. Among traditional advisors, AUM fees often hover around 1% per year, although the percentage can vary. Smaller account balances may incur higher percentages, while larger balances often benefit from discounted rates.

Some traditional advisors set asset minimums, such as $250,000, to ensure that client accounts are economically viable under their fee structure. This practice can limit access to individuals with substantial assets.

The services offered under an AUM fee model can vary significantly. Some advisors focus solely on investment management—adjusting portfolios based on financial goals and risk tolerance—while others provide a broader suite of services. These additional services may include retirement planning, education funding strategies, tax planning, and legacy or estate planning. Many clients value the ongoing relationship with an advisor, benefiting from periodic adjustments and advice as their financial situations evolve.

Retainer for Services

The predictability and transparency of a monthly or annual fee for financial advisory services can offer clients a clear understanding of what they are paying, regardless of the amount invested. This model is particularly attractive to those who appreciate having fixed-cost financial management. Fees typically range between $2,000 and $7,500 annually, depending on the complexity of the client’s financial situation. Clients with more complex needs—such as multiple income sources, overseas assets, international businesses, or complicated tax considerations—may fall at the higher end of the fee range to account for the additional time and expertise required.

The retainer generally covers comprehensive financial planning and investment management services. Advisors create a financial plan aligned with the client’s long-term goals and current situation, assist with the implementation of strategies, and provide ongoing reviews and necessary adjustments as financial circumstances evolve. This holistic approach ensures that all areas of a client’s financial life are integrated, offering stability and the potential for stronger financial outcomes over time.

Hourly Rate

Some financial advisors offer services on an hourly basis, making professional financial advice accessible to a broader range of clients regardless of asset size. Under this model, clients pay for the actual time spent addressing their financial needs. Hourly rates typically range between $200 and $400 per hour.

This structure is ideal for individuals who may not require continuous support but seek assistance with specific financial matters, such as retirement savings strategies, planning for education expenses, or developing a household budget. It offers flexibility, allowing clients to purchase only the services they need.

Hourly engagements often involve advice tailored to specific goals, from quick financial checkups to the development of a detailed financial plan. However, implementation and ongoing management remain the client’s responsibility unless additional hours are scheduled separately. This model is well-suited for those comfortable managing their day-to-day financial affairs but who seek professional input when making important decisions.

Flat Fee Per Plan

Some advisors provide a flat-fee service, where the client pays a one-time fee for a comprehensive financial plan. This option typically suits individuals who prefer a do-it-yourself (DIY) approach to financial management.

Flat fees generally range from $1,000 to $3,000, depending on the complexity of the financial plan. The advisor develops a detailed strategy based on the client’s goals, risk tolerance, and investment preferences but does not offer ongoing portfolio management. Clients receive a full roadmap, which may include budgeting advice, investment strategies, retirement planning, and other financial tools.

This arrangement is ideal for clients who feel confident executing their financial plans independently, using the provided guidance as a foundation for future decisions.

Commission

Under the commission-based model, financial advisors earn compensation through fees generated from the investment products they recommend to clients. Typically, this commission is a percentage of the amount invested and is deducted from the client’s funds. For example, mutual funds may carry charges between 3% and 6%, assessed at purchase or sale.

Because compensation is tied to product sales, the commission model can present potential conflicts of interest. Advisors may be incentivized to recommend products that generate higher commissions, even if alternative options might better serve the client’s financial goals. Additionally, many commission-based advisors are held to a suitability standard rather than a fiduciary standard, meaning recommended products must be “suitable” for the client but not necessarily the best possible choice.

The primary service offered under this model is investment management, typically without the broader financial planning support associated with other advisory fee structures. Clients considering commission-based advisors should evaluate recommendations carefully to ensure they align with their long-term objectives.

Where Financial Advisor Costs Get Complicated

The landscape of financial advisor fees is notably diverse and lacks a consistent standard, making it difficult to define a typical or “normal” cost. This variability is influenced by the range of fee structures and certifications advisors hold, both of which can significantly impact what clients are charged. Fee structures may include assets under management (AUM) fees, flat fees, hourly rates, or commission-based earnings, each aligning differently with the services provided. Additionally, the level of service varies widely among financial professionals; for example, a certified financial planner (CFP) typically offers a broader and more complex range of services compared to a financial coach, which can affect the overall fee. Geographic location also plays a role, with advisors based in metropolitan areas often charging more than those operating in smaller towns or rural areas.

While pricing differences can be substantial, it is important to focus on selecting services that match your specific financial needs rather than simply choosing based on cost. For instance, someone with modest financial needs might find that paying a flat annual fee of $2,000 is not cost-effective. In contrast, individuals managing more complex or larger portfolios may discover that opting for the lowest-cost advisor could result in advice that does not fully address the intricacies of their financial situation. Aligning the cost of advisory services with the depth of advice required is essential for achieving effective financial management.

Fortunately, the financial advisory marketplace offers a wide array of options to meet diverse financial circumstances and preferences. Whether seeking basic asset management or comprehensive financial planning, clients have access to a variety of advisors, fee structures, and service models. Conducting thorough research and engaging in preliminary consultations with potential advisors can help individuals better understand service offerings, fee structures, and overall fit—leading to a more informed decision that balances both financial goals and budget considerations.

3 Important Things About Financial Advisor Fees

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

Let’s begin with the basics—understanding the primary fee or compensation structures used by financial advisors.

1. The 3 Types of Financial Advisor Fee Structures

What Does a Fee-Only Financial Advisor Do?

A fee-only financial advisor charges clients directly for their services without earning commissions from investment products. This model is designed to minimize potential conflicts of interest. Fee-only advisors may charge:

• A flat fee, often ranging from $1,000 to $5,000 for a comprehensive financial plan
• Hourly fees, typically between $100 and $400 per hour
• A percentage of assets under management (AUM), generally around 1% annually

In the flat-fee model, the advisor develops a financial or investment plan but leaves the management and execution to the client. This approach may appeal to individuals who prefer to manage their investments actively and independently, staying informed on market trends, portfolio adjustments, and asset allocation strategies.

However, it is important to recognize that a flat-fee financial plan represents a “moment-in-time” snapshot of your financial life. As circumstances change—such as shifts in income, family needs, tax laws, or market conditions—the original plan can become outdated without ongoing professional review and updates.

Hourly fees reflect a pay-as-you-go approach. In this structure, the overall cost will vary based on the complexity of your financial situation and the number of consulting hours you require.

Under a percentage-based model, fee-only advisors charge an annual fee based on a percentage of the assets they manage for you. This fee may decrease slightly as your asset balance increases. Unlike flat or hourly fees, percentage-based arrangements involve continuous engagement, with advisors adjusting investment strategies as needed over time.

When considering how much a fee-only financial advisor costs, it is essential to focus not only on the price but also on the scope and quality of services included.

What Does a Fee-Based Financial Advisor Do?

Fee-based financial advisors use a hybrid model. In addition to charging fees (percentage, flat, or hourly), they may earn commissions from the sale of certain investment products.

In these cases, the initial fee might appear lower than that of a pure fee-only advisor because additional compensation is generated through product commissions. However, when both fees and commissions are combined, the overall cost may end up being higher compared to working with a strictly fee-only advisor.

Because fee-based advisors may have incentives tied to specific financial products, clients should carefully review any recommendations to ensure they align with long-term goals rather than commission structures.

What Does a Commission-Only Financial Advisor Do?

A commission-only financial advisor earns their income exclusively through the sale of investment products or insurance policies. Each time they sell a product—such as annuities, mutual funds, brokerage services, or insurance—they receive a commission, usually a percentage of the transaction amount.

While commission-based advisors may offer useful services, the model can introduce potential conflicts of interest. Their compensation depends directly on the products sold, which may influence the advice given. Additionally, commission-based advisors are typically held to a “suitability standard,” meaning the products they recommend must be appropriate for the client’s situation but not necessarily the best available option.

When evaluating commission-only advisors, it is important to carefully assess whether the recommended solutions genuinely align with your overall financial strategy.

2. How Much Does Each Type of Advisor Charge?

Understanding the different fee structures is essential when selecting a financial advisor. Here are the three primary types of fee models:

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

While the services you receive often matter more than just the fee amount, it is still important to understand how financial advisors structure their charges.

Fee-Only Charges

Fee-only financial advisors typically charge using flat fees, hourly rates, percentage-based fees, or a combination of these structures. Flat fees generally range from $1,000 to $5,000 for a comprehensive, one-time financial plan. However, because these plans reflect your financial situation at a specific moment, they can become outdated over time as your life circumstances change.

Hourly rates for fee-only advisors usually range between $100 and $400, depending on the complexity of your financial needs and the advisor’s expertise.

Percentage-based fees typically hover around 1% of assets under management (AUM) annually. For example, a $1 million portfolio managed at a 1% fee would result in a $10,000 annual advisory cost. Robo-advisors offer an alternative at a lower fee, typically between 0.25% and 0.50% of AUM, due to their limited service offerings.

When working with a percentage-based advisor, clients may receive services such as:

• Customized, ongoing financial attention
• Continuous updates and adjustments to financial plans
• Regular rebalancing of asset allocation
• Monitoring and advice on credit management strategies
• Additional personalized financial support as needed

High-net-worth and ultra-high-net-worth individuals often benefit from expanded services, including:

• Tax minimization and optimization strategies
• Estate planning and legacy structuring
• Advice regarding complex financial decisions, such as managing concentrated stock positions
• Strategic planning for business exits or transitions
• Unbiased fiduciary advice aligned with long-term best interests

Fee-Based Charges

Fee-based financial advisors may charge clients using flat fees, hourly rates, or percentage-based fees, similar to fee-only advisors. However, they also earn commissions from financial products they recommend or sell, which can affect the overall cost structure.

While the base fees may appear comparable to those charged by fee-only advisors, additional product commissions can make the total cost higher. Transparency can also become an issue, as commission disclosures may not always be immediately obvious without reviewing detailed documentation.

Clients should ensure they fully understand all fee components when working with fee-based advisors to accurately assess the value and cost of services received.

Commission Charges

Commission-only financial advisors earn their income through the sale of investment or insurance products, without charging upfront planning fees. Typical commissions range from 3% to 6% of the investment amount. For example, investing $500,000 in a mutual fund with a 5% commission would generate a $25,000 commission for the advisor.

While this model can appear cost-effective at first glance, the cumulative cost of commissions may exceed the fees charged by fee-only or fee-based advisors. Moreover, commission-based advisors are usually held to a “suitability standard,” meaning they must recommend products that are appropriate, though not necessarily optimal, for the client’s needs.

Clients should carefully review recommendations under this model to ensure that the advice supports their long-term financial objectives rather than merely fulfilling minimum standards.

Negotiating fees may be possible, particularly among wealth managers serving ultra-high-net-worth clients, but transparency and a full understanding of the advisor’s compensation model are key to making an informed choice.

3. The Fiduciary Standard and Financial Advisor Fees

One of the strongest assurances that a financial advisor will prioritize minimizing client fees is adherence to the fiduciary standard.

A fiduciary is a financial advisor, wealth manager, or registered investment advisor (RIA) who is legally and ethically obligated to act in the best interests of the client. Unlike a simple promise of good service, fiduciary responsibility carries legal accountability. Advisors operating under this standard must ensure that their recommendations are based solely on what is best for the client—not what might benefit the advisor’s own financial interests.

The impact of fiduciary versus non-fiduciary advice is significant. A 2015 report by the White House Council of Economic Advisers found that savers receiving conflicted financial advice earned returns approximately 1% lower per year. The estimated aggregate annual cost of conflicted advice at the time was about $17 billion.

This finding highlights two important considerations: non-fiduciary advice can both increase the cost of financial services and reduce investment returns. As a result, clients working with non-fiduciary advisors may find themselves paying more while also achieving lower investment outcomes.

It is important to note that few commission-based advisors operate under a fiduciary standard. Because commission-based compensation can create potential conflicts of interest, it may not consistently align with the client’s best financial interests. Clients seeking to optimize investment performance and advisory value should carefully consider whether their financial advisor adheres to the fiduciary standard when evaluating both service quality and overall costs.

Cost of an In-Person Financial Planner

When working with a traditional financial planner, you can expect to have an initial consultation to discuss your financial situation, the services required, and the associated fees. Advisors should be transparent about the costs and scope of their services.

The most common fee model among in-person financial planners is a percentage of assets under management (AUM), typically around 1% annually. This fee covers the management of your investment portfolio.

Alternatively, some planners opt to charge a flat annual fee rather than a percentage. These planners believe that the complexity of the advice they provide does not necessarily scale with asset size.

For specialized services such as retirement planning or estate planning, planners may charge a fixed project fee, which often ranges between $1,000 and $3,000, depending on the scope and complexity of the work involved.

Cost of a Robo-Advisor

A robo-advisor is an automated platform that manages investments and provides portfolio advice based on algorithms. Robo-advisors generally charge lower fees compared to traditional advisors, with annual costs usually at or below 0.50% of assets under management. Some robo-advisors also offer flat monthly fees.

For example, Fidelity Go charges 0.35% annually for accounts with a balance of $50,000 or more. Some platforms may instead charge a flat fee, such as approximately $12 per month, depending on the level of service and features provided.

Cost of Online Financial Planning

Online financial planning services combine elements of robo-advisors and traditional human advisors. Although the interaction is primarily digital, many online platforms provide access to human financial planners for more personalized advice.

Fees for online financial planning services vary depending on the provider. As an example, Fidelity Personalized Planning and Advice charges an annual fee of approximately 0.50% of assets under management.

This model offers an accessible alternative for individuals seeking more personalized financial planning support without the higher costs associated with full-service, in-person advisory firms.

Understanding Fee-Only Financial Advisor Structures

When it comes to financial advisor fees, understanding the structure is just as important as knowing the amount. In many cases, fee-only advisors operating under a fiduciary standard offer a straightforward and transparent pricing model.

Fee-only advisors typically charge an all-inclusive fixed percentage of assets under management (AUM). This model means there are no additional charges for handling situational financial questions or providing ongoing advice as financial needs arise. Collaboration with other professionals, such as estate attorneys, accountants, or insurance representatives, is often included as part of this comprehensive service.

The key benefit of this approach is simplicity: one consistent fee structure covering a wide range of financial planning and advisory services, without hidden costs or unexpected additional charges.

The Full Truth About What Your Financial Advisor Costs

The preceding discussion has focused primarily on the fees you pay your financial advisor directly. However, it is important to recognize that the total cost of working with an advisor can extend far beyond the visible fees.

Even when working with a commission-only advisor, the overall cost to the client may be significantly higher than expected, due to a variety of factors beyond the stated charges. Understanding these additional costs before choosing to hire a financial advisor can be one of the most financially prudent steps you take.

Managing investment costs is a critical component of maximizing long-term investment performance. If an advisor does not actively work to minimize hidden costs—such as fund expenses, transaction fees, or tax inefficiencies—the investment returns you see may be considerably lower than those achieved by an advisor who focuses equally on controlling costs and maximizing portfolio growth.

Ideally, clients should seek an advisor who balances both objectives: minimizing unnecessary expenses while pursuing strong investment performance.

Over time, effective cost management and strong investment performance can result in substantial differences in portfolio growth—potentially equating to hundreds of thousands, or even millions, of dollars over a lifetime.

Bottom Line

Understanding how much a financial advisor costs is critical before engaging their services. According to the Wall Street Journal, clearly identifying an advisor’s fee structure is essential to determining whether they are a good fit for your current financial circumstances. It is also important to prioritize working with an advisor who operates under a fiduciary duty, which is most commonly found among fee-only advisors.

Choosing the right advisor can make a significant difference in managing costs effectively and achieving long-term financial goals.Ready to take the next step?