How Much Do Financial Advisors Cost?

How much does it cost to work with a financial advisor? Let’s look at survey results showing how much advisors charge. The median hourly fee is around $250 for an experienced advisor. A financial plan might cost around $3,000, but costs are all over the board. Ultimately it depends on factors like location, expertise, level of depth, topics included, and more.

This video covers how much you might expect to pay, and we review the primary compensation models for advisors. Personally, I use a few of these options with clients, and current pricing is available on my website.

Fee-only advisors do not earn commissions. Instead, they might charge a flat fee, hourly fee, assets under management charges, or use other methods. Commission-based advisors earn a commission when you invest money or buy a financial product. Products include mutual funds, REITs, annuities, and other investment vehicles.

There are also “fee-based” advisors who might charge either commissions or fees.

It’s only worth paying an advisor’s cost if you get value from the relationship. While you’re probably smart enough to figure things out yourself, you might prefer to get guidance from a professional. Doing so can save a substantial amount of time, incorporate expertise, validate your current approach, or provide other benefits. But paying for a financial planner is not for everybody. If you don’t need the services, there’s no point in paying the costs to work with an advisor.

The best way to find an advisor’s pricing is to talk with an advisor or check their website for pricing details. It might cost less than you think, or you might quickly decide that you’re unwilling to pay the costs. Either way, you’re better informed, and you can decide how to move forward.

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Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states.
✔️ Flat-fee and hourly advice options
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CHAPTERS:
00:00 Intro
00:44 When it Makes Sense to Pay an Advisor
02:40 Two Types of Advisor Compensation
05:01 How Much Fee-Only Financial Planners Cost
06:43 Hourly Financial Planning
08:50 How Much Commission-Based Advisors Cost
10:36 Annuity Commissions

IMPORTANT:
It's impossible to cover every detail and topic in a video like this. The only thing that's certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. The Comments section contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.

[ibenglish]

You don’t just brush the surface of things which is commendable. You deserve a Subscribe just for what your content covers in detail.

[slebans]

Thank you for the excellent summary of investment/insurance product commission structures.

[IlonaJosiane]

Your videos are very useful and provide lots of information. I have received lots of help after watching this post, please continue to share this kind of information. Thank you.

[peterjames]

Thank you. This is a quality overview.

[jeanaye]

This was a very helpful video. Thank you for compiling this information!

[ttenner]

A fair method would be to let an advisor manage half of your portfolio, managing the other half yourself, payment being a percentage of the difference of returns. If advisor portfolio does better, they get paid. If your half does better, they pay you. What do you think?

[thebrickbuilder]

You forgot to mention that commissions are almost always far less than 5.75% on investments over $25, 000. Also commissions are paid just once, not annually like typical AUM fees. Paying a onetime commission, even if it was as high as 5.75%, is far less over time than paying 1% on AUM. AUM fees for the fee only guys is a far better deal for the advisor than it is for the client.

[nareshvasishth]

What about Passive investing? There was only one Peter Finch. he is not there?

[SD-coxe]

Are there any larger fee only financial advisor companies? It seems like most charge a percentage of investment fee which is an enormous rip off.

[jmntherd]

Wow, I should have been a financial advisor. $300 an hour, to tell people what "median" means.

[wolfpower]

Can I have a flat fee and not percentage.

[lseh]

When an advisor manages $ that client has in a mutual fund, does the advisor charge 1% on top of the mutual fund managers which you said charges 5% or so? Thanks.

[FrankBatistaElJibaro]

My mind is now worthless. That was complicated.

[priscillawilliams]

For a start up company can the AUM be more than 1%

[Tensquaremetreworkshop]

No financial advisor can spend the time (=charges) to gather enough information to give valid advice. They use crude measures like 'inflation' (never accurate for the individual) and 'risk apatite'. They also concentrate on the investment, not the spending (which has way more effect). Lastly, if they were really good, they would be managing their own money, not yours.