How Much Does a Financial Advisor Cost?

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If you’re seeking professional financial guidance, you’re probably wondering how much a financial advisor costs. Their costs can vary greatly, so it’s important to know how financial advisors make their money.

How much does a financial advisor cost?

The costs of a financial advisor can differ greatly depending on their fee structures.

Some financial advisors charge annual assets under management (AUM) fees, which range from 0.5% to 2% on average⁽¹⁾. So if a financial advisor manages $20,000 of your assets and charges a 0.50% AUM fee, your financial advisory costs would be $100 a year.

Of course, most people working with a financial advisor have more than $20,000 invested. Here’s what a 1% AUM fee looks like at more typical portfolio sizes:

• $100,000 portfolio: $1,000 a year
• $250,000 portfolio: $2,500 a year
• $500,000 portfolio: $5,000 a year
• $1 million portfolio: $10,000 a year

Keep in mind that many advisors lower their AUM percentage as your balance grows. It’s common to see a tiered structure — for example, 1% on the first $1 million, then 0.75% on the next million, and so on. If you’re shopping around, ask for the full fee schedule, not just the headline rate.

Financial planners — a type of financial advisor — often charge differently. Many bill hourly or by flat fee 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⁾.

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How do financial advisors make money?

Financial advisors may implement a variety of fee structures. Here are some examples:

• Hourly fee. Some financial advisors charge per hour of advice.
• Flat fee. An advisor may charge a fixed fee for a specific service.
• Commission-based fee. In addition to other advisory fees, some advisors charge commission-based fees tied to the products they sell or recommend.
• AUM fee. These fees are based on how much money the advisor manages for you. In general, these fees decrease as the value of your assets increases.
• Performance-based fee. Some advisors 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 advisor fees

The average financial advisor fee depends on several variables, but here’s a look into average costs depending on different fee structures.

Fee type	Typical cost
AUM	0.5%—2%
Hourly fee	$120—$300
Fixed fee	$1,000—$3,000
Commissions	3%–6%(3)

Watch for fees beyond the advisor’s fee

The advisory fee isn’t always the whole story. Depending on how your portfolio is built, you may also be paying:

• Fund expense ratios. If your advisor invests your money in mutual funds or ETFs, those funds charge their own annual fees — typically 0.03% to 1% of assets — on top of what your advisor charges.
• Trading costs and account fees. Some custodians charge for trades, wire transfers or account maintenance.
• Product commissions. If your advisor earns commissions on insurance products or certain funds they recommend, that’s a cost too — even if it’s not coming out of your pocket directly.

Before signing on, ask for an all-in estimate of what you’ll pay each year. A 1% advisory fee can quietly become 1.5% or more once fund expenses and other costs are layered in.

Human advisor vs. robo-advisor

Automated advisory 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 advisor. Whereas a traditional financial advisor may charge you a 1% advisory fee, most robo-advisors charge an advisory fee of 0.25% or less.

Some robo-advisors like Fidelity Go charge no advisory 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.

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 advisor 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 advisor.

Dive deeper: Robo-advisors vs financial advisors: How they compare

What to look for in a financial advisor

When seeking professional advice, consider the following:

• Ask if they’re fiduciaries. Financial advisors 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 advisor. advisors 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 advisors worth it?

If you feel you need professional guidance in managing your finances, you may want to consider a financial advisor. But be sure to ask yourself what kind of services you need and research financial advisors to understand their experience, credentials and fees.

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Bottom line

Financial advisor costs range from 0.25% with a robo-advisor to 2% or more with a full-service human advisor, depending on what you need. Compare fees, minimums and services side by side to find the right fit — start with our picks for the best financial advisors.

Frequently asked questions

• How much money should you have to see a financial advisor?

  It depends on the advisor. Robo-advisors often have no minimum, while traditional human advisors typically want at least $100,000 in investable assets — and some firms require $1 million or more. If you're below those thresholds, a fee-only planner who charges hourly or flat rates is a more accessible option.⁽⁴⁾

• What's the difference between a fee-only and fee-based advisor?

  Fee-only advisors are paid solely by their clients and don't earn commissions on products they recommend. Fee-based advisors charge client fees but can also earn commissions, which can create conflicts of interest.

• Can you negotiate financial advisor fees?

  Sometimes. AUM fees and flat planning fees are often negotiable, especially if you have significant assets to bring over. It never hurts to ask about tiered rates or first-year fee waivers.