How much does a fiduciary financial advisor cost?
A fee-only fiduciary financial advisor usually charges in one of four ways. The most common is a percentage of the money they manage for you, called an assets under management or AUM fee. That rate is typically 0.50% to 1.25% per year, with the rate dropping as your account grows. The second model is a flat annual retainer, often $2,500 to $10,000 a year, no matter the account size. The third is hourly, usually $200 to $500 per hour, used by advisors who give one-time advice. The fourth is a project fee — typically $1,500 to $5,000 — for a single deliverable like a financial plan or a tax review. All four models are billed straight to you. There are no hidden commissions or product trails. That is what "fee-only" means in practice.
What you should expect to pay
For most household budgets, the math looks like this:
- $250,000 portfolio, 1% AUM = $2,500 a year.
- $1,000,000 portfolio, 0.85% AUM = $8,500 a year.
- Flat retainer for a household with $750K in assets and full planning: $5,000 to $7,500 a year.
- One-time financial plan: $2,500 to $5,000.
- Hourly review: $1,000 to $2,500 for a few sessions.
Bigger accounts almost always pay a lower AUM rate. Many fee-only firms cap fees at $10,000 to $15,000 once an account passes about $1.5M, since a flat retainer becomes cheaper than a percentage above that line.
What "fee-based" advisors really cost
A fee-based advisor charges a fee like the above and also earns commissions on insurance, annuities, and certain mutual funds. The headline fee can look the same as a fee-only advisor. The total cost can be 1.5× to 3× higher once you add in 12b-1 fees, surrender charges, and insurance overrides. The SEC's Form ADV Part 2A Item 5 is where these extra layers are disclosed.
Why the model matters more than the rate
A fee-only advisor at 1.10% can be a better deal than a fee-based advisor at 0.85%, because the fee-based advisor has product commissions stacked on top. Always ask for the all-in cost — fee plus product expense — not just the headline rate. A simple way to test this: ask the advisor to quote the total dollar cost on a $500,000 account for one year, including every product fee, every commission, and every trail. A fee-only advisor can give you that number on the spot. A fee-based advisor often cannot, because the product layers are not under their direct control.
How fees are billed
Most fee-only advisors bill quarterly. AUM fees are pulled from the account itself. Flat retainers are paid by check or ACH. Hourly and project fees are invoiced. You will see every charge on your statement, which is the point.