When you’re thinking about buying something or hiring someone for a service, one of the first questions you might ask is, “How much is this going to cost?” Considering a financial planner is no different. You want to know how much you’re going to pay, how you’re being charged, and what all you’re paying for.

Unfortunately, many financial planning clients don’t know how their financial advisors are compensated or even how much they’re paying their advisors. This can lead to confusion, misunderstanding, and potentially mistrust. None of which are good things when it comes to your financial plan.

So really, how much does a financial advisor cost? The honest (but potentially frustrating) answer is it depends on which firm you hire, what type of firm you hire, and the value of your assets under their management.

That said, there are ways to bring clarity to an advisory firm’s fees, services, and compensation model. Choosing a financial planner is one of the most important financial decisions you will make. To help you avoid some common pitfalls and better understand costs, here are some key considerations and questions to ask when talking with potential advisors.

How are financial advisors compensated?

This may seem like an awkward or direct question to ask, but in the financial planning profession, it is common (and important). Advisors should be able to easily and clearly explain how they charge clients for their services. The most common compensation models for advisory firms are fee-only, commission-based, and fee-based.

Fee-only financial planners

Fee-only financial planners do not receive any type of commission from third-party stakeholders. Their only source of revenue is their clients. That's why fee-only planners are often viewed as the most unbiased and transparent advisors in wealth management. So, how much does a fee-only financial advisor cost?

Some of the most common fee schedules for fee-only planners are:

  • Assets under management
  • Flat fee or project-based
  • Hourly

Assets under management

Fee-only planners who use an assets under management, or AUM, model charge clients solely based on the amount of assets they manage. Many fee-only firms charge an annual fee equal to 1% of a client’s assets under their management. For example, if a client hires a fee-only advisor to manage $1,000,000, and the firm’s fee is 1%, the client would pay $10,000 per year (or $833.33 per month). Advisors commonly deduct this fee from the accounts they manage for their clients.

A 1% fee may sound like a lot, and it can be, especially if a firm doesn’t offer ongoing management services in addition to developing a financial plan. That said, research shows that effective financial advisors can provide 3% or more in additional returns (compared to a person’s portfolio when not managed by a financial advisor).

That means a good financial planning team should more than offset the fees they charge. And as an individual’s savings and investment portfolio grows larger, the opportunity cost of not using a professional advisory team becomes quite substantial.

For AUM firms, their success is measured almost exclusively by the success of their clients. To successfully increase revenue, they must continuously help existing clients grow their wealth. This gives fee-only firms a direct (and compelling) incentive to help their clients succeed.

Since the founding of Elwood & Goetz, we have operated as an independent fee-only firm with an AUM fee schedule. We believe it’s the right way to do business for our clients.

Project-based and hourly-based financial advisors

Project-based advisors typically charge a flat fee based on a specific deliverable or project.

For example, this may be a one-time financial plan, personalized investment strategy, or financial check-up. There’s typically a one-time charge and a one-time deliverable. The advisor charges a specific and set price for that project.

Planners who are hired on an hourly basis set an hourly rate. When working with a client, they share the hourly rate and, in some cases, an estimate of how many hours it will take them to complete a specific request or project.

Hourly-based advisors may complete a single project, or they may be contracted to provide short-term advice. For instance, a client may want an advisor to look over their current finances and evaluate their progress toward specific goals. The advisor may give a one-time assessment on how the client can optimize their plan at that moment in time.

Hiring an hourly-based or project-based advisor might make a lot of sense for investors who want to take charge of managing their own finances and aren’t quite ready to delegate these responsibilities to an advisor. The advisor provides their advice, and then it’s up to the client to implement that advice.

Unfortunately, the optimal recommendation at one point in time is often suboptimal even just a week or month later, particularly when it comes to investment decisions. Even so, this may be a desirable option for some clients. For many others, though, they find a lot of value in the ongoing relationship, expertise, and daily management that an advisor can provide.

Commission-based financial planners

If fee-only planners are on one end of the compensation spectrum, then commission-based planners are on the opposite end.

Commission-based planners are compensated through commissions earned by selling their clients specific financial products — such as annuities or insurance policies — or investing their clients’ assets into specific funds "loaded" with commissions. This type of compensation model can often introduce conflicts of interest that potentially compromise an advisor’s recommendations.

For example, commission-based advisors are typically more limited in the products and funds they can recommend to their clients since the advisor's compensation is directly linked to the products they sell. With the limited products and funds available, a commission-based advisor may be inclined to suggest the ones likely to earn them — rather than their client — the greatest return (in the form of a commission check).

And it's not uncommon for clients to be unclear on how much these fees actually are, who is paying the advisor's commission, and the implications on their rates of return. The client may also face deferred sales charges or be locked into certain products or funds to ensure profitability for insurance and investment companies.

This isn’t to say that there aren’t good commission-based advisors out there. But the commission-based model makes it difficult for clients — even those with the very best commission-based advisors — to fully trust their advisor's recommendations. When it comes to something as important as managing your financial future, trust and objectivity really matter.

Regardless of the advisor’s intentions, a client may ask themselves, “Is my commission-based advisor’s advice really in my best interest, or is their advice based on what brings them the biggest commission?” This lack of certainty can hinder a client from fully embracing and benefiting from an advisor's financial advice.

When faced with this potential skepticism, the burden often falls on the client to decide which pieces of advice they want to implement. This can create unexpected obstacles for the client to navigate. After all, expert unbiased advice is one of the main reasons why a client hires a financial advisor in the first place.

Fee-based financial planners

By design, the term “fee-based” is deceptive (purposefully resembling “fee-only” but meaning something different). In the simplest terms, fee-based planners are a hybrid between fee-only and commission-based financial planners. Some of the time, they are paid directly by their clients. Other times, they earn commissions from insurance and investment companies based off the products they sell to their clients.

This can cause even greater confusion for clients. For this reason, fee-based planners can present the same potential conflicts of interest as commission-based planners.

There likely will be times when the advisor is choosing between investment funds or products that pay them different commissions. And since it’s not always clear when commissions are involved and when they aren’t, clients may question their fee-based advisor’s recommendations.

It’s difficult to ignore the fact that a fee-based advisor may receive a personal financial benefit that is tied to the recommendations they share with their clients. This can create skepticism, which is far from ideal when it comes to someone's financial future.

What about robo-advisors?

As digital technology has advanced, it has brought forth a new option for investors: robo-advisors (or more aptly referred to as robo-investors, since the platforms don’t actually provide any personalized advice). Using automated algorithms without human interaction, robo-advisors help clients manage their investment portfolio.

  • The upside to robo-advisors is that they are typically much less costly than human advisors. Where fee-only advisors typically charge 1% of assets under their management, robo-advisors are closer to 0.25% to 0.5%. Similar to hourly-based and project-based advisors, robo-advisors may be an ideal fit for investors who want to maintain control of managing their own financial plan and aren’t ready to delegate to a full-time advisor.
  • The downside to robo-advisors is that they are limited in scope and only offer automated services. For example, robo-advisors offer much fewer investment fund options than an independent financial planner. Human advisors consistently monitor portfolios and select the best funds from all available fund companies.

A human advisor takes into account every aspect of a client’s financial life when developing their plan and sharing advice. On the other hand, a robo-advisor doesn’t provide comprehensive or personalized financial advice. An investment portfolio from a robo-advisor is typically designed based on a client’s risk tolerance profile and target retirement date. 

Though automated and relatively inexpensive, robo-advisors' limitations could cost clients thousands of dollars in missed opportunities such as taxation optimization, dynamic rebalancing, tactical asset allocation strategies, and integration with the other components of a comprehensive financial plan, like charitable giving and retirement planning. 

Robo-advisors don’t consider other important goals and transitions, like estate planning, saving for college education, getting married, changing careers, or buying a new home. And unlike human financial advisors, clients cannot call their robo-advisor and get advice on decisions that impact their financial plan such as new tax laws, current mortgage rates, or insurance quotes.

There is certainly a place for robo-advisors.  But it’s important for clients to know exactly what they are getting — and what they aren’t — when working with a robo-advisor vs. a human financial planner.

What am I paying for?

To measure the true value or cost of a financial advisor, you need to know exactly what you’re paying for by asking an advisor what’s included with their fee. Some financial planners may offer truly comprehensive service. On the other hand, some firms may be more limited in scope or may charge extra fees for additional services.

For example, many commission-based advisors or broker-dealers only provide recommendations that involve the specific products and investment funds they sell (and earn commission from). This can leave gaps in a client’s financial picture and could mean they need to hire additional professionals to get comprehensive financial planning advice.

Other advisors, regardless of their compensation model, may focus on specific areas of a client’s financial plan while outsourcing or charging incremental fees for other service offerings.

Robo-advisors are another example of financial advisors that provide limited services. On paper, robo-advisors are almost always less expensive than human advisors. But the only service you receive from a robo-advisor is automated investment management. There is no comprehensive financial planning, personalization, or implementation.

Because we believe all aspects of a person’s financial life are connected, Elwood & Goetz provides comprehensive and personalized services for our clients.  Our management fee includes all ongoing financial planning and investment management services, including:

  • Retirement planning
  • Tax planning
  • Net worth protection
  • Cash flow management
  • Legacy and estate planning
  • Investment portfolio management
  • Ongoing monitoring and optimization

There are many advisory firms that offer truly comprehensive service. And there are many great advisors who are more limited in the advice and services they provide. To ensure long-term success and clarity, we encourage everyone to ask their advisors (or potential advisors) what is (and isn’t) included in their management fee.

How do I know how much I’m paying my financial advisor?

Hopefully, your advisor or potential advisor is upfront about the fees they charge, exactly how much you’re going to pay them, and what services are included. And by asking some of the questions we’ve covered earlier, you may already have a good idea of what an advisor is going to charge if you work with them.

Unfortunately, there are some advisory firms that aren’t as transparent about their fees. We’ve heard from many prospective clients who are either dissatisfied with how much their current advisor is charging them or — perhaps worse — entirely unaware of how much they are paying.

As a consumer and potential client, you should feel empowered to ask advisors exactly how much you’re going to be paying for their services. Any advisor worthy of your business should be able to easily and clearly provide you with an answer. It is your money. You deserve to know how much you’re spending and what you’re paying for.

We believe in transparency. Our fee structure is published on our website, and we review it in detail with prospective clients.

Once someone becomes a client at Elwood & Goetz, they receive a monthly statement. On those statements, we include our specific fee and show where it was deducted from their accounts.

If you ever have any questions about how much your advisor is charging you, don’t be afraid to ask. And if you feel like your advisor is unclear or dodgy, reach out to another third-party expert to get their assessment.

At Elwood & Goetz, we often provide complimentary fee analyses for individuals so that they see and understand what they are paying their current financial advisor.

What type of financial advisor is right for me?

Although a significant factor, fees are only one component of choosing a financial advisor. When it comes to managing your financial life and achieving your lifelong goals, few things are more important than the financial planner you decide to hire.

It’s important to know all the facts about the advisors you’re considering:

  • What’s their fee structure?
  • How are they compensated?
  • What services do they provide?

It’s equally important to feel good about your relationship with them:

  • Do you trust them?
  • Do they have a college degree in financial planning?
  • Do you have confidence in their expertise?
  • Do you believe they will put your best interests first?
  • Are you comfortable asking them questions?
  • Do you enjoy working with them and learning from them? 

There are a lot of financial advisors out there. That’s largely because there’s no single advisor — or even one type of advisor — that’s right for everyone. The best and right advisor for you will be based on your unique situation, needs, and goals.

That said, in addition to compensation model and services, here are some additional things to consider when trying to find the best financial advisor for you.

Fiduciary duty

When searching for or interviewing potential financial advisors, it’s important to ask them if they are a fiduciary. If they say yes, ask them exactly what that means to them (and for you as their client).

In the simplest terms, a fiduciary is required to act in the best interest of the client. Fiduciaries put their clients first. They do not consider commission payouts or referral fees when providing financial advice to their clients.

It may surprise you that most “financial advisors” aren’t legally required to act as fiduciaries for their clients. According to a Wall Street Journal report, only 2% of advisory firms have a legal obligation to always act in their clients’ best interests.

Even more confusing (and frustrating) is that many wealth management firms classify themselves as fiduciaries, but they do not always maintain the same definition or standards. In some cases, an advisor may market themselves as a fiduciary, but they may not be legally required to act as fiduciary. And some advisors, specifically fee-based advisors, may be dually registered as broker-dealers and investment advisors. So, they may act as fiduciaries some of the time but prioritize their own personal interests at other times (by offering advice that brings them the biggest commission).

It’s not always clear when a dually-registered advisor is acting as a fiduciary and when they aren’t. To ensure you’re always getting objective and optimal advice, you may want to work with a financial planner who is legally required to act as a fiduciary for you 100% of the time.

To help our clients and prospective clients better understand what we mean when we say we’re a legal fiduciary, we’ve outlined our legal fiduciary oath and ethical standards.

Form ADV

When you’re thinking of hiring a financial advisor, one of the most important things to review is their Form ADV. Registered Investment Advisors (RIAs) are required to file their Form ADV disclosure with the U.S. Securities and Exchange Commission. Think of a firm’s Form ADV as their resume, fact sheet, and background check. Here you can find a number of important details about a firm, including:

  • The types of services they offer
  • The number of clients they serve
  • Amount of assets under their management
  • The firm’s fee structure and compensation model
  • The firm’s investment strategy
  • Potential conflicts of interest, including if an advisor earns commission for selling specific products or investment funds
  • Any record of misconduct or regulatory violations

When talking with potential advisors, they should be able to provide you with a copy of their Form ADV. If they don’t provide you with one proactively, don’t be afraid to ask for it. If they hesitate or push back on sharing their Form ADV or answering questions about the information on their Form ADV, this is a red flag.

Fortunately for consumers, these disclosures are made available for free as public records on the SEC’s website. (Here’s E&G’s Form ADV, for reference.)

Qualifications, experience, and credentials

Perhaps even more surprising than the fact that not all advisors are required to act in their clients’ best interests is the fact that not all advisors are even professionally trained in financial planning. This is another reason that people tend to have a negative perception of the financial services industry.

The scary but honest truth is that many advisors go through nothing more than sales training. To make sure you’re working with a qualified advisor, ask them about their credentials and experience. Here are some questions you might ask:

  • Do they hold a degree specifically in financial planning or a related field?
  • What professional designations have they earned?
  • What continuing education do they pursue to stay up to date on regulatory, legislative, and market developments?
  • How many years do they have in the financial planning profession?

In addition to looking for an advisor with professional experience and an educational background in financial planning, you may want to consider engaging advisors who have earned professional accreditations, such as the CFP® (Certified Financial Planner) or CFA (Certified Financial Analyst). To earn these designations, advisors must pass comprehensive exams and meet specific continuing education requirements. These designations also demonstrate an advisor’s commitment to the financial planning profession and advancing their expertise.

Asset minimums

Most advisory firms, particularly fee-only firms, have minimum requirements for clients. It’s important to know going in whether you’ll be a good fit for an advisor based on their minimums and the type of clients they typically work with.

For example, Elwood & Goetz is best suited to serve clients with at least $1,000,000 in investable assets under our management or who meet specific annual income requirements.

We arrived at these criteria based on the comprehensive nature of our financial planning and investment management services and the time required to develop, implement, and monitor each client’s financial plan. We want to maintain our high level of service for all our clients, and it’s important to us that our clients maximize the value of our process.

There are certainly advisory firms out there with minimums greater than $1,000,000, as well as firms with minimums that are lower. Knowing a firm’s minimum requirements help you easily identify which ones you may want to consider and invest your time learning more about.

Advisory firm structure

One final question you may want to ask is how the firm operates in terms of client service. For example, at many advisory firms, you only work with one advisor. For some clients and firms, this structure works well. You’ll have a single point-of-contact and one person dedicated to advancing your financial plan.

However, this structure can also lend itself to knowledge gaps or inconsistencies in service. For example, what happens when your sole advisor goes on vacation or parental leave? What about when they retire or if they leave their firm?

At Elwood & Goetz, our advisors use a planning team model. Rather than being assigned a single advisor, all our clients have a team of financial planners committed to helping them navigate their financial plan. We have found this approach improves our recommendations and allows us to maintain responsive service as we grow. Our team structure fosters consistency for our clients over the long-haul and assures them their team of financial planners won’t retire before they do.

Should I pay for financial advice or hire a financial advisor?

That is the ultimate question. And it’s a question only you can answer.

Generally, we don’t recommend engaging an advisor if you are just beginning to accumulate savings. At that point in your financial life, the costs will almost certainly outweigh the benefits. For people with fewer than $250,000 in investable assets, a self-managed target date index fund may be the best approach. Working with a project-based or hourly-based advisor could also be helpful to make sure you’re getting started on the right path.

But as you accumulate wealth and explore more complex financial decisions and investment strategies, hiring a full-time financial advisor may prove to be beneficial for both your short-term and long-term financial goals.

There are three main reasons someone may choose to hire a financial advisor:

  • Expertise and competency. Advisors who are formally trained in the financial planning profession and commit to continuing education can make optimal recommendations that help your net worth grow more efficiently. Are you unsure or second-guessing yourself about financial decisions, long-term monetary implications, or government regulations related to your finances? Are you fully maximizing your growth and minimizing taxes? Answers to these questions may point toward hiring an experienced advisor to help.
  • Ability to delegate. Hiring a financial advisor frees up your time to focus on things that are important to you or that you’re more passionate about than managing finances. This could be family time, hobbies, your career, or volunteering. Your time is precious. In all likelihood, there’s a lot on your plate, and managing financial plans and investment portfolios takes time. It’s not a singular, one-time event either. Financial plans evolve with life changes and new laws. When it comes to financial planning, advisors go beyond sharing just what to do by working with their clients on how to do it. Having a trusted advisor monitor, adjust, and optimize your financial plan means more time for you to live life more fully — on your terms.
  • Objective, unbiased advice. It can be very challenging — if not impossible — to remove biases and emotions from personal financial decisions. Working with a fee-only fiduciary gives you access to an expert advocate whose obligation is to provide objective advice that serves your best interests. A good advisor will present you with all of the options and share financially optimal recommendations.

If you believe you could benefit from one or more of the reasons outlined above, then it may be time to consider hiring a financial advisor.

When evaluating this decision and what’s best for you, it’s critical to know how much a financial advisor will cost. But equally important — once you’ve found the right advisor — is recognizing the cost of not working with them.

Most advisory firms have incredibly high client retention rates. At Elwood & Goetz, we’re grateful to have an annual retention rate greater than 99%. This is partly because of our high level of client service, but also because once our clients have experienced the value our financial planners bring in helping them achieve financial peace of mind, they don’t want to leave.

Your decision will ultimately come down to what the value of a financial plan is to you. It may be time, peace of mind, greater growth, an earlier retirement, or some other financial or personal goal. Knowing what that value is to you and how much a financial advisor costs will help you find the right advisor — and the right time to hire them.


Whether you're already working with a financial planning team or thinking about hiring one, it's important to know the cost and understand exactly how much you'll pay in financial advisor fees.

There's not a single or straightforward answer for how much a financial advisor costs. It depends on a number of factors, like the advisor's fee structure and the services they provide.

Fee-only advisors will usually charge clients based on assets under their management (AUM), a flat project fee, or an hourly rate. With AUM fee schedules, the cost of working with the advisor will depend on how much of your assets they manage. For example, if the fee-only financial planner charges a 1% fee and they manage $1,000,000 for you, you'll pay $10,000 a year for their services.

Fee-based and commission-based advisors operate differently, and there are more variables involved based on the specific details of their commission agreements. If you decide to work with a fee-based or commission-based advisor, make sure to ask about their legal and ethical fiduciary responsibility to act in your best interest (here's ours).

Although the ranges in costs and services can feel significant, it really comes down to finding an advisor that best fits your specific needs.

It is unfortunate that not all advisors are transparent about their fee structure. And many clients don't even know what or how they're being charged in financial advisor fees.

To figure out exactly how much you will pay, ask the advisor how they are getting paid, if they earn commissions, what your total costs will be, and what services you will (and will not) receive from them.

At Elwood & Goetz, we are straightforward and transparent when it comes to our fee schedule. We never accept commissions, and all our financial planning and investment services are included in our ongoing management fee.

If you're wondering whether it's worth paying for financial advice at all, consider the three main reasons most clients hire a financial planner:

  • Delegate financial planning and investment management responsibility, so you can spend your time focusing on the people and things that matter most to you, like family, friends, hobbies, and career.
  • Work with an educated financial planning professional, so you can maximize your earning potential and minimize taxation.
  • Get objective, unbiased financial advice from a trusted partner, so you are able to make informed and financially optimal decisions on personal and emotional issues involving money.

Working with a financial advisor may give you greater confidence and trust in your long-term financial plan. For many people, the price is worth the peace of mind and the potential gains.

If you're not sure exactly where to begin or if you still have questions about working with a financial advisor, you can reach out to our team anytime. And if a fee-only financial planner is what you're looking for, you can schedule a no-cost discovery call with us to learn more.