AUM fees can range from 0.25% to 2% per year. Retainers typically cost $2,000 to $7,500 annually. Hourly rates range from $200 to $400, and one-time plans often cost between $1,000 and $3,000. Commissions may be 3% to 6% of an investment.
It is not uncommon for advisors with 20+ years of experience to make well over $500k per year. I personally know of several who make $1+ million. That kind of personal income is across the board: wirehouse or independent. Many times this can be more when managing a team of advisors.
Financial Advisors, as well as people from virtually any profession, can make millions of dollars per year but it is definitely not the norm. While possible, there are (in my estimate) only probably 100-200 financial advisors who take home more than $2mm per year.
Around 60%, or the majority, of financial advisors with more than five years of experience will earn over $100,000 annually and up to $300,000. At the higher end, $300,000, puts the advisor in the top 10% of household income in the United States, which is not bad at all.
According to the U.S. Bureau of Labor Statistics, the median annual wage for personal financial advisors was $94,170 in May 2021. It means half of the financial advisors earned more than that, and half earned less. One in ten earned less than $47,570, while one in ten made more than $208,000.
In addition, millionaires are much more likely to work with a financial advisor (69%), more than double the amount of the general population (33%).
Bottom Line. On average, financial advisors charge between 0.59% and 1.18% of assets under management for their asset management. At 1%, an advisor's fee is well within the industry average. Whether that fee is too much or just right depends entirely on what you think of the advisor's services and performance.
Payment for CFP® Certification
These steps include paying: A non-refundable application fee ($200). A non-refundable certification fee for your initial certification period (prorated amount of the standard $455 annual certification fee).
The average return is going to vary from year to year, based on the activity in the market. Studies have shown that financial advisors have the potential to add, on average, between 1.5% and 4% to your portfolio above what the average person is able to get as a return on their own.
Industry standards show that financial advisor fees generally range between 0.5% and 1.5% of AUM annually. Placement of a 2% fee may appear steep compared to this average. However, this fee might encompass more comprehensive services or cater to more unique, high-maintenance portfolios.
Financial service providers regard a HNW client as someone with at least $1 million in liquid – or investable – financial assets. Clients with assets between $5 and $30 million are considered VHNW, while UHNW clients have assets greater than $30 million.
Commission-based fees are one of the most common ways run-of-the-mill investment advisors make money. They may charge a commission based on transactions, trades, or for purchasing specific products such as an annuity, mutual fund, or insurance policy within your larger financial plan.
In our professional experience, achieving an annual income of $300,000 is a realistic target for financial advisors, particularly when leveraging a combination of fee structures, effective AUM growth strategies, and commission-based earnings.
Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank. Other millionaires have safe deposit boxes full of cash denominated in many different currencies.
Achieving a seven-figure income as a financial advisor is possible but not typical. Adhering to industry regulations and ethics is crucial while striving for high income.
Very generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor. Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could also be higher, such as $500,000, $1 million or even more.
The "Big 4" refers to the four largest accounting firms and includes Deloitte, PwC, KPMG, and EY. All four companies provide audit, assurance, consulting, financial advisory, risk management, and tax compliance services. Deloitte. "Deloitte Ranked 6th on World's Best Workplaces 2023."
According to Indeed, the high-end salary for financial advisors is $146,228. Given that you can earn six figures a year as a financial advisor, you may be wondering how to become one.
Most personal financial advisors work full time, and some work more than 40 hours per week. They also may go to meetings on evenings and weekends to meet with existing clients or to try to bring in new ones.