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Financial Planner Fees: What You’ll Pay


While many financial advisors focus on investments, some can also help you with holistic financial planning including planning for retirement, saving for a child’s college tuition, planning your estate and more. How much a financial planner charges will depend on a litany of factors, including your needs, how often those services are provided and the planner’s fee structure. A financial advisor can manage your assets and help you plan for the future.

What Is Financial Planning?

Financial planning is the wide-ranging process of examining your financial circumstances and creating a specific plan to reach your goals. Financial planning can touch on a myriad of topics, including retirement, insurance, taxes, investing, estate planning and more. A financial advisor can double as a financial planner, offering both portfolio management and planning services.

Financial planning can include the following services, among others:

  • College funding
  • Cash flow analysis
  • Budget analysis
  • Life insurance needs
  • Long-term care insurance
  • Savings analysis
  • Retirement spending/distribution analysis
  • Tax planning
  • Estate planning
  • Investment analysis
  • 401(k) analysis
  • Employee benefits review
  • Stock options planning

The exact services offered by a financial planner will vary based on the professional. To choose a planner who meets your needs, be sure to ask about their professional credentials, the types of clients they typically serve and whether they earn commissions for recommending certain products or services.

Different Ways Financial Planners Are Paid

Financial Planner Fees

There are a variety of ways financial planning fees can be charged. Here are the three primary fee structures that you’re likely to encounter:

1. Hourly or Flat Fee

Many advisors offer flat fee or project-based financial planning services, allowing clients to receive specific, targeted services for a set price. Fees for flat-fee financial planning are often fixed and quoted upfront.

Many professionals offer financial planning services on an hourly basis. Hourly rates typically range from $150 to $350 per hour, the survey found. However, the median hourly charge is $250.

Then again, certain projects require more time than others. Kitces found the median financial plan developed on an hourly basis costs $1,800. Flat fee costs depend on the specific service you receive.

2. Commissions on the Sale of Financial Products

Annual or quarterly retainers, as well as monthly subscription fees, continue to become increasingly common forms of compensation, the Kitces survey found. Retainers allow “advisors to provide services to clients that may have substantive income (enough to pay a full-fledged advice fee) but little or no portfolio assets to manage,” according to Kitces. Retainer fees can vary wildly, from as little as $600 to as much as $40,000. However, the median retainer fee was $4,000 per year in 2020, up $800 from two years earlier.

3. Percentage of Assets Under Management (AUM)

Fees that are based on a percentage of assets under management are the most common way advisors are compensated for portfolio management. However, some firms and individual advisors may offer comprehensive wealth management services that include both asset management and ongoing financial planning. As a client, your wealth management fee will be based on a percentage of your assets under management.

One percent is often the industry standard for asset-centric fees. The Kitces survey, which collected responses from over 800 financial advisors, determined that median fees were in fact 1% of AUM up to $1 million in assets. This means a person who has $1 million with an advisor will likely pay $10,000 per year in advisory fees. However, an RIA in a Box study found the average annual advisory fee to be slightly less, 0.96%.

Keep in mind that it’s not uncommon for financial planners to charge more than one way. For example, your advisor could charge you a percentage of the assets they are managing for you as well as make a commission on the sale of certain financial products.

How to Look for a Financial Planner’s Fees

Every advisor registered with the U.S. Securities and Exchange Commission (SEC) is required to submit paperwork known as a Form ADV. This publicly available document includes two parts, the first is a series of fill-in-the-blank forms that provide specific information on the advisory firm like its location, the number of clients and assets under management.

The second part, known as Part II, is a brochure that explains the firm’s services, investing approach and any conflicts of interest. It’s in Part II where you’ll find a section titled “Fees and Compensation.” This section should provide the firm’s various fee structures and rates for different services, including financial planning. Some firms may not publish their fee schedule, in which case you’ll need to contact them directly.

To look up a Form ADV, visit the SEC’s Investment Adviser Public Disclosure website and search for specific advisors or firms.

The Bottom Line

Financial Planner Fees

Financial planning encompasses a wide range of topics that people may need help addressing in their financial lives, including planning for retirement, budgeting, and investing their money, among others. A financial planner may offer his or her services on a standalone or hourly basis. They can also be offered as part of comprehensive wealth management, which also includes asset management. Some planners operate on a retainer, as well. In these situations, you can consult with them at various times throughout a year or quarter.

Tips for Finding a Financial Advisor

  • Need help finding a financial advisor or financial planner? Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Interview at least three potential candidates before picking one. You may be inclined to settle for the first advisor you talk to. But do your due diligence and ask about their fee structures, rates, professional credentials and investing philosophy. Also, make sure they are under registration with the SEC and abide by fiduciary duty.

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