How much does a financial planner cost?Fee structure, service

  • According to AdvisoryHQ, the average cost of a financial planner is 0.59% to 1.18% of your assets.
  • Not every planner charges by assets under management, though—they may charge fees or commissions.
  • Robo-advisors or online planning tools will cost less than traditional in-person planners.

A financial planner is an expert, usually a CERTIFIED FINANCIAL PLANNER® (CFP), who can help you create a financial plan to achieve your various goals.

“They’ll really try to understand the clients they’re working with, try to understand their short- and long-term goals, and understand their risk tolerance,” says CFP® Professional Maggie Gomez, owner of Maggie’s Money. “They’ll then help them invest their money in the most efficient way to achieve their goals.”

While you might think of a financial planner as someone who helps you with your investments, their role goes beyond just keeping an eye on the stock market.

“Think about it, do I need help with budgeting? Do I need to plan for my student loan debt? Do I want to buy my first home?” Lauryn Williams, CFP® Professional and Founder of Worth Winning Financial Planning Say. A financial planner can help you develop strategies to achieve these goals.

The cost of a financial planner will depend on their services—for example, maybe you want a one-time meeting or an ongoing financial planning session—and their fee structure.

How Financial Planner Fees Work

Not every financial planner has the same method of charging clients. Here are the types of fee structures you might encounter:

  • Assets Under Management (AUM): Planners charge a percentage of the assets they manage. For example, if they charge 0.25% per year and you have $100,000 in your IRA, you’ll pay $250 per year. If the planner has a tiered AUM structure, they will charge you the lower percentage the higher the value of your asset.
  • TOLL: Financial planners may charge a flat fee by the hour, month, or project. For example, you can pay a planner to work with you once or twice an hour for $500 an hour. Planners can charge $1,500 for a project, no matter how long they take. Another might charge $2,000 to $4,000 per year to work with you on an ongoing basis, depending on your needs.
  • commission: Planners earn commissions based on the investment products you purchase, including mutual funds and annuities. They may also get a commission if you buy an insurance policy through them. They can charge a stock commission, which is a fee every time they trade a stock for you. (Other planners may show you how to trade stocks so you don’t have to pay each time.)
  • TOLL: Planners mainly make money through commissions, but a small part also makes money through commissions.

How do you choose the fee structure that works best for you? If you’re busy and just want some guidance to get started, an hourly rate might be best, Gomez said. If you want an ongoing relationship with a planner, an annual fee or a percentage of AUM may be a good option.

It is also important to consider whether you are comfortable with the commission structure.

“Commissions themselves are not a bad thing — real estate agents make money this way, and it’s a common occupation that people can accept,” Williams said. “You just have to be aware that if you’re working with people who take a commission, there may be an innate conflict of interest. So they may not choose what’s in your best interest because they feel motivated to sell in general rather than doing it right What’s best for the client.”

The cost of financial planners doesn’t just depend on their fee structure. It also depends on what type of planner you use.

Average cost of an in-person financial planner

A traditional in-person financial planner typically manages your investments, but they also work with you to develop a financial plan, including retirement plans, debt repayments, and insurance policies. You may meet them face-to-face, but many will also work with you by phone or video conference.

According to AdvisoryHQ’s 2021 data, the average cost of a financial planner charged by AUM ranges from 0.59% to 1.18%. AdvisoryHQ collects data from CFPs, wealth advisors and asset managers. The following are the average percentages charged annually based on assets under management:

resource: Consulting Headquarters

Average cost of a robo-advisor

A robo-advisor is an automated system that helps you create a portfolio. As the name suggests, it’s more of a consultant than a planner, but it’s useful for some people.



It’s a great way for someone just starting out who doesn’t have a huge budget, wants to keep costs low, and really like the ‘set it and forget it’ approach,” Gomez said.

To find the average cost of robo-advisors, we looked at 23 robo-advisors. We then divide costs into two categories: those charged a percentage of the asset, and those charged a flat fee. For robo-advisers with multiple payment options, we include each fee option as a separate data point.

According to our research, the average cost of a robo-advisor charged by AUM is 0.40% per annum. (Remember, we included 111 data points, 85 of which were from a company with multiple fee options.)

Among robo-advisors that charge a flat fee, the average cost is $4.09 per month, or $49.08 per year.

Average Cost of Online Financial Planning

Online financial planning is similar to robo-advising, but a bit more powerful. You have access to live experts and can chat via live chat or video chat.

The difference may seem confusing, so here’s an example: Fidelity Go is an automation platform that charges up to 0.35% per year. Fidelity Personalized Planning & Advice is similar, but adds personalized advice from experts for a 0.50% annual fee. (And you always have the option to go the traditional face-to-face route with Fidelity Wealth Services.)

To see the average cost of online financial planning, we looked at the same list of 23 robo-advisors. We narrowed the list down to 11 companies that offer online financial planning.

The average cost charged by companies using AUM is 0.53% per annum. The average cost of someone charging a flat fee is $12.64 per month, or $151.66 per year. This figure does not include the one-time fee of $300 for Schwab Intelligent Portfolios Premium when you sign up.

Not everyone needs a financial planner

The general rule of thumb is that the more complex your situation and the more assets you have, the more likely you are to benefit from a financial planner.

For example, you might need one if you want to invest and implement a debt repayment strategy. However, if you’re just opening your first savings account and working on building your credit, you probably don’t need professional financial help just yet.

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