Financial advisor fee structures vary widely — not just the fees themselves, but how they are charged. The most popular method is an annual assets under management fee, which charges a percentage of the assets the advisor manages on your behalf. Other methods include flat fees (per plan or per year), an annual retainer, hourly fees or some mix of the above.
All this variation makes it very difficult for potential clients (not to mention intrepid journalists like me) to compare costs between advisors — much less compare apples to apples. Compounding that issue is that many firms don't publish fees on their websites. Instead, they require clients to set up a call or dig deep into regulatory filings to find out the cost.
As you weigh the costs of advisors, it helps to have some benchmark figures and an understanding of all the various fee structures you might encounter. I'll cover this in detail below.
If you’re going to give someone control over your money, I think you should read this full article so you truly understand what you’re paying and what you’re paying for. You need to arm yourself with information about what to ask and how to interpret the answers. But sometimes you just want the rundown — I get it. If that’s you, here are some industry average financial advisor fees, courtesy of the 2026 State of Financial Planning Fees from Envestnet, a wealth management tech company:
- 0.96% per year is the average assets under management fee, which means the advisor charges .96% of the assets it manages on your behalf. As an example, that's $4,800 per year on a $500,000 portfolio.
- $6,815 per year is the average for flat annual fees and retainers, which means the advisor charges a flat annual rate based on factors like the complexity of your planning needs.
- $2,926 per plan is about the average fee for advisors who will create a financial plan you can then follow on your own, with no additional advisor costs or support.
- $307 per hour is the average fee among advisors who charge hourly rates.
» See our research: Our list of the best financial advisors
5 common financial advisor fee structures
1. A percentage of your assets under management (AUM fees)
Average cost: 0.96%.
A large portion of advisors calculate their fee based on your asset balance; in other words, how much money the advisor is managing on your behalf. If you have $1 million and you pay a 1% AUM fee, you’ll pay $10,000 per year. That $10,000 is often charged in quarterly installments, so in this example, you’d pay $2,500 every three months. AUM fees can be confusing for a few reasons.
The fee generally only applies to the assets directly managed by the advisor
If you have accounts outside of that net — say, a 401(k) that the advisor cannot or does not manage on your behalf, which is quite common — the assets in that account do not count in the AUM fee calculation. For most investors, the AUM fee would be applied to individual retirement accounts, taxable brokerage accounts and any cash accounts managed by the advisor.
The fee sounds like you’re paying for one service: investment management
However, that’s often not the case. Though the advisor’s fee is based on your investable assets, many advisors who charge AUM fees also provide holistic financial planning, behavioral coaching and general support. For example, an AUM advisor might audit your insurance coverage and make sure it is adequate, consider your 401(k) balances in their guidance and in how they allocate the investments in your non-401(k) accounts, suggest tax-optimization strategies and help you develop an estate plan.
Be sure you understand exactly what services you can expect to receive under the AUM fee and whether planning services like the examples I just shared are included or charged separately. This information should be explicitly outlined in any agreement, but you want to nail down these details before you get to that stage so you can adequately compare advisors.
Nerdy tip: If you’re only interested in having someone else manage your investments, a robo-advisor may be your cheapest option. These algorithm-based services build and manage investment portfolios based on your goals, time frame and risk tolerance.
- Typical cost: An AUM fee of 0.25% to 0.50%, which is significantly lower than most financial advisors will charge, especially on a smaller investment 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.
There may be a minimum fee
This is a bit of a gotcha — some advisors publish an AUM fee schedule and then a flat minimum fee. In most cases, that flat minimum fee should be equal to what you’d pay at the AUM fee for investing the advisor’s minimum asset balance. Often advisors have minimum AUMs of $250,000; if the advisor’s fee is 1%, that would — in an ideal world — make the minimum fee $2,500 per year. (Some advisors will state this by quarter.)
But that’s not always the case: An advisor may have a fee of 1%, a minimum asset balance of $250,000 but a minimum fee of $4,000. Because you won’t hit that minimum with the 1% AUM fee (again, 1% of $250,000 is $2,500 a year), you’re going to be charged the $4,000 instead. That actually translates to an AUM fee of 1.6%.
And then there’s the doozy: The fee you ultimately pay is often blended
As with many things in life, AUM fees favor the wealthy — the more money you have under the advisor’s management, the lower your AUM fee (as a percentage of your assets) is likely to be. For example, it is not uncommon to see a tiered AUM fee that looks like this:
Assets under management | AUM fee | Fee math |
|---|---|---|
Up to $500,000 | 1.5% | 1.5% applies to the full amount |
$500,000 to $1,000,000 | 1.25% |
|
$1,000,001 to $3,000,000 | 1% |
|
$3,000,001 to $5,000,000 | 0.75% |
|
$5,000,001 or more | 0.65% |
|
In this example, if you have $6,000,000 in AUM, you’d pay a blended AUM fee of 0.921%, or about $55,000 a year, based on distributing that $6,000,000 across each fee bucket.
If you have $500,000 in AUM, you’d pay that much-higher fee of 1.5%, though your total cash outlay to the advisor would, of course, be much lower ($7,500).
In our analysis of the advisors we review, AUM fees among the advisors in that group averaged between 1.1% to 1.5% for asset balances of $250,000 and around 0.86% for asset balances of $1 million.
An important note about how AUM fees are paid
Generally speaking, an AUM fee is deducted directly from your managed accounts. Your agreement with the advisor will specify the details, including which account gets charged if you have several under the advisor’s management. That agreement should also note how often it is charged — as noted above, it may be pro-rated on a quarterly or monthly basis — and how it is calculated, such as whether it is based on average daily balance or the ending balance for that period.
One thing to be aware of: This is pretty much the definition of out of sight, out of mind — you’re not writing a check for AUM fees. If you’re not one to look at statements, you’re going to miss these fees the same way you probably have no clue how much you pay for streaming services. The stakes are much higher here. The custodian that holds the accounts should send you a statement that clearly shows the fee deducted, and the advisor will also typically send you an invoice or fee notice. Read them.
2. A flat annual fee or retainer
Average cost: $6,815
Some advisors have left the status-quo AUM fee structure behind in favor of a simpler model: Flat annual fees. We like these — they are easy to understand, they generally do not favor the wealthy over the not-so-wealthy, and they often are paid out of pocket, which is the opposite of out of sight, out of mind.
This fee structure is very common among online advisors — think the Facets, Domain Moneys and Ranges of the world. Often, you’ll find advisors might tier their flat-fee structures similar to how an AUM model uses tiers — the difference is typically that flat-fee tiers are often based on services rendered instead of AUM. For example, you might pay the lowest fee if you need basic cash flow and retirement planning, and the highest fee if you have complex planning needs around a small business, real estate investing or comprehensive estate planning.
It’s worth noting that some advisors use a hybrid of the AUM model and the flat-fee model. For example, you might see advisors that charge a flat fee on lower asset balances — for example, they might charge $1,000 a year on amounts up to $100,000. This makes working with a financial advisor more accessible for those who haven’t yet accumulated a large investment portfolio, and it ensures the advisor earns at least enough to cover the cost of the services it provides. Other advisors might charge separately for each type of service: an AUM fee for asset management and a retainer for financial planning services.
One other thing to be aware of and add to your list of questions to ask: Some flat-fee advisors are “advice-only,” meaning they specifically do not manage investments on your behalf. They may make investment recommendations, which you can then carry out on your own. This has benefits — you generally won’t need to move your money to a different custodian as you might with an AUM advisor — but if you want someone who will make investment decisions on your behalf and keep eyes on your portfolio, you’ll want to specifically look for that when considering flat-fee advisors.
» Is an advisor worth it? How to do the cost-benefit analysis
3. An hourly fee
Average cost: $307
An hourly fee is in some ways a throwback to simpler times — it’s a la carte financial planning, where you get what you pay for, and you pay for only what you need.
That might mean working with a financial advisor for a few hours to address some big picture financial decisions you want a pro to weigh in on — is your retirement on track? Can you afford to buy that house you fell in love with last week? What would it take to be financially stable enough to take an extended sabbatical? Sometimes, you just need permission from someone with letters after their name to give you the confidence you need to take a big leap — or just feel secure that you’re on the right path. An hourly model is a good fit for that. Just note that this arrangement is one-and-done — the advisor won’t be there to hold your hand along the way, at least without another invoice.
Some AUM advisors also have an hourly fee structure for engagements that fall outside of the scope of client agreement — for example, complex estate planning needs or charitable contribution strategies. That fee would then be layered on top of what you pay on an ongoing basis.
4. A flat fee per plan
Average cost: Around $2,926, but can vary widely depending on the complexity of the plan.
If you’d rather not pay hourly or have an advisor on retainer, this is a middle ground — some advisors will allow you to pay a flat fee for a one-time engagement. For example, the advisor might create a comprehensive plan to help you balance several long-term goals, such as retirement and your kids’ college expenses.
You’ll get an outline of the services to be provided upfront, along with the fee you’ll pay for those services. What you won’t get is ongoing management or involvement from the advisor, but if you don’t need that, this can be an inexpensive option. Just note that as with the hourly model, once the services are rendered, matters are in your hands — it’s up to you to carry that plan across the finish line.
This might be great, if you’re generally able to stay on course. If you’re known to wander or get easily distracted by shiny things, it might be worth paying a retainer so you have an advisor to check you.
5. Commissions
Average cost: Varies by investment, but typically between 1% and 6% of the amount of the investment transaction.
Cue the foreboding music: On the surface, commission-based advisors can appear to be the least expensive — they’re paid through commissions on the investments the advisor recommends to you. That means those investments are paying the advisor, not you. (Or at least, not just you. Sometimes advisors who earn commissions also charge clients a fee as well.)
But while some commission-based advisors put your needs first, others are swayed by the investments that pay the highest commission — it’s like when you show up on the car lot to buy the Honda Civic but the salesman thinks an Acura MDX is a better choice and he’ll tell you exactly why. And much like when you’re buying a car, that upsell is going to cost you long-term — an investment that pays a hefty commission to the advisor who sells it undoubtedly passes that commission on to investors in the form of higher expense ratios, or the fees the investment fund charges directly to you.
If you want to dodge commission-based advisors, it helps to understand these two terms you’ll hear:
- A fee-only advisor doesn’t earn any commissions from investments. These advisors face the fewest conflicts of interest when offering advice. Fee-only advisors 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. But they are paid only by you — the client — and not by investments or other services they recommend.
- A fee-based advisor charges an AUM or flat fee, but may also accept commissions or affiliate revenue, either from investments they recommend or other products.
If you’re truly after an advisor who has made every attempt to eliminate or disclose conflicts of interest — known as a fiduciary — you’ll likely want to opt for a fee-only advisor.
» Not sure which fee model is best for you? See our guide to choosing a financial advisor — it’s not just about fees
Comparing advisor fees
Standard advice says to shop around for a financial advisor — most offer a free initial consultation where you can judge things like personality fit (do you feel comfortable opening your finances to this person?) and get into the details about cost and the services you’ll receive in return. This is, by the way, the point at which you may be able to negotiate those fees, or have additional services added to bump the value up.
An advisor should be upfront and transparent with you about fees in that initial consultation. But if you want to do some digging before your first meeting, review its Form ADV, filed with the SEC. Part 2 requires advisors to prepare brochures that include plain English disclosures of the adviser's business practices, fees, conflicts of interest, and disciplinary information.
If you end up meeting with advisors who utilize different fee structures, comparing can get dicey. To smooth out the differences, you need to convert all fees into the same format. That means either turning flat fees into a percentage of your assets:
Annual fee in dollars / assets the advisor will manage X 100
$7,000 / $500,000 = 0.014 or 1.4%
Or taking the AUM fee and turning into a flat annual amount:
AUM fee X assets the advisor will manage
1% X $500,000 = $5,000
As you can see here, the AUM advisor is cheaper — assuming the services offered are comparable.
The other thing you may want to consider: Do you want to pay out of your investments or out of pocket? A $5,000 a year additional expense can be a barrier to financial advice for some people; it can be more convenient and more palatable to pay out of your investment accounts rather than cash flow. This doesn’t necessarily mean you should go with a higher fee because it’s flat, but it’s a factor in your decision.
Remember: Your total cost may be more than the advisor charges
A financial advisor can make managing your investment portfolio fairly hands-off — for you. But you’ll still want to be aware of any fees charged in that portfolio, most often by the custodian (which holds your account) and the investments within that account.
Below, other fees you may encounter:
- Transaction costs. These are charged by the trading platforms the advisor uses, and generally can be avoided by choosing transaction-free investments. Ask your advisor if they expect to incur these fees and how much they might cost.
- Expense ratios. These are charged by mutual funds, index funds and exchange-traded funds, which many advisors use to build portfolios. You might be aware of these fees from your other investment accounts, like your 401(k). Expense ratios can range from 0.05% to upwards of 0.75%; generally speaking, your advisor should be using low-cost funds, like index funds and ETFs, unless they have a good reason not to (for example, you’ve asked for or require some sort of specialized strategy).
- Custodial fees. These are charged by the custodian that holds your assets on behalf of the advisor. They can run around 0.10% to 0.15%, but will vary. Ask your advisor what you can expect to pay and be sure to read your statements.
- Wrap fees. This is a type of advisor fee that bundles a bunch of fees together — think the firm’s investment management services and any of the other fees on this bulleted list. They generally range from 1% to 3% all-in. You’ll want to review what’s included in your wrap fee carefully — it’s a little like cable vs. those streaming services. If you pay for enough streaming services, cable might be cheaper. If you don’t, you’re better off paying for the channels you need individually. That sort of logic applies here.
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- 1.Envestnet. State of Financial Planning Fees. Accessed Sep 9, 2026.
