Financial Advisor Fees Calculator

When seeking financial advice, the lack of transparency in fees charged by financial advisors is a significant concern for many consumers. According to US News^[1], a 2017 Harris Poll survey revealed that 60% of respondents did not know how much fees they paid on all their money accounts. Navigating financial markets and investments can be daunting, and understanding the cost of professional advice can make the task even more difficult.

Demystifying Fee Schedules in Regulatory Filings
Despite efforts from regulatory bodies to make investing more consumer-friendly, the disclosure requirements have yet to make it easier to comprehend the cost of financial advice. To make matters easy, we reviewed regulatory filings of more than 10,000 financial advisory firms registered with the U.S. Securities and Exchange Commission and various state regulators.

We then tabulated fee schedules from these filings and created a simple fee calculator. Our fee calculator analyzes data from regulatory filings to create a personalized fee analysis for you. The analysis shows you fees that financial advisors charge based on Assets Under Management or the AUM model.

• AUM Model: Under the AUM model, advisors charge you an annual fee as a percentage of assets they manage on your behalf. This fee can vary depending on the amount of assets managed and the complexity of the financial plan they create for you. The fee calculator will calculate the median of fees that various firms publish in their fee schedule. You will also see data on fees charged above and below the median fees.
  

  Many financial advisory firms are open to negotiating the fees they charge. You can use data from this calculator to negotiate your fees when hiring a financial advisor.

• Flat Fee or Retainer Model: Another fee structure that advisors may use is a flat fee or retainer model. In this case, the advisor charges a set fee for a specific period or for a particular service. Flat fees may vary from $250^[2] to $5,000^[2], but median flat fees plan cost $1,000 based on our review of financial advisor regulatory filings.
• Hourly Rates: Some advisors may charge an hourly rate for their services, similar to how other professionals, such as attorneys or accountants, set. According to our research study, the hourly rates may vary from $150^[2] to $425^[2]. The median hourly rate for financial advisors is $250.
• Commissions: It’s also important to note that some advisors may receive commissions for specific products they recommend, such as insurance policies or mutual funds. Understanding whether your advisor receives any commissions and how they may impact their recommendations is essential. Commissions vary based on product, and such information is typically not filed in the financial advisor’s regulatory filing.

Conclusion
In conclusion, financial advisors may charge fees in various ways, including through assets under management model, a flat fee or retainer model, an hourly rate, or through commissions. Understanding the fee structure of your advisor is crucial to making an informed decision and ensuring that you are receiving value for the fees you pay. Ask your advisor about their fee structure and clarify any concerns before hiring them.

[1] What to Know About Financial Advisor Fees and Costs | Financial Advisors | U.S. News (usnews.com)
[2] Ranges are calculated using the 10th and 90th percentile of the dataset.