How much does a financial advisor cost?
Learn about financial advisor fees and how getting financial advice can save you money if you find the right advisor. If you’re ready to connect with a financial advisor, answer a few questions below, and we can match you with an advisor who meets your needs.
Summary
Financial advisor fees vary from advisor to advisor and firm to firm.
The four main types of financial advisor fee structures are hourly, commission, fixed, and percentage of assets.
You can find free financial advice, but paid services always produce higher-quality results.
Unbiased makes it easy to find an SEC-regulated financial advisor best suited to your needs.
What are the different financial advisor fees?
Financial advisor fees vary depending on a range of factors.
Skill, service specialization, experience level, and whether or not the advisor in question operates independently or as part of a smaller or larger firm are some of the primary factors to consider.
There are also several different fee structures to consider, four of the most popular ones being:
Hourly fee: Hourly fees are billed per hour of active service provision.
Commission: Some financial advisors earn a percentage-based income from the commission they receive on specific products, packages, or mutual funds they offer. For every service sold to a client, the advisor receives a percentage cut.
Fixed fee: Many financial advisors prefer a once-off, upfront payment in exchange for specific service packages or offerings.
Percentage of assets: Sometimes referred to as assets under management (AUM) rates, a percentage of assets fee structure entails a financial advisor charging clients a percentage of the client’s total asset value.
What can I expect to pay for financial advice?
The amount of money you can expect to pay for financial advice depends entirely on which payment structure the advisor you are working with adheres to.
Hourly fees typically range between $120 and $300 per hour, while fixed fees can be anywhere between $7,500 and $55,000 per service.
AUM percentages generally sit at 2-5% of a client’s total asset value. However, the greater the asset’s value, the lower the fee tends to be.
Commission-based financial advisor fees tend to have the broadest range, with advisors charging between 1 and 10% of the product or service they provide.
How do I find out how much an advisor charges?
Finding out how much financial advisor fees are is rarely as simple as looking at their website.
Financial advisor fees are not copy-paste, as everyone’s needs and goals differ, and advisors are well aware of this.
While some firms offer transparent standardized fee structures that can be accessed via their website or online communication platform, in many cases, you will need to meet with a financial advisor for a consultation to determine their rates based on your needs.
Is it worth hiring a financial advisor?
Hiring a financial advisor comes with numerous short and long-term benefits.
It’s especially worthwhile hiring a financial advisor when you're navigating complex financial decisions, such as retirement planning, investment strategies, or tax optimization. They can save time, provide expert guidance, and ensure you make the best possible decisions.
Working with a financial advisor also ensures that you become better educated about financial management, which will empower you to make informed decisions in the future.
Additionally, financial advisors provide you with peace of mind by offering a structured, long-term plan for financial security.
How can financial advice save you money?
A recent study by the World Economic Forum found that access to financial advisory services helps the average US household save as much as 7.5% of their annual income each year.
While upfront financial advisor costs can be high, the ROI on the services clients receive in exchange is also high.
Receiving professional financial advice reduces the chance of making expensive errors.
Plus, it can ensure that people maximize contributions to their retirement funds, invest in profitable exchange-trade securities, and avoid costly debt with high interest rates.
Can I get free financial advice?
Yes, there are some instances in which you may be able to find free financial advice. However, quality tends to come with payment.
Any free advice you receive is likely to be basic, impersonalized and of limited value potential. It is also unlikely to be tailored to your needs as it will be more generic.
Financial advisor fees are charged because the services offered in this industry are specialized and require significant skill and experience to develop.
How do I choose a financial advisor?
Fees are one of the many factors that you need to consider when choosing a financial advisor.
It is also useful to check an advisor’s credentials, ask about experience, and prepare some questions upfront that you can ask about their professional values and practices.
You can also inquire about communication methods and working relationship styles to get a clearer picture of what you will get in exchange for those financial advisor fees.
Get expert financial advice
Financial advisor costs are as varied as the services this industry offers. There are four main types of financial advisor fees: hourly, commission, fixed, and percentage-based, each with its own structures and clauses.
To find a trusted SEC-regulated financial advisor that offers services in alignment with your budgetary and individual needs, let Unbiased match you with an expert in their field.
Writer
Charlie Barton is a writer at Unbiased. He has been writing about personal finance and investing since 2017, with extensive knowledge of platforms and products. Charlie has a first-class degree from the London School of Economics.