The Tell-All Series: How Do Advisors Get Paid?

1. One-Time Plan

We see fees for a one-time financial plan ranging from $1,500-$5,000 depending on your financial situation.

Is this the ideal plan for you?: This is ideal if you have a narrow question or decision that needs to be made, or you are very comfortable self-managing your investments, but just want an advisor to help construct a plan.

Looking for something more?: The downside of a one-time financial plan is that it is a static document in time. Should your family’s situation change, most likely your plan will need updating. More often than not, families are opting into an ongoing relationship with an advisor so they can build a relationship and allow that advisor to be proactive in protecting their wealth.

2. Flat Fee Retainer

The client pays the advisor a monthly flat-fee ranging from $100 to $500 to begin a relationship with a dedicated financial planner. In many instances, fee-based payments may also include commissions on products sold. The yearly fee varies significantly depending on the complexity of the client’s case. Depending on how the planner or advisor works, this can be in the form of an upfront fee, a once-off fee, a monthly fee, or an annual fee.

What are you paying your Flat Fee Retainer advisor for:

Is this the plan for you?: This is ideal if most of your assets are tied up in workplace retirement plans or stock options. You are younger in your financial journey and in the accumulator phase and would like ongoing guidance on how to save more, invest smartly, and plan for your short-term and long-term goals.

Looking for something more?: The downside of this service is that an advisor is typically not actively managing your assets.

3. Asset Under Management (AUM)

This is the most common fee structure offered amongst advisors. It is a full-service financial advisor relationship.

We see fees ranging from .80% to 1.5% of the assets an advisor manages. For example, if you were to hire an advisor under the AUM fee structure, and they managed $1 million dollars for you, their annual fee would be 1% of those investments, which would equate to a $10,000 annual advisor fee. This is not an out-of-pocket expense, the fees come directly from your investment account.

What are you paying your AUM advisor for: