How much does a financial adviser cost?

Family taking a funny photo after learning how much a financial adviser costsImage: Family taking a funny photo after learning how much a financial adviser costs

In a Nutshell

The cost of working with a financial adviser varies based on the type of adviser you work with, the services you receive, and the fee structure the adviser uses.
Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

The cost of working with a financial adviser can range widely and is based on a variety of factors.

Depending on your individual situation, you may be able to get basic advice for several hundred to a couple thousand dollars. But if you’re looking for an adviser who takes a holistic approach based on an analysis of your overall financial situation to help you build a long-term plan, you could pay a lot more.

The total cost you’ll incur can vary based on a number of factors, including whether you work with a digital adviser or a person, the type of financial advice you’re looking for, the fee structure your adviser uses and your net worth.

If you’re thinking about working with a financial adviser, here are a few things to consider before making your decision.

Robo-advisers vs. human advisers

When it comes to working with a financial adviser, you essentially have two choices — digital or human. Let’s take a closer look at each.

What’s a robo-adviser?

An automated financial adviser, or robo-adviser, is an automated online investment platform. When you work with a robo-adviser, you answer a series of questions to provide information about how much you want to invest, for how long and your risk tolerance. And your funds are placed in an investment portfolio based on your answers.

With a digital adviser your portfolio is frequently monitored by computers and adjust your portfolio as necessary to keep your investment strategy on track. There’s typically little human interaction, because nearly all transactions take place online. But some platforms allow clients to call or chat online with service representatives if they have questions.

What are the pros and cons of a digital adviser?

There are plusses and minuses to working with a robo-adviser. On the positive side, they offer portfolio management that tends to be less expensive than working with a human financial adviser. If your financial situation isn’t complex or you’re just starting out and looking for a way to invest money without broader financial advice, this may be a good option for you.

“[But] a computer’s not going to help you have confidence, or peace of mind, or alleviate your fear or apprehension of something going on in the market,” says Mark Schoenbeck, a certified financial planner, and executive vice president and national sales director of Kestra Financial.

Plus with a robo-adviser, the ability to customize your portfolio tends to be limited. And robo-advisers typically don’t offer holistic, long-term financial planning services that many human advisers provide.

What services do human advisers offer?

Many financial professionals offer a variety of services that go beyond managing your investment portfolio to help you develop a strategy to achieve your financial goals. Examples include insurance services, tax planning, retirement planning, estate planning and more. But offerings vary greatly from adviser to adviser, so be sure to ask before you get started.

What are the pros and cons of working with a person?

According to Schoenbeck, working with a human adviser can offer a level of customization you can’t get with a robo-adviser. A person can factor in aspects of your financial life, including additional assets you may have, investment preferences, financial goals and more. This can be particularly helpful if you have a complex financial situation.

When volatility and uncertainty in the market increase, people may be more apt to make nonrational decisions based on emotion, suggests Schoenbeck: “It’s in those moments that the comfort and peace of mind from an experienced financial adviser, to help somebody stay the course, can make a huge difference for an investor.”

On the flip side, working with a human can be more expensive than working with a digital adviser. So you’ll have to decide if the extra expense is worth it.

Fee structures

Whether you choose to work with a robo-adviser or a person, you’ll be charged a fee for the services. The amount varies based on the adviser and the type of fees they charge. Here are some common types.


A retainer is a fee you pay for ongoing financial advice and services. The amount is agreed upon before services are rendered and the retainer fee is typically paid quarterly or annually. The services included in the agreement are decided up front. So be sure you understand what’s included before you sign on the dotted line. Because the fee is determined in advance, there should be no surprises when you get the bill.

Hourly rate

This one’s just like it sounds. The adviser charges you an hourly fee for every hour spent working for you. Financial advisers may charge an hourly fee to put together different types of financial plans based on your individual circumstances. The upside is you’re only charged for the time the adviser spends creating your plan or advising you. The downside is if you don’t know for sure how long it will take, you may end up paying more than you expected.

Flat fee

In a flat-fee model, your adviser charges a set amount of money for a specific service. Flat-fee arrangements can be used for a variety of financial-planning and asset-management services. Unlike hourly rate arrangements, the flat fee ensures you know how much you’re going to pay before the project begins.

Assets under management

This is one of the common fee structures you’ll see for financial advisers. Advisers who use this fee structure charge their clients a percentage of the value of the assets they’re managing on behalf the client. For example, if you have $1 million in your portfolio and the adviser charges an AUM fee of 1%, you’ll be charged $10,000. But it’s usually not a one-time fee. You’ll typically pay your adviser an AUM fee every year. And it can change based on the value of your portfolio.


Advisers who are paid by commission are paid when they sell their clients a particular product or when you buy or sell stock through your financial adviser. According to Schoenbeck, commissions are less common today than they were several years ago, but they’re still used.

A concern with commission-based fees is that advisers may try to sell their clients expensive products they don’t need so they can make more money.

How do I know which fee structure is best?

In Schoenbeck’s opinion, one particular fee structure isn’t better than another. Instead it’s about figuring out what’s in the client’s best interest, he says.

Schoenbeck urges consumers to ask lots of questions about how much an adviser’s services cost, how fees are charged and what they’re getting in return for what they’re paying.

“Price is only an issue in the absence of value,” he says.

Think about whether you can afford the fee and how valuable the services are to you. As a consumer, it’s up to you to determine if there’s value in paying for what’s being offered whether you’re working with a robo-adviser or a person, he adds.

Bottom line

Because everyone’s needs are different and advisers use assorted fee structures for their services, the costs of working with a professional will vary. Robo-advisers offer a low-cost alternative for those who are interested in an automated investment option and don’t need to talk to a person day-to-day.

Although you may pay more when you work with a human adviser, you can also develop an ongoing relationship with someone who can give you more tailored advice around some of life’s most-significant moments — such as when you retire or after the death of a spouse.

“The value of having somebody there that you know you can trust to help keep you from making a bad decision — it’s hard to put a value on that type of relationship and that type of experience,” Schoenbeck says.

Ultimately, it’s up to you to decide which adviser is best for you, how much you’re willing to pay and whether the services you receive are worth the cost.

About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more.