How Much Do Financial Planners Charge?

How much can you expect to pay if you hire a financial planner? For better or worse, there’s no one-size-fits-all answer to the question. Different financial planners charge different kinds of fees, and the amount that planners charge will likewise vary significantly. Here’s what you should know right off the bat:

• Online and robo-advisors are the most affordable options. They tend to charge between 0.25% and 0.8% of the total Assets Under Management (or AUM).
• Some human advisors also charge a fee based on your AUM. Generally, this fee is 1%—but it could be lower or higher.
• Other advisors charge hourly fees. These range from lows of roughly $100 per hour to highs of roughly $500 per hour.
• You might also pay an advisor to create a unique financial plan that meets your needs. These plans tend to cost between $1,000 and $5,000, paid up front.
• Then there are those who charge fixed or flat fees. These may be as low as $2,000 per year or as high as $50,000 per year.

How Do Financial Planners Make Their Money?

Before we go any further, it’s worth noting that some financial advisors do not make their money off of fees alone. Many advisors—often referred to as brokers—also earn a commission on some or all of the stocks that they recommend for your portfolio. If you always want to receive the best advice for your situation, we recommend that you work with a fiduciary who does not receive any money on commission. Look for a “fee-only” advisor. A “fee-based” advisor may still serve as a broker in some capacity.

Which Fee Structure is the Right Choice for You?

There are times when talking with a real person is obviously the right choice, but each individual has their own unique needs. Keep these pros and cons in mind as you weigh your options:

• Robo-advisor: It’s not a bad idea to work with a robot advisor if you’re just starting out and you’re only interested in investing. However, the plans offered by robots are built with computer algorithms; customization options are very limited, if they are offered at all. If impact investing is important to you, a robot is definitely not the right choice.
• Online Advisor: If meeting in person isn’t particularly important to you, then an online advisor may be the right choice. These financial planners offer many of the same services that traditional, in-person advisors provide—but at a lower cost.
• Traditional Financial Advisor: These advisors offer investment management at a minimum. Those who only offer investment management will most likely charge you on an AUM basis. Certified Financial Planners offer more comprehensive advice, and costs will vary depending on which option you choose. Choose a CFP with an hourly rate if you just need someone to talk to about retirement planning or savings goals. If you have bigger dreams in mind, it’s worth it to keep a Certified Financial Planner on retainer.

Our Financial Planners Have You Covered

You deserve financial solutions that take all of your dreams and goals into account. Here at IntentGen Financial Partners, our planners are guided by our core values. If you’re ready to save, invest, and share with intention, then you’re already right where you need to be.