A financial advisor typically costs about 1% of assets per year under the most common model, with the rate declining at higher balances, but the real answer depends on which fee model you choose. Advisors charge in five main ways: a percentage of assets under management, a flat or project fee, an hourly rate, an ongoing retainer or subscription, or commissions on products they sell. Industry data from the consulting firm Kitces shows a median advisory rate of about 1% on the first $1,000,000 under the assets model, a median hourly rate of roughly $300, a median standalone financial plan around $3,000, and a median annual retainer near $4,500 (Kitces Research on Advisor Pricing, 2024). The figure that actually matters to you is not the headline fee but the all-in cost, which includes the advisor's fee plus the cost of the investments they use.
What are the main ways financial advisors charge?
There is no single price because there is no single service. The model determines both what you pay and what incentives sit behind the advice.
The assets under management, or AUM, model charges a percentage of the money the advisor manages for you. It is by far the most common; industry data indicates the large majority of advisors use it. Rates are usually tiered, so the percentage declines as your balance grows. The flat or project fee charges a fixed dollar amount for a defined piece of work, such as a comprehensive financial plan. The hourly model charges for time, like an attorney or accountant. The retainer or subscription model charges a recurring flat fee, monthly or annually, often decoupled from how much you have invested. Commissions pay the advisor a percentage of products sold, such as certain annuities or loaded mutual funds; this model is tied to a sale rather than to ongoing advice.
Many firms blend models, for example charging AUM for investment management and a separate flat fee for planning.
How much does each model actually cost?
The table below summarizes typical figures. Treat them as benchmarks; individual firms vary, and your situation may justify more or less.
| Fee model | Typical cost | Notes |
|---|---|---|
| Assets under management | ~1% per year on the first $1M, declining at higher balances | Median blended rate near 1%; large accounts often well below |
| Hourly | ~$200 to $400+ per hour (median near $300) | Good for specific questions or a second opinion |
| Standalone financial plan | ~$1,500 to $5,000+ (median near $3,000) | One-time, project-based |
| Retainer / subscription | ~$2,500 to $7,500+ per year (median near $4,500) | Recurring; not tied to asset level |
| Commission | Varies; embedded in the product | Paid by product sponsor, a built-in conflict |
| Multi-family office | ~0.40% to 0.70% of assets | For larger households; broad coordinated scope |
Sources: Kitces Research on Advisor Pricing, 2024, for hourly, plan, and retainer medians; industry estimates for multi-family office ranges. The AUM tiering means a $5,000,000 account rarely pays a true 1%; a graduated schedule might average closer to 0.70% to 0.85%.
Why does the all-in cost matter more than the headline fee?
The advisory fee is only part of what you pay. The investments inside your portfolio carry their own costs, and those costs vary enormously depending on what the advisor selects.
Consider the difference. An advisor who builds portfolios from low-cost index funds and ETFs might add 0.05% to 0.20% in fund expenses. An advisor who uses actively managed or proprietary mutual funds might add 0.60% or more, sometimes with a share of that flowing back to the firm. Add trading costs, cash drag, and any product commissions, and two advisors quoting the same 1% advisory fee can cost very different amounts in total. We walk through how to audit this in wealth management fees explained.
To find your all-in cost, add three things: the advisory fee, the weighted average expense ratio of your holdings, and any commissions or product charges. That total, expressed as a percentage of your portfolio, is the number to compare across firms.
A worked example: same headline, different total
The following is a hypothetical illustration. A family with $3,000,000 compares two firms.
Firm A advertises a 1.00% advisory fee, or $30,000, and implements with in-house funds averaging 0.65% in expenses, or $19,500. All-in cost: roughly $49,500 per year, about 1.65%.
Firm B charges a 0.80% advisory fee, or $24,000, and implements with third-party index funds and ETFs averaging 0.10%, or $3,000, while including tax and estate coordination in scope. All-in cost: roughly $27,000 per year, about 0.90%.
The advertised fees differed by only 0.20%. The all-in difference is about $22,500 every year, before counting any commissions. The example is hypothetical, but the method is the point: compare total cost and total scope, never the advisory fee in isolation.
Which fee model is right for you?
There is no universally best model; the right one depends on what you need.
If you want ongoing investment management plus coordinated planning and have substantial assets, the AUM model is common and can be reasonable, especially with a fee-only fiduciary and low-cost investments. If you need a specific question answered or a plan built, hourly or project fees let you pay only for that. If you want continuing access to advice but do not want the fee tied to your balance, a retainer or subscription can be efficient, particularly if you have a high income but fewer investable assets. Commission-based arrangements deserve the most scrutiny, because the advisor is paid to sell rather than to advise; we compare the models in fee-only vs. commission-based advisors.
Whatever the model, the test of whether the cost is justified is value: see is a financial advisor worth the cost.
Frequently asked questions
What is the average financial advisor fee?Under the most common assets-based model, the median advisory rate is about 1% on the first $1,000,000, declining at higher balances, according to industry data. A separate COMPLY study found RIA fees averaging about 1.03% of assets. Always check whether investment costs are on top of that.
How much does a financial planner cost without managing my money?Fee-for-service planning is usually priced as an hourly rate near $300, a standalone plan with a median around $3,000, or a recurring retainer with a median near $4,500 per year, per 2024 industry data. These models have no asset minimum.
Is a 1% advisory fee worth it?It can be, if the 1% includes investment management, planning, and tax coordination, and the underlying investments are inexpensive. It is less attractive if it sits on top of high product costs or commissions. Judge the all-in cost, not the headline.
Do financial advisors charge upfront or ongoing?Both exist. Project and hourly fees are typically one-time. AUM, retainer, and subscription fees are ongoing. Commissions are usually paid at the time of a product sale, sometimes with ongoing trail compensation.
What does a multi-family office charge?Multi-family offices serving larger households often charge roughly 0.40% to 0.70% of assets, per industry estimates, in exchange for broad coordination across investments, tax, estate, and family administration. See what is a multi-family office.
How Atlatl Advisers can help
Atlatl Advisers is a boutique multi-family office in Madison, Wisconsin, serving accomplished families as an independent, fee-only, SEC-registered fiduciary. We act as your personal CFO: one coordinated team for investments, financial planning, tax strategy, and estate coordination, organized around our Liquidity, Lifetime, and Legacy framework.
This article is provided by Atlatl Advisers LLC for informational and educational purposes only. It is not investment, legal, tax, or insurance advice, and it does not consider the particular circumstances of any reader. Consult your own advisers before acting. Atlatl Advisers is an SEC-registered investment adviser; registration does not imply a certain level of skill or training. Information is believed accurate as of June 2026 and may change.
