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How Much Does a Financial Advisor Cost?

Digital services called robo-advisors offer the lowest fees. Human advisors cost more and may charge a percentage, retainer, hourly rate or flat fee, or earn a commission.
Advisors, Investing
how much does a financial advisor cost

When you’re ready to create a financial plan or refocus one that’s grown dated, a big hurdle is choosing a financial advisor to help. It makes sense to factor cost into your decision.

Bottom line: Digital advisors cost less

Robo-advisors — digital services that help you choose and manage investments — usually state costs on their websites. The typical fee range is between 0.25% and 0.89%. These computer-based services, with easy-to-use features and powerful advice, have become widely popular.

Human financial advisor fees can be more difficult to find out and can be as much as 2% of your assets. Most advisors don’t list pricing on their websites, and even the organizations that support them, like the Financial Planning Association and the National Association of Personal Financial Advisors, don’t collect data on average fees.

Digital Advisors
Human Advisors
Fees: 0.25% to 0.89%
Fees: 1% to 2%
  • Provide investment guidance and portfolio management
  • Many offer access to human advisors when you have questions
  • Good for those starting out or when your situation is not complex
  • Provide investment guidance and portolio management
  • Can offer holistic financial advice on topics like estate planning
  • Good for those with more-complex situations and/or established wealth ($250,000+)

» Unsure what kind of financial advice you need? Learn more about how to choose a financial advisor.

Let’s start with a common fee structure used by both robo-advisors and humans, before digging into other ways human advisors may get paid.

The percentage of assets approach

Typical cost: 1% to 2% per year for a human financial advisor; 0.25% to 0.89% per year for a robo-advisor.

Many advisors calculate their fee based on your assets under management — in other words, how much money the advisor manages on your behalf.

Say you have $500,000 in investment accounts. If the advisor charges a 1% AUM fee, you’ll pay $5,000 a year for the management of those accounts.

This fee structure is one reason financial advice often seems geared toward the wealthy. Some human advisors who charge based on assets managed don’t think the fee they’d collect on a small balance is worth their time, and many won’t take on clients with assets of less than $250,000.

If you have less than that, consider a robo-advisor. These services use computers to build and manage client portfolios, which lowers the cost of investment management. The same $500,000 invested would cost $1,250 a year at a robo-advisor charging 0.25%. However, most offer low or no account minimums so you can get started at much lower investment amounts.

Most robo-advisors offer a hybrid model, where you have the option to communicate with a human when you have questions. If you’d like more help finding the right advisor for you, check out our guide to the best financial advisors.

» See NerdWallet’s picks for the best robo-advisors

Fee structures specific to human financial advisors

Some human advisors who charge the kind of AUM fee outlined above manage only your investments; they may not provide comprehensive financial planning services.

If you want holistic advice — guidance on things like how much to save for retirement, how to allocate your money among competing goals or whether you have appropriate insurance coverage — seek a human advisor who also offers financial planning services, rather than investment management only.

Other fee structures include:

Retainer for services

Typical charge: Between $2,000 and $7,500 a year.

One common way to charge for holistic planning is an annual or monthly retainer. For that fee, the advisor typically will create a financial plan for you, help you implement it, monitor your progress and adjust things as needed. If you have trouble sticking to a plan or need help changing your behaviors, a retainer model may be for you because it provides ongoing oversight.

The cost of the retainer typically isn’t linked to how much you have available to invest. However, you may pay more if your financial situation is complex.

Hourly rate

Typical charge: $200 to $400 an hour.

Some advisors simply set their rates by the hour.

Many of them are organized under a group called the Garrett Planning Network, whose mission is to make financial planning accessible. Think of this like a la carte financial planning: You pay for only what you need, at an hourly rate that doesn’t change based on your asset level.

That offers flexibility: If you don’t need comprehensive guidance, you can pay an advisor for a few meetings to check in on your retirement savings progress, figure out the best way to plan for college or get a workable budget. If you do want a full financial plan, you can get that as well.

Flat fee

Typical charge: The cost will vary by service provided, but $1,000 to $3,000 is typical for a financial plan.

If you’d rather not pay hourly but still want to pay for a specific service — say, a breakdown of how much money you’ll need for retirement and a strategy for accumulating it — you may want an advisor who charges a flat fee.

You’ll get an outline of the services to be provided upfront, along with the fee you’ll pay for those services. What you won’t get is ongoing management or involvement from the advisor. If you don’t need that, this can be an inexpensive option. As with the hourly model, once the services are rendered, it’s up to you to carry the plan out.


Typical charge: Varies by investment, but mutual fund sales loads typically fall between 3% and 6% of your investment in the fund.

On the surface, commission-based advisors can appear to be the least expensive. They’re paid through commissions on the investments they recommend to you.

But while some commission-based advisors undoubtedly put your needs first, others are swayed by which investments pay the highest commission. A commission-based advisor may only be required to make sure an investment he or she recommends is “suitable,” which doesn’t necessarily mean it’s the best fit for you.

And unlike when you’re buying a car, the commission for an investment bought or sold comes out of your pocket.

Why fee structure matters

If you choose a human advisor, be sure you understand how he or she earns money, exactly how much you’ll pay for services and what those services entail. Know these terms:

  • A fee-based advisor charges a fee but may also accept commissions from investments. Many advisors combine commissions with an AUM fee.
  • A fee-only advisor doesn’t earn any commissions from investments. He or she may still piece together more than one fee type — for example, charging an AUM fee for investment management and a flat fee for financial planning — but commissions are off the table.
  • A commission-only advisor earns his or her income from commissions on the investments bought and sold on your behalf.

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