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How much do financial advisors cost?

Financial advisor fees can range from a small percentage of your portfolio to several thousand dollars per year, depending on what kind of services you need and how much you're planning to invest. Alternately, robo-advisors are a cheaper option that automate your investments using an algorithm, based on your risk profile.

How much do financial advisors costThe cost to hire a financial advisor (such as a Certified Financial Planner) can be a few thousand dollars for a comprehensive financial plan or up to 1 percent of investment balance per year if you want ongoing investment advisory services.

These fee structures apply to fiduciaries — financial advisors who have an obligation to make decisions in the best interest of their clients. (Beware of financial professionals — usually salespeople — who call themselves financial advisors but are actually not fiduciaries.)

Here’s a breakdown of what you can expect to pay when working with a financial advisor, and what to look for when shopping around for one.

How much do financial advisors cost?

Financial advisors charge for their services in different ways. Here are some of the common financial advisor fee structures you will see:

Assets under management

If you want a registered investment advisor to direct your investments personally, then you pay them a fee based on assets under management (AUM). Assets under management is the amount of money the advisor is investing on your behalf.

The average fee for this service is 1% of AUM. For example, if you have a $200,000 investment portfolio, you will pay $2,000 a year. If you have a $2 million investment portfolio, your financial advisor cost would be $20,000 per year.

Customers who are uncomfortable with managing their money may prefer this AUM model. However, it may be less expensive to figure out how to handle your investments yourself. You can hire a financial advisor to create an investment plan for you, but also learn the ins and outs of moving that money around on your own.


Many financial planners, especially those with a fiduciary duty, use an hourly fee structure. The average hourly rate is between $200 and $400.

When you meet with a financial advisor on an hourly basis, you will be billed for the total amount of hours spent with them. Some may have an hourly minimum you must reach per session, such as two hours. You may receive free or limited email support following the meeting, which depends on the planner.


Some planners offer a retainer model where you can pay a set fee and receive access to a limited amount of advice and guidance. If you do not use their services, you usually can’t roll over that time into the next year.

The cost for a retainer from a financial advisor is often between $2,000 and $7,500 annually.

Flat fees

Customers often hire financial advisors to help them create a comprehensive money plan that will include recommendations on where to invest and how much to save. If you have access to an employer-sponsored retirement account like a 401(k), they may be able to evaluate the funds available in that plan and recommend an investment strategy.

The typical cost for a project or plan is between $2,500 and $3,000. This will usually not include implementing the plan’s recommendations, which falls on the customer’s shoulders.

Annual fee

Some financial advisor fees are a flat annual amount. A financial advisor may choose to charge a flat annual fee for investment management services instead of charging by AUM. For high net-worth clients, this fee may be a better deal than paying by AUM. However, you will still end up paying several thousand dollars annually.


Most robo-advisors charge an annual fee, taken as a percentage of your invested assets. The fee will vary depending on the specific robo-advisor but is usually between 0.15% and 0.30%.

For example, Vanguard Digital Advisor only charges 0.20%, but has a $3,000 minimum investment, which is higher than most robo-advisors. On the other hand, Empower charges 0.89% for accounts worth up to $1 million for their paid wealth management services (but have a number of awesome free tools).

Acorns is one of the only robo-advisors that charges a set monthly fee no matter the amount invested — either $3, $5, or $9 depending on the tier you select.

The services robo-advisors offer differ to. Although Empower is more expensive, they offer a full suite of online financial planning services including access to a financial advisor whenever you want. Most robo-advisors have no financial planner services attached — they just manage your investment account with their algorithms.


Some financial advisors get paid when you purchase a recommended product. Advisors who work on commission will recommend investment products that come with load fees, which can range between 3% and 6%.

Even though commission-based financial advisors may seem like the least expensive upfront option, they often will not recommend the best products for you. They may suggest investments that have the highest commission fees, even if there are better options available.

Types of financial advisors

Financial planners

A financial planner takes a comprehensive approach to financial advice. Some financial advisors are Certified Financial Planners (CFP), which is one of the highest levels of certification for financial planners. Chartered Financial Consultants (ChFC) is another reputable certification.

A financial planner offers a variety of services, including:

  • Retirement planning
  • Tax planning
  • Saving for college
  • Estate planning
  • Budgeting and debt payoff

Many financial planners specialize in specific areas. For example, some may prefer to work with young families, while others help those transitioning to retirement. You’ll want to ask a financial advisor questions before you hire them including what services they do and do not offer.

A financial planner can answer most of your money-related questions, or at least be able to direct you to the appropriate resource. They can also create specific plans based on your goals.

Most financial planners can also physically manage your investments for you, choosing where to invest and how to diversify your portfolio. They may then take charge of those investments or give you a road map to follow on your own. Financial planners may be employed at a major company or work alone in private practice.

The best financial advisors will have a fiduciary duty. A fiduciary duty is a legal responsibility to recommend only the best products and investments available, rather than products and investments that may earn the financial planner a higher commission. Before you pick a financial planner, make sure that they are fiduciary.

Wealth managers or investment advisors

Many financial advisors focus exclusively on investment management or wealth management.

These financial advisors must hold licenses from the securities and exchange commission (SEC) that permit them to give investment advice. They may or may not hold other credentials, the most common being Chartered Financial Analyst (CFA).

These financial advisors typically charge a percentage of assets under management. And while they can be an excellent partner in helping you achieve your investing goals, they may not be the place to turn if you need help paying down debt or getting your spending in order.


Rather than human recommendations, the best robo-advisors use algorithms to determine how you should invest. When you open an account with a robo-advisor, the system will ask you a series of basic questions about your age, income, family size, and desired retirement age. You will also have to provide a list of your current assets and liabilities.

It will then use that information to determine where and how much you should invest. You can set up automatic transfers from your bank account to the robo-advisor, which will invest that money for you.

Robo-advisors have fewer fees than personal financial planners, so it can be easier to get started. If you can’t afford the high fees associated with a personal financial planner, a robo-advisor may be a better fit.

Some robo-advisors may also offer access to qualified financial planners so you can ask specific questions and get a customized, human answer. Note that you may have to meet certain investment thresholds to use one of these services, and you often have to pay a separate fee. For example, Empower (formerly Personal Capital) only offers financial planning services to those with at least $100,000 in investable assets.

Financial advisor fees FAQ

Is a fiduciary better than a financial advisor?

A fiduciary is someone with a legal and/or ethical duty to make the best financial decisions for their clients. Most financial advisors are fiduciaries.

Examples of non-fiduciary financial professionals include bankers, insurance salespeople, and stockbrokers. Although these professionals must follow rules and regulations, they may be motivated to sell you financial products that earn them the biggest commission regardless of whether it’s a smart product for you.

How do fiduciaries make their money?

For fiduciary financial advisors, earning a commission on mutual funds or other investments creates a conflict of interest.

In general, a fiduciary can’t profit from recommending a particular investment — or any kind of financial product. So fiduciaries must work on a fee only basis. This is why you’ll hear the term ‘fee only advisors’. A fee only advisor is simply someone who charges advisory fees and does not earn commissions or other revenue by selling investments or financial products.

What is a typical fee for a financial planner?

Average financial advisor fees range between $2,500 and $5,000 for a comprehensive financial plan. The average advisory fees for registered investment advisors is 1% of assets under management (AUM).

Is there a difference between a financial advisor and a financial planner?

All financial planners are financial advisors, but not all financial advisors are necessarily financial planners.

Many financial advisors choose to become Certified Financial Planners. The Certified Financial Planner (CFP) credential is awarded by the Certified Financial Planner Board after an advisor has proven they have the required education and experience and passed a comprehensive exam. A Chartered Financial Consultant (ChFC) is another professional credential you’ll come across.

An investment adviser may not have the CFP or ChFC designation because they focus entire on investment strategies and portfolio management and less on financial guidance.

A financial planner can usually help with all aspects of your financial life — including debt, insurance, and budgeting. They tend to all be fee based advisor. Some can also management your investment portfolios for you whereas others will only make investment recommendations and it will be up to you to executive that plan.

Are financial advisors worth 1%?

That’s a good question that, ultimately, only you can answer. While a 1% annual fee may not seem like a lot if you have a couple hundred thousand dollars invested, the math changes when you’re dealing with millions of dollars.

Arguably, a financial advisor’s workload doesn’t change all that much whether you have $500,000 or $5 million invested, yet they’ll earn 10x the fee. Some advisors may offer a sliding fee structure as your portfolio grows, others don’t. At the end of the day, you have to ask yourself what’s a fair price to pay to not have to worry about your own investment account.


You can expect to pay anywhere from $1,000 to $7,500 (or more) a year for the services of a financial planner. The specific fee will depend on how you want to receive advice, how much money you have invested, and the type of financial planner you choose. Given the costs involved, think carefully about whether it’s the right time to hire a financial advisor.

If you are comfortable managing your investments yourself, you may be able to save money by avoiding the fees associated with hiring a professional.

Find a financial advisor now

To begin your financial advisor search, if you have at least $100,000 in investments or money to invest, I recommend starting with Paladin Research and Registry. The service is completely free to use, and there’s no obligation to work with the financial advisors they recommend.

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