How Much Does a Financial Advisor Cost?
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
What a financial advisor costs depends on the fee structure they use with their clients. Advisors who charge flat fees can cost between $2,500 and $9,200 a year, depending on the service, according to a 2024 survey of financial advisor firms by Kitces.com. There are some financial advisors who charge hourly, or charge a one-time fee for a complete financial plan you can then follow on your own.
Many financial advisors use a fee structure called an AUM fee, or a percentage of assets under management. That fee is most commonly 1% per year, though there are plenty of services that charge substantially less.
The actual cost of an advisor's AUM fee will depend on your assets: For example, a client who invests $10,000 with an advisor who charges a 0.50% management fee will pay $50 a year, while a client who has $100,000 invested will pay $500.
Nerdy takeaways 💡
Financial advisors may offer several different cost-structures, including annual AUM fees, a flat annual or monthly fee, an hourly rate, a one-time financial plan fee, or, for some advisors, commissions.
AUM fees are typically 1% but range widely between providers. Retainers typically cost $2,500 to $9,200 annually. Hourly rates range from $200 to $400, and one-time plans often cost about $3,000. Commissions may be 3% to 6% of an investment.
It's important to understand the incentives created by different cost structures. Commission-based advisors may be under pressure to generate commissions, and may not give advice that is in your best interest.
Financial advisor fees
An overview of typical financial advisor fee ranges is below. Keep in mind that advisor fees can vary widely depending on the level of service provided, your geographic area and other factors.
Fee type | Typical cost |
|---|---|
Assets under management (AUM) | 0.25% to 0.50% annually for a robo-advisor; about 1% for a financial advisor. |
Flat annual fee (retainer) | Typically $2,500 to $9,200. |
Hourly fee | $200 to $400. |
Per-plan fee | Typically $3,000, but the cost will vary by service. |
Commission | 3% to 6% of investment transaction amount. |
According to the 2024 State of Financial Planning and Fees study from Envestnet, a company that develops software for the wealth management industry, these were the average financial advisor fees last year:
Fixed-percentage fee for a human advisor: 1.05%.
Annual retainer: $4,484.
Hourly rate: $268.
Per-plan fee: $2,554.
Monthly subscription fee: $215 .
The 2024 Kitces.com survey found typical costs to be:
Fixed-percentage fee for a human advisor: 1% on balances up to $1 million.
Annual retainer: $4,500.
Hourly rate: $300.
Per-plan fee: $3,000.
» Want to know how fees will impact your returns? Run the numbers in our financial advisor fee calculator.
Financial advisor fees by service
Financial advice comes in many shapes and sizes. In some cases, the cost of service will depend on the type of service you choose.
Investment management only
If you’re specifically interested in investment management, a robo-advisor may be your best low-cost choice. Robo-advisors are computer-based services that help you choose and manage investments. They will build and manage an investment portfolio for you based on your goals, time frame and risk tolerance. Robo-advisors often require no or a low account minimum, so it's easy for beginners to start investing.
Cost: Robo-advisors typically charge an AUM fee of 0.25% to 0.50%, which works out to $125 to $250 a year on a $50,000 account balance.
What you get for that fee: Portfolios are built and monitored with computer algorithms. Robo-advisors generally don't provide customized financial plans or personalized investment advice, but many do offer online planning tools and calculators.
» Check out our roundup of the best robo-advisors
Financial advice plus investment management
The rate you pay (and the fee structure) varies between financial advisors. It’s often related to the level of service you’re looking for. Here are some of the most common, and what you typically get for that fee.
Keep in mind that "financial advisor" is a broad term, and it includes varying credentials, such as investment advisors. We recommend working with a CFP due to their deep expertise.
AUM fee
This is the same AUM model that robo-advisors use. For those that do, it’s common to see required account minimums. Some advisors don’t think the fee they would collect on a small balance is worth their time and won’t take on clients with less than $250,000. Still, there are numerous options with lower or no account minimums.
Cost: The median AUM fee among human advisors is about 1% of assets managed per year, though they can be as low as 0.30%. It’s also common to see AUM fees reduced as investment balances increase.
What you get for that fee: You'll typically have an ongoing relationship with a team of advisors or a dedicated advisor.
» Check out our roundup of the best financial advisors.
Retainer for services
A set monthly or annual fee. The cost usually isn’t linked to how much you have available to invest, but you may pay more if your situation is complex.
Cost: From $2,500 to $9,200 a year.
What you get for that fee: Typically, comprehensive planning and investment management: The advisor will create a financial plan, help you implement it, monitor your progress and adjust as needed.
Hourly rate
Some financial planners have a set hourly rate, which doesn’t change based on your asset level. You only pay for the time you need.
Cost: $200 to $400 an hour.
What you get for that fee: You can schedule 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 and there is no ongoing oversight from the provider unless you request and pay for additional time.
Flat fee per plan
Some advisors charge a flat fee for creating a financial plan. There is no ongoing management or oversight; you carry out the plan yourself.
Cost: The cost will vary by service, but $3,000 is typical for a financial plan.
What you get for that fee: A comprehensive financial plan and guidance for how to follow it, but no ongoing services or investment management. The advisor charges a set fee for each type of service. You’ll get an outline of what's included and see the fee upfront.
Commission
Sometimes advisors are paid through commissions on the investments they recommend (and those commissions come out of your pocket).
Cost: Varies by investment, but mutual fund sales loads generally fall between 3% and 6% of your investment. This is a one-time fee paid at the purchase or sale of the fund.
What you get for that fee: Typically, only investment management. We often recommend avoiding commission-based financial advisors: While some undoubtedly put your needs first, others may be swayed by the product that pays the highest commission. And the advisor may only be required to recommend investments that are suitable for you, but not necessarily the best fit.
» Ready to act? See our guide on how to choose a financial advisor.
Why a financial advisor's fee structure matters
No matter which type of financial planning service you choose, be sure to understand exactly how much you'll pay for services and what the services entail. That's especially important because there are so many different payment structures used. Before hiring an advisor, 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. They 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 their income from commissions on the investments bought and sold on your behalf.
Bottom line: What is the normal cost for a financial advisor?
Unfortunately, there is no "normal" fee that financial advisors typically charge. Because of the variety of fee structures and certifications used by financial advisors, the wide range of services advisors offer and geographical disparities in pricing, it can be difficult to know how much you should pay for financial advice. For example, a financial coach may offer fewer services than a CFP, but they likely won't charge as much.
The ranges in pricing can feel severe, but remember that you're only looking for what suits your needs. If you're after basic investment management of a relatively small account, a flat fee of $2,500 a year is likely too much. On the other hand, if you have six figures to manage, working with the cheapest advisor you can find may mean you won't receive the depth of financial advice you need.
Thankfully, just as there is wide variance in how much a financial advisor costs, there are plenty of options to choose from.
Related articles
ON THIS PAGE
ON THIS PAGE