How much does a financial adviser cost?
Financial adviser costs depend on their fee structure and the complexity of your advisery needs.
If you’re seeking professional financial guidance, you’re probably wondering how much a financial adviser costs. Their costs can vary greatly, so it’s important to know how financial advisers make their money.
How much does a financial adviser cost?
The costs of a financial adviser can differ greatly depending on their fee structures.
Some financial advisers charge annual assets under management (AUM) fees, which range from 0.5% to 2% on average(1). So if a financial adviser manages $20,000 of your assets and charges a 0.50% AUM fee, your financial advisery costs would be $100 a year.
Some robo-advisors like Fidelity Go charge no advisery fees until your assets reach a certain level. Others, like SoFi Automated Investing and Titan Invest, charge no fees whatsoever to automatically manage your portfolio. Robo-advisors are digital platforms that build and manage investment portfolios based on factors like your financial goals, risk tolerance and time horizon.
On the other hand, some financial planners — a type of financial adviser — may charge hourly or flat fees for tailoring financial plans that meet specific goals like budgeting, saving for emergencies and retirement planning. These depend largely on the complexity of your needs. But typical hourly fees can range from $120 to $300, while fixed plan fees can stretch from $1,000 to $3,000(2).
Our top picks for financial advisers
- Minimum investment: $50,000
- Access to: Automated investment management with human advisor support
- Portfolio construction: ETFs and mutual funds
- Lowest plan cost: $2,500 for a one-page plan
- Access to: On-demand financial advisor with a free consultation
- Flat-fee structure: Choose from 3 plan options
How do financial advisers make money?
Financial advisers may implement a variety of fee structures. Here are some examples:
- Hourly fee. Some financial advisers charge per hour of advice.
- Flat fee. An adviser may charge a fixed fee for a specific service.
- Commission-based fee. In addition to other advisery fees, some advisers charge commission-based fees tied to the products they sell or recommend.
- AUM fee. These fees are based on how much money the adviser manages for you. In general, these fees decrease as the value of your assets increases.
- Performance-based fee. Some advisers charge annual performance-based fees in addition to AUM fees if assets grow above a certain benchmark, like the S&P 500. The fee is typically based on a percentage of asset growth over the benchmark’s growth.
Typical financial adviser fees
The average financial adviser fee depends on several variables, but here’s a look into average costs depending on different fee structures.
Human adviser vs. robo-advisor
Automated advisery services, more commonly known as robo-advisors, are growing in popularity because they offer portfolio construction and management services at a fraction of the cost of a human investment adviser. Whereas a traditional financial adviser may charge you a 1% advisery fee, most robo-advisors charge an advisery fee of 0.25% or less.
The downside to automated portfolio advice and management is that they aren’t fully tailored to the individual. While a robo-advisor may offer lower fees and minimums, it can’t navigate the nuances of complex financial situations the way a human adviser could. If you’re looking for an inexpensive, hands-off investing approach, consider a robo-advisor. If you need assistance beyond portfolio management, including tax help and planning services, consider a human adviser.
What to look for in a financial adviser
When seeking professional advice, consider the following:
- Ask if they’re fiduciaries. Financial advisers who are fiduciaries are legally obligated to provide advice solely in your best interest.
- Check credentials. Look for registrations and licenses with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), especially if you’re looking for investment advice.
- Find the right type of adviser. Advisers may specialize is different areas, so find an advisor who specializes in the area where you need help. For instance, if you’re seeking a tailored financial plan, consider a certified financial planner (CFP).
Are financial advisers worth it?
If you feel you need professional guidance in managing your finances, you may want to consider a financial adviser. But be sure to ask yourself what kind of services you need and research financial advisers to understand their experience, credentials and fees.
Financial adviser costs can vary immensely depending on their fee structures and the services you seek. Compare different fees against your needs to see which adviser is right for you.
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Frequently asked questions
How much does a Fidelity financial adviser cost?
Fidelity offers several advisery services, including its digital advisery services, Fidelity Go and Fidelity Managed FidFolios, as well as a phone-based adviser and a dedicated adviser. The Fidelity Go robo-advisor charges an advisery fee ranging from 0% to 35%, depending on account size, while Fidelity Managed FidFolios comes with a 0.70% advisery fee. The advisery fee for Fidelity’s wealth management services ranges from 0.50% to 1.50%, while its private wealth management services come with a 0.20% to 1.04% advisery fee.
What is the typical fee for a financial adviser?
Financial adviser fees vary depending on fee structures. For example, the typical AUM fee ranges from 0.5% to 2%, and a financial planning hourly fee usually ranges from $120 to $300.
Is it worth paying a financial adviser?
If you need professional guidance in managing your finances and you find one that can help you reach your goals, the fee could be worth it.
How much money should you have to see a financial adviser?
You may consider a financial adviser if you have at least $50,000 in investable assets. But even people with far less can find a financial adviser and fee structure that meets their needs.(4)
How much do financial advisers charge?
Many financial advisers charge fees as a percentage of AUM, which typically ranges from 0.5% to 2%. But fees can vary greatly depending on fee structure and the services you need.
- “Average Fees for Financial Advisors in 2023,” Harness Wealth, May 25, 2023
- “Mutual Fund Fees and Expenses,” US Securities and Exchange Commission
- “How Much Does A Financial Advisor Cost – 3 Fees To Know,” Pillar Wealth Management
- “How Much Money Should You Have to Hire a Financial Advisor?” Delta Wealth Advisors, July 19, 2022
- “Why Fidelity,” Fidelity
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