Financial Advisor Fees

A financial advisor is a specially trained financial professional who helps his clients with financial planning services, including coordinating the financial requirements for a business or individual. They also oversee investments and insurance plans to ensure that they are working well together. They help their clients make educated decisions about how to save, spend and invest their money. Generally, they charge a flat fee of $1,500 to $3,000 for financial planning services. The fee covers setting up financial priorities and goals regarding investment, insurance, tax planning, debt management, retirement planning and estate planning.

How Much Does a Financial Advisor Cost?

Fee rates and compensation arrangements vary greatly by financial adviser and financial planning firm. Amounts paid to non-CFP financial planners are generally less than the fees charged by CFP professionals who typically receive between $1,500 and $3,000 per hour; this may involve an initial financial plan, financial review or financial coaching. Most financial planners who are not CFPs charge an average of $300 to $500 per hour for their services; this may be on the higher end if the financial planner is also a certified public accountant (CPA), with some who are CPAs charging between $400 and $500 per hour. The financial planners with the most experience and credentials tend to charge more than those who do not invest as much time in financial planning, such as CPAs and lawyers.

Ways Financial Advisor Charge for Their Services

The following are common ways financial advisor charge for their services:

Assets Under Management Fees

The financial planner may charge an assets under management (AUM) fee based on the products he or she recommends. For example, a financial planner who manages portfolios for clients may charge 1% of the portfolio’s market value every year; this is typically paid in quarterly installments. If your financial planner has recommended that you invest $100,000 of your financial portfolio into a mutual fund that has performed well over the past year or so, then you would be charged $1,000 for this financial planning service.

Commission-Based Fees

Some financial planners may charge a commission every time they make a transaction on your behalf, such as selling stocks or purchasing financial insurance. They typically earn commissions of about 4% to 8%. For example, if your advisor has recommended that you invest $10,000 of your portfolio into an investment product that charges a 5% commission upon purchase, then you would be charged $500 for this financial planning service.

Hourly Fees

Some financial planners charge an hourly fee that typically ranges from $200 to $400 per hour, while others may charge a flat rate of $2,000 or more for the financial plan development. Many who charge an hourly fee will break it up into increments, such as 10-minute blocks; any financial planning beyond the first hour would cost another $200.

Fixed Fees

Some financial planners may charge an initial fee of $1,500 to $3,000. They would also charge another $500 or so if they need to revisit the financial plan for any reason. An advisor who charges a fixed fee will typically provide financial planning services for three years; this includes quarterly reviews and annual updates.

Flat Fees

A financial planner who charges a flat fee provides clients a list of financial planning services included in the fee. Typically, those who charge flat fees will review financial documents and financial investments; they may also offer recommendations for financial products that meet their clients’ financial goals.

Retainer Fees

Some financial planners may charge retainer fees that can range from $1,500 to $3,000 per month; you would pay this financial planner for their services regardless of how often they are used. Typically, you’d sign a retainer fee agreement with the advisor before any financial planning begins. Most who charge a retainer fee may provide financial planning services for at least seven years.

When Do You Need a Financial Advisor?

If you’re in a financial crisis and need financial advice about how to recover from financial hardships such as bankruptcy, then you may want to hire a financial advisor. You should also consider hiring one if your financial assets have grown and you would like help managing them or investing for your retirement.

Type of Financial Advisors That You Can Hire

You can hire financial planners to help you with financial planning and financial management. However, they specialize in different areas; make sure that your advisor specializes in the financial planning service you need. Some examples of financial specialists include: – Certified Financial Planners (CFP) who provide financial advice about retirement investments – Certified Public Accountants (CPA) who provide financial advice about taxes – Certified Estate Planners (CEP) who provide financial advice for estate management – Chartered Financial Consultant (ChFC) who provides financial planning services to people with large financial portfolios, especially those whose portfolios are worth more than $1 million Certified financial analysts (CFA) and financial investment advisers (FINRA) who offer financial advice about financial investments – A financial planner who also holds advanced financial designations such as the CFP with AIF (Accredited Investment Fiduciary) designation helps provide financial advice for financial investments and insurance. -Personal financial advisers who provide financial advice to help you meet financial targets you’ve set

Things To Consider When Choosing a Financial Advisor

A financial planner can help you grow your assets and achieve financial goals, so hiring one can be worth the financial investment. However, there are many financial planners to choose from, which is why it’s important for you to find the right financial advisor with experience in providing financial planning services that meet your needs. Choose an advisor who has a clear method for how they achieve their clients’ goals and a list of references from previous clients with similar financial situations as yours. You should also look for financial planners who are members of financial planning associations or professional financial groups, such as the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA), to make sure they meet ethical standards. When you’ve done your financial background check and financial planning needs, you should be ready to start financial planning with your advisor. Ask if the planner followed the financial plan he created for you, if his financial advice was easy to follow and understand, and if you feel comfortable talking to him or her about your financial goals. Be sure that the financial advisor is professional and ethical, or else you could lose your financial assets. Learn more about the qualifications and duties of a financial advisor by reading this article: Financial Advisor

Final Thoughts

Although financial planners can be expensive, many offer financial planning services for a financial fee and may provide you with financial advice about tax and estate management. You can hire financial planners to help you create financial plans, manage your financial assets by setting up investment portfolios, and identify the best ways to save for retirement.

A financial advisor is a professional who helps consumers understand financial concepts and plan their financial future. They can provide financial advice about retirement investing, estate planning, tax planning, financial investment portfolios, insurance products like life insurance or business insurance, savings plans like retirement plans, income plans for when you retire, and more.
The average salary for financial planners depends on financial planning experience, financial planner geographic location, financial advice education and financial advice certification.
Financial planners may charge financial planning fees or financial advice by hour. If you want financial planning services rather than just financial advice, then financial planners may charge an annual retainer financial planning fee or financial advice fees.
That depends on the financial planner, but financial planners should be willing to provide you with financial advice after meeting with you in person.
It's important to consult with financial advisors after identifying your financial needs. Then, they may be able to guide you through the investment process at financial planning seminars or financial planning workshops.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.