What is a good rate for financial planner?

Asked by: Prof. Ashly Zulauf MD  |  Last update: January 21, 2025
Score: 4.2/5 (32 votes)

Hourly rates for financial advisors typically range from $200 to $400 per hour.

How much should you pay a financial planner?

On average, you can expect to pay between 0.5% and 2% of your total assets under management annually, $150 to $400 per hour, or a flat fee ranging from $1,000 to $3,000 for a comprehensive financial plan.

Is a 1% fee worth it for a financial advisor?

You can find legit financial advisors for an hourly fee or a flat annual fee. The only time 1% makes sense is if you need estate and tax in house.

Is 2% high for a financial advisor?

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.

What rate of return should I expect from my financial advisor?

A decent annual return from a financial planner typically varies based on the investment strategy, risk tolerance, and market conditions. However, a common benchmark for a well-managed portfolio is: Conservative portfolios: 4% to 6% annual return Balanced portfolios: 6% to 8% annual return.

How Much Do Financial Advisors Cost?

38 related questions found

Is a 7% return realistic?

A good return on investment is generally considered to be around 7% per year, based on the average historic return of the S&P 500 index, adjusted for inflation. The average return of the U.S. stock market is around 10% per year, adjusted for inflation, dating back to the late 1920s.

Is a 1% management fee high?

Bottom Line. A 1% annual fee on a multi-million-dollar investment portfolio is roughly typical of the fees charged by many financial advisors. But that's not inherently a good or bad thing, but rather should hold weight in your decision about whether to use an advisor's services.

At what income should I get a financial advisor?

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.

What is the average ROI from a financial advisor?

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.

What is the difference between a financial advisor and a financial planner?

While both offer guidance on investments, taxes and other financial matters, financial advisors generally focus on managing an individual's investment portfolios, while financial planners take a look at the entire financial picture and an individual's long-term goals.

Can you negotiate financial advisor fees?

Financial advisor fees may be negotiable. Whether you're able to get fees reduced can depend on which advisor or firm you're working with. If an advisor is willing to negotiate fees, they must specify that in their Form ADV.

Is Edward Jones a fiduciary?

Edward Jones serves as an investment advice fiduciary at the plan level and provides educational services at both the plan and participant levels, if applicable.

Should I keep all my money with one financial advisor?

Whether you should consider working with more than one advisor can depend on your overall goals and financial situation. If you're fairly new to investing and you haven't built up a sizable net worth yet, for instance then one advisor may be sufficient to meet your needs.

Is a 1.5 fee high for a financial advisor?

While 1.5% is on the higher end for financial advisor services, if that's what it takes to get the returns you want, then it's not overpaying, so to speak. Staying around 1% for your fee may be standard, but it certainly isn't the high end. You need to decide what you're willing to pay for what you're receiving.

What does Charles Schwab charge for a financial advisor?

At Schwab, there's no cost to work with your Financial Consultant. ² There's no cost whether you're getting assistance in creating your personalized plan, or receiving tailored product recommendations and direct access to our specialists.

At what net worth should you get a financial planner?

However, in general, it's wise to start working with a financial advisor or wealth management team once you've built a nest egg of $1M in investable assets.

What is a reasonable rate for a financial advisor?

Lastly, some advisors charge by the hour, similar to how a lawyer might bill you. This could be a good choice if you only need occasional advice or specific questions answered rather than ongoing management. Hourly rates for financial advisors typically range from $200 to $400 per hour.

How much money do I need to invest to make $3,000 a month?

$3,000 X 12 months = $36,000 per year. $36,000 / 6% dividend yield = $600,000. On the other hand, if you're more risk-averse and prefer a portfolio yielding 2%, you'd need to invest $1.8 million to reach the $3,000 per month target: $3,000 X 12 months = $36,000 per year.

How many millionaires use a financial advisor?

In addition, millionaires are much more likely to work with a financial advisor (69%), more than double the amount of the general population (33%).

Is it worth it to pay for a financial advisor?

Whether you have complicated finances or you don't know how certain investments work, hiring a professional can help you grasp concepts you weren't familiar with. Some people need the extra assistance, and if you have the means, getting personalized help can make a big difference.

What percentage is normal for a financial advisor?

3% to 6% of investment transaction amount. According to the 2024 State of Financial Planning and Fees study from Envestnet, a company that develops software for the wealth management industry, these were the average financial advisor fees last year: Fixed-percentage fee for a human advisor: 1.05%.

How much cash is too much to hold?

Cash-on-hand guidelines you could use:

Experts generally recommend having enough cash to cover 3–6 months of living expenses in an easily accessible account, such as a high-yield savings account. This safety net can act as a buffer against unexpected expenses like job loss, medical bills or car repairs.

What is a good investment fee rate?

A reasonable expense ratio for an actively managed portfolio is about 0.5% to 0.75%, while an expense ratio greater than 1.5% is typically considered high these days. For passive funds, the average expense ratio is about 0.12%.

Is a financial advisor worth 1%?

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.