You may have typed in any of the following challenges or questions to get to this page:
How much does a financial advisor cost?
What is a normal financial advisor fee?
Is 1% too much to pay a financial advisor?
What is a fee only financial advisor?
Are there hidden fees I'm not seeing?
Is a financial advisor worth it?
Written by Amy Parvaneh, founder and CEO of Select Advisors Institute
Excerpt and Summary:
If you have significant money and don't know where to start, one of your first questions is probably what a financial advisor costs and whether it's worth it. This article explains the common ways advisors charge, the costs that are easy to miss, and the questions to ask before you sign anything. Select Advisors Institute can help you compare fee structures across firms and make sense of the fine print. Read more about this topic.
I don't even know where to start. What should a financial advisor cost?
Is it rude to ask about fees in the first meeting?
Not rude at all. In fact, if an advisor gets uncomfortable when you ask, that tells you something.
You might have sold a home, received an inheritance, or built up savings over decades, and now it's time to get serious.
You might have been with the same advisor for years, and you just realized you don't know what you pay.
You might have a friend who pays 0.5% and another who pays 1.5%, and you have no idea who's "right."
You might simply want someone to handle it all, and you're wondering what "all" costs.
Here's the honest answer to "how much does a financial advisor cost?": it depends on how they're paid, what they actually do for you, and how much money you have.
So let's break that down.
How are financial advisors paid?
Most financial advisor fees fall into a few buckets:
A percentage of assets (often called an AUM fee). The advisor charges a percentage of the money they manage for you each year. You'll commonly see numbers somewhere around 0.5% to 1%, often lower as your assets grow. On $2 million, a 1% fee is about $20,000 a year.
A flat or fixed fee. A flat fee financial advisor charges a set annual retainer, regardless of your asset size. This can be appealing if you have a lot of money and want a predictable bill.
Hourly or project fees. You pay for a financial plan or a few hours of advice, then you carry it out yourself.
Commissions. The advisor is paid by the companies whose products they sell, like certain insurance policies, annuities or funds. This can create conflicts of interest, because the advisor may earn more if you buy one product over another.
One more thing people don't always realize: a percentage fee grows as your money grows. That can be a nice alignment (when you do well, they do well). It can also mean you're paying quite a bit more in year ten than in year one for roughly the same service. Neither is right or wrong. It's just worth understanding before you sign, so the bill never comes as a surprise.
Many advisors use a mix. That's why the question isn't just "what's your fee?" It's "how exactly do you get paid?"
[read about the cost of financial advisors]
What's a fee only financial advisor? Isn't that everyone?
Nope. And the names are confusing on purpose (or at least it feels that way).
A fee only financial advisor is paid only by you, the client. No commissions from product companies.
A fee based advisor sounds almost identical...but can charge you a fee and earn commissions on products.
Then there's the fiduciary vs financial advisor question. A fiduciary is required to act in your best interest. "Financial advisor" on its own is a pretty loose title, and not everyone using it is held to that same standard at all times.
When I was at Goldman Sachs Private Wealth Management and later PIMCO, I saw up close how pricing really works inside large firms, including how fees are layered and how much room there often is to discuss them. That insider view is exactly why I tell people: always ask, and always get it in writing.
[read: big brokerage firms vs RIA advisors, pros and cons]
Are there hidden financial advisor fees I'm not seeing?
My statement says 1%. Is that really all I'm paying?
Maybe. Maybe not.
The advisory fee is the one you see. But there can be other layers underneath, like:
Fund expenses. The mutual funds or ETFs in your account have their own internal costs.
Outside manager fees. If your advisor hires other investment managers, they may charge separately.
Trading and platform costs. Some accounts carry custody, trading or "wrap" fees.
Product costs. Annuities and certain insurance products can have their own fees and surrender charges.
None of this is automatically bad. Some of these costs pay for real work. The problem is when you don't know they're there.
Examples of follow up questions from you can include:
"What is my total all in cost, in dollars, for last year?"
"Do you or your firm earn anything from the products in my account?"
"Do you have breakpoints, so the fee drops as my assets grow?"
"Is your fee negotiable?" (You'd be surprised how often it is.)
Is a financial advisor worth it?
For many people with significant money and a lot going on, yes. But only if you're getting real value for what you pay.
A good advisor may do much more than pick investments:
Build a plan for retirement, giving and the next generation.
Coordinate with your CPA and estate attorney.
Help you avoid the expensive emotional decisions (selling everything in a panic, or buying the "hot tip").
Explain things in plain English, and call you back.
If all you get is a quarterly report and a holiday card, that 1% is a lot of money.
If you get a thoughtful partner who keeps your whole financial life organized, it may feel like a bargain.
Bottom line: the cheapest advisor isn't always the best deal, and the most expensive isn't always the best advisor. What matters is what you get for the fee, and whether their incentives line up with yours.
How do I compare advisors' fees side by side?
This is where most people get stuck. Every firm presents its pricing differently, so comparing them can feel like comparing apples to...a fruit salad.
A few tips:
Ask every advisor for their fee in writing, including all the layers above.
Convert everything to dollars per year. Percentages hide how big the number really is.
List what's included. Tax planning? Estate coordination? Bill pay? Meetings with your kids?
Compare at least two or three firms before you decide.
[read: how to write a financial advisor RFP without giving up control]
The list of questions goes on and on!
And that's exactly where Select Advisors can come in and help!
Don't go through the process of finding or changing a financial advisor alone. We can help!
How can Select Advisors Institute help me understand what a financial advisor should cost?
At Select Advisors Institute, we do not manage investments or provide financial advice. Instead, we offer strategic support to help you navigate the complexities of wealth management, ensuring that your financial relationships are structured to serve your best interests. By providing these services, we help you maintain control over your financial decisions, ensuring that your wealth management strategy aligns with your unique needs and objectives.
We'd love to speak with you about your goals, answer some of your top questions about the financial industry, and/or refer you to some of my favorite financial advisors in this space that may match your exact needs.
If you have significant money but don't know where to start, you face unique challenges. Fee structures are often layered, hard to compare, and explained in jargon, which makes it easy to overpay or to choose an advisor whose incentives don't match yours. Getting this right means understanding exactly how each advisor is paid and what you actually receive for the fee.
We provide comprehensive support by assisting in the organization and management of your financial advisor evaluation process. Our services include helping you define your financial needs and priorities before engaging professionals, drafting or reviewing RFPs for advisory and planning services, and building comparison frameworks across firms, services, and compensation models. We also track communications during advisor meetings to identify gaps or follow-ups, ensuring that you have all the necessary information to make informed decisions.
Hi, I'm Amy Parvaneh,
Since 2014, my firm has guided 100s of financial firms and thousands of financial advisors. I have been in the financial services industry since 2001, with a successful career at Goldman Sachs Private Wealth Management and then PIMCO.
Beyond advisor selection, we assist in gathering background materials and documentation for review, help interpret fee structures and service models, and coordinate introductions to firms that meet your specific criteria. Our team reviews public disclosures, monitors advisor changes or staff turnover that may impact your relationship, and facilitates communication with your legal, tax, and family office teams. We aim to translate industry jargon into terms that align with your values, providing debrief support after advisor interviews and designing internal decision-making frameworks across stakeholders. By serving as a neutral, long-term liaison, we help monitor alignment, organize your existing team for better visibility and clarity, and support onboarding logistics for newly selected firms. Our goal is to ensure that the advisor you choose fits your actual life, not just their presentation.
https://www.linkedin.com/in/amyparvaneh/
If you have any of the below questions, it's time to call us!
How much does a financial advisor cost?
What is a normal financial advisor fee for someone with my assets?
Is a 1% advisory fee too much?
What's the difference between fee only and fee based advisors?
How do I know if my advisor earns commissions?
What is a fiduciary, and is my advisor one?
Are there hidden fees in my accounts?
How do I find out my total all in cost each year?
Can I negotiate my financial advisor's fee?
Do fees go down as my assets grow?
Is a flat fee financial advisor better for me?
What should be included in the fee I'm paying?
Am I paying separately for outside investment managers?
Is a financial advisor worth it for me?
How do I compare fees across different firms?
What questions should I ask about fees in a first meeting?
Should I switch advisors if I'm paying too much?
Are there exit fees or surrender charges if I leave?
How do I write an RFP to compare advisors?
I don't know where to start. Can you help me compare advisors?
Select Advisors Institute is not a registered investment adviser and does not provide investment, legal, or tax advice. We are a boutique management consulting firm deeply embedded in the wealth management, asset management, family office, and UHNW sectors, advising financial institutions on strategic growth, talent development, investor communication, and brand positioning, while guiding ultra-high-net-worth families in advisor selection, coordination, and the day-to-day management of complex wealth structures.
Managing the wealth of ultra high net worth investors and family offices is a highly specialized and nuanced endeavor that requires the expertise of seasoned financial advisors. The best financial advisors for UHNW clients possess specialized knowledge, a fiduciary mindset, a customized approach, a robust network, a proven track record, expertise in philanthropic planning, and a sterling reputation. By carefully considering these factors, UHNW individuals and family offices can select financial advisors who are best suited to meet their unique and intricate financial management needs.