How Much Does Financial Advisor Cost

Managing your finances is a tough job. Sometimes it tends to be overlooked and you are left wondering what you have been doing to get into a financial situation that you did not expect to happen. Nowadays, people are concerned about their investment and their future that is why many are interested in planning out their finances and is interested in knowing the financial advisor cost. This is because people are worried that when they retire, they may not be able to finance themselves without their monthly paycheck.

Cost of Hiring a Financial Advisor

A financial advisor is your planning partner. They are there to help you get through the retirement phase smoothly in terms of your finances. With the help of your financial advisor, you can set financial and personal goals and they will assist you in fulfilling those goals. Your financial advisor will ask you several questions about your savings, your retirement plan, trust funds and many others but what you would be asking as well is the cost of a financial planner.

Here are scenarios that will help you assess how much you get to spend for a financial planner fee:

There are several ways that a financial advisor charges a fee. It can be via a percentage of the asset that they manage on your behalf. Usually, they have 1% to 2% per year. They can also charge on a commission basis which means that any asset sold or bought through them, they will have a certain cut for it. They can also be charged on an hourly rate or a flat rate depending on the project at hand. While others opt to be paid quarterly or via an annual retainer fee.

There is an option for you to pay a financial advisor for a one-time meeting. Let us say that you already have a financial plan in mind and would like a professional validate your plan, you can hire a one-time financial advisor to give you an objective and sound advice for your future endeavor. The fee for this type of transaction usually cost $400-$600 which includes a 1 to 2-hour discussion of your plan as well as a follow-up meeting for the recommendation.

An Image of a Finacial Advisor

Financial advisors also charge an hourly or flat rate, depending on your transaction. Depending on the project that you have in mind, a typical hourly charge for a personal advisor will be from $150 to $300. The cost will vary depending on the advisor’s expertise and years of experience. The more experienced the advisor is, the more expensive their hourly rate will be.

If you have a comprehensive financial plan, then expect to pay as much as $1,800 to $5,000. Note that these costs are only for simple financial plans. If your financial plans are complex then you would have to expect to pay a higher rate as what is stated above.

If you don’t have the luxury of time or if you are not good with numbers then this is the right time that you hire a financial advisor. The financial advisor cost will vary depending on your financial project. They will coach and guide you on how to manage your finances and when and where to invest your money,

Many advisors provide a monthly retainer option. Usually, they charge $500 to $2000 up front wherein they will assist you in the initial phase of your financial planning. Once the plan is all set, then they can charge you a monthly fee of $50 to $300 for their services every month. They will definitely provide you full service such as estate planning, insurance plans, and analysis as well as investment options. Aside from that, your financial advisor will help you on your cash flow and monthly budget, tax planning up to your retirement plan.

Your financial advisor can also manage your investment if you are not sure how to do so. There is a difference when a financial advisor will recommend an asset allocation for you and when you want them to handle and manage your portfolios.

If you want them to also take care and manage your investments then the cost of their services will depend upon the amount of asset they will be managing and how you would like it to be managed. Usually, they charge around 2% to 25% of the total amount of asset that they will handling.

Let us say that you have an investable asset worth $1,000,000 and your financial advisor charges 1% of that total asset. This means that they will charge you around $10,000 a year for their financial advice and management of assets as well.

Financial advisors are responsible in educating you about your finances. They will take time to tell you about the decisions that you have to face and not just giving you the best course of action without explaining why it needs to be done.

Other Types of Financial Advisor Fees

The cost of financial planner will differ on the type of service that you need. Other financial advisor charges according to your situation. If you do not seek a long-term aid from a financial advisor or you only need assistance for a specific type of case then a financial advisor can customize a plan for you. A common hourly financial planning will cost around $150.00 but a specific hourly divorce planning non-management client will only get to pay $150.00 for the service.

If you want to pay a flat rate from your financial advisor then what you would need to provide them are the details of your finances so that they can compute how much you need to pay them on an annual basis. Let us say that your amount of investment will range from $1.00 to as much as $499,999, your average annual fee will be $7,500.

If your total amount of investment starts from $500,000 to as much as $999,000 then you would have to pay your financial advisor around $10,000 to $11,000 for their services. As your investment grows so does the annual fee of the advisor. If your asset is worth $2,000,000 up to $7,499,000 your financial advisor will charge you a flat rate of $37, 500.

But if your asset has reached over $7,500,000 then the financial planner fee will cost you as much as $55,000 for taking care of your assets.

Some financial advisor requires a minimum amount of asset while others will work with what you have giving you the best advice possible. Choosing a financial advisor is very important because they are working for your money and it is a very critical job. A great financial advisor should be well organized. They should be able to assist you to organize your financial life and give you sound financial goals which are achievable and realistic.

They should also be objective not putting any emotional decisions which can greatly affect your finances. They should know how to keep you accountable for your goals and stir you to the direction to the task that you want to implement. They should be proactive making sure that they think of all the scenarios involving your finances. They should have a clear idea of what is going to happen and brings to your attention the finances that need to be handled earlier.

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