How much does financial advising cost?

Based on real quotes from businesses in United States.

$125

TYPICAL

$200

$400

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Yelp calculates estimated costs by gathering and analyzing real quotes provided to consumers by businesses on Yelp. Actual costs may vary.

Key takeaways

Many financial advisors charge an annual fee based on a percentage of your portfolio’s value
Other advisors charge a yearly flat rate for ongoing help
If you just need to set up a financial plan, you can hire an advisor for an hourly charge or one-time fee

It can be challenging to take care of your money and work toward your financial goals. Not everyone has the time and resources to become an investment expert.

That’s why it’s important to have a strategy for managing your personal finances. Whether you’re planning for retirement, paying off your house, getting married and having kids—or simply want to increase your net worth—a financial advisor can help.

There are many reasons to seek out financial-advice services. You may need a one-time consultation to create a financial plan or get your investments organized. Or you may need ongoing advice and money-management help if you have significant assets or complicated finances.

Financial advisors will typically provide expertise in a variety of areas, including:

Tax planning
Estate planning
Portfolio management
Investment advice/implementation
Retirement planning
Saving for children’s college
Cash flow review
Debt management

In this guide, you’ll learn about the typical costs of hiring a professional financial advisor.

Total cost of financial advising

If you hire a financial advisor for ongoing investment-management services and help making financial decisions, they’ll typically charge an annual fee equivalent to a small percentage of the funds you’ve entrusted to their care. The average amount is 1% AUM (assets under management) per year, depending on the size of your portfolio and type of services you require.

Cost of financial advising by fee structure

The way financial-advisory firms calculate their costs can vary, depending on the type and amount of help you need. Here are the most common fee structures:

Assets under management (AUM). As noted above, an AUM fee structure means you’re charged a percentage of your total account balance each year. It’s favored by people who have large investment portfolios and need ongoing wealth-management services. For example, if the AUM is 1%, the fee for a $250,000 account would be $2,500 per year. The AUM percentage is often slightly higher for smaller balances, and lower for high balances.

Average fee: 0.65–1.25% per year

Flat annual fee (retainer). With a retainer fee structure, you’re charged a yearly (or sometimes monthly) flat fee for financial planning services. For this price, a financial advisor will help you formulate and implement a financial plan and investment strategy, and monitor your progress over time.

Average fee: $2,000–7,500 per year ( more if your assets are above $500,000)

Hourly fee. Some financial advisors will charge an hourly rate for limited services. Usually, this involves meeting with a professional to create a plan or check on your progress. The difference is, you’re responsible for carrying out that plan—and there’s no ongoing management from your financial advisor unless you pay for additional time.

Average fee: $200–400 per hour

Per-plan fee. Some financial advisors will charge a one-time flat fee to provide a comprehensive financial plan and instructions on how to follow it. This doesn’t include investment management or ongoing advisory services.

Average fee: $1,000–3,000 per plan

Commission. Other financial advisors charge a commission for investments they recommend and manage for you. This is a one-time, percentage-based fee on each transaction made, and typically only involves investment management (and not financial planning).

Average fee: 3–6% fee per transaction

Cost of financial advising by service

There are several types of financial advisors available, depending on your situation and whether you prefer in-person counseling. Here are the most common.

“Robo-advisors.” These are software services that help you choose and manage an investment portfolio using computer algorithms. They’re the cheapest option and usually have low account minimums, making them a popular choice for beginners.

Average fee: 0.25–0.50% AUM (percentage of assets under management) per year.

Online financial planning. This is similar to a robo-advisor, but with an added human element. They offer limited investment management and access to a financial planner, usually for a lower cost than a traditional in-person advisor.

Average AUM fee: 0.3–0.9% per year
Average annual flat fee: $400–2,000 per year

Traditional financial advisor. An in-person financial advisor (such as a Certified Financial Planner) will meet with you in person (or remotely) to formulate a financial plan. They can also help you choose and manage your investment portfolio, based on your assets, goals, time frame, and risk tolerance.

Average fee: See “Cost of financial advising by fee structure,” above

Cost factors

Here are some other variables that will affect the cost of a financial pro.

Additional charges. When you open an account with an investment manager or financial planner, you may be subject to a number of additional costs. Brokerage fees (for a brokerage company to execute transactions), custodial fees (charged by the institution managing an investment), management fees (charged for financial products such as mutual funds), and other third-party expenses may occur, depending on the investments you make. Be sure to talk through all potential fees with your financial advisor so you aren’t blindsided by unexpected charges.

Certifications. There are a variety of certification levels and industry credentials for financial advisors (including certified financial planners, chartered financial analysts, chartered financial consultants, registered investment advisors, and fiduciaries), which go along with different specialties, training, and cost levels. These are mostly issued by private trade associations, like the Certified Financial Planner Board of Standards (CFP board). Before hiring any potential financial advisor, it’s important to research their qualifications and determine if they fit your needs.

FAQs

What is a normal fee for a financial advisor?

There are a variety of fee structures used by financial advisory firms to determine cost. The most common is known as assets under management (AUM), meaning you’re charged an annual advisory fee based on a percentage (typically 1%) of the value of your account. Other structures are available, including annual, monthly, or hourly fees, depending on the type of financial services you require.

Is it worth paying a financial advisor 1%?

Paying 1% of your AUM (assets under management) per year entitles you to a traditional in-person financial advisor, who will meet with you, formulate a financial plan, and help you choose and manage an investment portfolio. For many people, deciding whether this is worth the money depends on how effective the advisor is at helping them reach their financial goals, and what the return on their investments is over time.

Are financial advisor fees negotiable?
It’s possible that a financial advisor will negotiate fees, especially because technological advances have reduced the expenses associated with investment planning. But this is more likely for large investors with significant investable assets. Still, multiple types of advisors are available, with different services and fee structures, so you can often save money by choosing only the level of help that meets your needs.

Find a financial advisor in your area.

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