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How Much Does a Financial Advisor Cost?

Digital services (robo-advisors) offer the lowest fees. Human advisors have varying approaches, such as $1,000-$3,000 for a basic plan or $200-$400 per hour.
July 20, 2018
Advisors, Investing
How Much Does a Financial Advisor Cost?
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We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

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 financial advisor fees into your decision.

Digital advisors cost less

Robo-advisors — digital services that help you choose and manage investments — usually state costs on their websites. The annual fee is typically between 0.25% and 0.89% of your balance. These computer-based services offer easy-to-use features and advice, and you don’t need a lot of money to get started.

Human financial advisor fees can be harder to find out and run as high as 2% of your balance. Most advisors don’t list pricing on their websites. You’ll need to ask about fee structure and make sure you understand what’s included.

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

» Interested in a digital advisor? See our picks for the best robo-advisors

» Not sure yet? Learn more about how to choose a financial advisor.

Want to understand the cost before you sign up? Let’s look at a common fee structure used by both robo-advisors and humans, then examine other ways human advisors may get paid.

Robos and humans both use percentage of assets

Typical cost: 0.25% to 0.89% of your balance per year for a robo-advisor; a median of 1% per year for a human financial advisor, with costs often higher for small accounts and dropping as your balance goes up.

Robo-advisors and many human advisors charge based on your assets under management — in other words, how much money they oversee for you.

Some human advisors don’t think the fee they’d collect on a small balance is worth their time, and many won’t take on clients with less than $250,000. If you have less than that, consider a robo-advisor. These services use computers to build and manage your portfolio, which lowers the cost.

Say you have $500,000 in investment accounts:

  • A human advisor charging a 1% AUM fee would cost you $5,000 a year.
  • A robo-advisor charging 0.25% would cost $1,250 a year.

Another advantage: Most robos have low or no account minimums, so you can get started at much lower investment amounts. And most offer the option to communicate with a human when you have questions.

You may want to get started with a robo-advisor now, so you’re not missing out on stock market returns, and then use a human advisor later for comprehensive planning.

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

Other fee structures humans might use

Human advisors who charge the kind of AUM fee outlined above may only manage your investments. If you want comprehensive financial planning — like how much to save for retirement, how to juggle competing goals or whether you have the right insurance — seek an advisor who offers comprehensive financial planning services.

Beyond AUM, here are other fee structures a human financial advisor might use and how they work:

Retainer for services

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

How it works: For an annual or monthly retainer, an advisor does comprehensive planning. That typically means creating a financial plan, helping you implement it, monitoring progress and adjusting as needed. The cost usually isn’t linked to how much you have available to invest, but you may pay more if your situation is complex.

The ongoing oversight can help if you have trouble sticking to a plan or need help changing behavior.

Hourly rate

Typical charge: $200 to $400 an hour.

How it works: The advisor has a set hourly rate, which doesn’t change based on your asset level. You only pay for what you need.

This offers flexibility: You can pay for a few meetings to check your retirement savings progress, plan for the kids’ college or get a workable budget. Or, if you want a full financial plan, you can get that. You carry out the plan on your own.

Flat fee

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

How it works: Some advisor have a set fee for each type of service. You’ll get an outline of what’s included and see the fee upfront. You won’t get ongoing management, though; you carry out the plan yourself.


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

How it works: Sometimes advisors are paid through commissions on the investments they recommend (and those commissions come out of your pocket).

Note: While some commission-based advisors undoubtedly put your needs first, others may be swayed by what product pays the highest commission. And the advisor may only be required to recommend investments that are “suitable” for you, not necessarily the best fit.

» Want more help? See our guide to finding the best financial advisor for you.

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 the services entail. Ask plenty of questions, and know these terms:

  • A fee-only advisor doesn’t earn any commissions from investments. These advisors face the fewest conflicts of interest when offering advice. 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.
  • A fee-based advisor charges a fee but may also accept commissions from investments. Many advisors combine commissions with an AUM fee.
  • A commission-only advisor earns his or her income from commissions on the investments bought and sold on your behalf.

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