You've probably searched some version of "am I paying too much for financial advice." It's one of the most common financial questions online — and many of the answers you'll find are funded by referral models, which can shape the conclusions they reach.
You're asking the right question — and the answer requires data most fee articles don't include.
But here's what most fee articles get wrong from the start: they treat cost as the only variable. With financial advisor fees explained properly, the real question isn't whether your financial advisor fee is "too high." It's whether the fee matches the value you're receiving — because those are two fundamentally different analyses with fundamentally different answers.
A fee is only one variable in a three-part equation: how much you pay, what services you receive, and whether the value justifies the cost. Two advisors can both charge 1% while delivering fundamentally different service packages — and a fee that looks high on price alone may look reasonable once you account for the full scope of planning, tax work, and behavioral coaching bundled into it.
(Throughout this article, "financial advisor fee" means the cost of any advisory relationship — whether you pay a human CFP®, a robo-advisor, a hybrid platform, or an hourly planner. The benchmarks and calculator work across all models.)
Here's the direct benchmark: the median advisory fee as of 2026 is 1.0% of assets on portfolios up to $1 million, declining on larger balances, according to the 2024 Kitces Research survey of 621 U.S.-based advisors. On a $500,000 portfolio, that 1% means $5,000 per year — and over $330,000 in compounded fee impact over 20 years after compounding.
That number sounds alarming on its own. But here's the part most fee articles leave out: Vanguard's Advisor's Alpha research shows a good advisor can add roughly 3% in net returns through behavioral coaching, tax planning that may save 0.50–0.70% annually in tax drag, and rebalancing discipline — and Russell Investments' research estimates the total value at approximately 3.54%, including rebalancing (0.28%), behavioral coaching (1.43%), financial planning (1.13%), and tax management (0.68%).
So the cost is real — and the value can be real too. By the end of this article, you'll have the benchmarks, the math, and a free financial advisor fee calculator to evaluate all three dimensions — cost, services, and value — for yourself — no zip code required, no advisor ads.
What your financial advice actually delivers
Before you can evaluate whether a fee is fair, it helps to understand what you're paying for — because the value of financial advice is where most cost-only analyses fall apart.
The value of good financial advice — and what the research shows
The strongest case for paying for financial advice has nothing to do with stock-picking. It has everything to do with the decisions you don't make — the panic-sell you avoid, the tax drag you eliminate, the estate plan you actually complete.
Here's why that matters for your financial advisor fee:
Vanguard's Advisor's Alpha research estimates that advisors can add up to approximately 3% in net returns — but the largest single component, worth more than 1.5% on its own, is behavioral coaching. That means keeping you from panic-selling during a downturn or chasing performance during a rally.
Morningstar's Mind the Gap 2025 study, led by Jeffrey Ptak, CFA, found that the average dollar invested in U.S. mutual funds and ETFs earned 7.0% per year over the decade ending December 2024 — about 1.2 percentage points less than those funds' 8.2% aggregate return. That's roughly 15% of total returns forgone because of investor behavior alone.
The DALBAR 2025 QAIB report puts the 2024 behavior gap even wider: 848 basis points (8.48 percentage points), the fourth-largest since 1985.
A good advisor closes that gap. And the data shows that advisory teams generating $12,500+ per client in revenue offer a median of 20 annual touchpoints, while those under $5,000 per client offer 14, according to 2024 Kitces productivity data.
So what does "good" actually look like in practice?
Comprehensive advisory relationships typically bundle investment management, tax-loss harvesting, retirement projections, estate coordination, insurance review, and behavioral coaching during volatile markets. An advisor charging 1% on $1M ($10,000/yr) who also delivers tax planning, estate coordination, and annual retirement projections is bundling $5,000–$8,000 worth of standalone planning services into that fee — changing the effective cost of portfolio management to as little as $2,000–$5,000. If your advisor provides most of these services, the financial advisor fee may be the best investment in your portfolio. If your advisor only rebalances quarterly, the math looks very different.
That's the value side. Now let's look at how it's priced.
How advisors get paid — and why the model matters
The vast majority of firms — 92% — incorporate assets-under-management (AUM) fees, and 86% use AUM as their primary revenue source, up from 82% in 2022, per 2024 Kitces Research. But AUM isn't the only model. About 58% of firms use graduated fee structures, and 72% use more than one charging method.
Here's how the five main models work:
AUM (percentage of assets): You pay a percentage of your total portfolio value annually, typically 0.25%–1.50%. The fee rises automatically as your portfolio grows — which means your advisor's incentive is aligned with your growth, but the dollar amount can outpace the scope of services at higher balances.
Flat fee (retainer or subscription): A fixed annual amount — the median is $4,500 per year, up from $3,000 in 2022, per Kitces. The XY Planning Network surpassed 2,000 fee-only advisors in 2024, signaling that this model is scaling rapidly.
Hourly: Median rate is $300 per hour (up from $250 in 2022). Best for specific needs — a retirement plan review, a tax strategy session — rather than ongoing management. It's also a useful benchmark: converting any financial advisor fee to its equivalent hourly rate reveals whether the pricing matches the scope of services involved.
Commission-based: The advisor earns a commission when you buy or sell specific financial products. This creates a structural incentive to recommend products that pay higher commissions — though commission-based models can also make advice accessible to investors with smaller portfolios who might not meet AUM minimums. NASAA's 2024 survey found 84% of state-registered RIAs use AUM fees, but 51% also use fixed fees and 51% use hourly fees — the industry is evolving.
Fee-only vs. fee-based: These sound similar but are fundamentally different. A fee-only advisor earns income exclusively from client-paid fees — no commissions, no product sales. A fee-based advisor charges fees but may also earn commissions, creating potential conflicts. Understanding whether your advisor is really working in your interest as a fiduciary changes the evaluation entirely.
Now that you understand the value of financial advice and how advisors charge, you can benchmark your specific fee against real data — and measure it against the value.
How to benchmark your financial advisor fee
You've seen what the service is worth and how the pricing models work. Here's where you put your own fee in context — comparing it against market data and seeing the real dollar impact over time. The goal is to evaluate cost and value together, not cost in isolation.
Fee comparison — AUM vs flat vs hourly vs robo vs DIY
The right fee model depends on what you need, what you have, and what you're optimizing for.
Here's the honest, apples-to-apples comparison across every major provider type:
Fee Model | Typical Annual Cost | Services Typically Included | Structural Conflicts | Best For |
|---|---|---|---|---|
AUM (1%) | $5,000 on $500K; $10,000 on $1M | Full planning, investment management, tax, estate, behavioral coaching | Fee grows with assets, not necessarily with work | Investors wanting comprehensive, ongoing advisory |
Flat fee | $3,000–$7,500/yr | Financial planning, investment management, sometimes tax prep | Minimal if fee-only; limited if also commission-eligible | Portfolios above ~$450K where AUM becomes expensive |
Hourly | $300/hr (median) | Specific project work: retirement plan, tax strategy, estate review | Minimal ongoing monitoring; incentive may favor extended sessions | One-time or periodic needs, not ongoing management |
Robo-advisor | 0.25% ($1,250 on $500K) | Automated portfolio management, rebalancing, tax-loss harvesting | May hold excess cash (Schwab: 0.20–0.50% cash drag) | Basic portfolio management, cost-conscious investors |
DIY (index) | 0.03–0.10% fund expenses only | Self-directed; no planning, no coaching, no tax optimization | Behavioral risk: DALBAR shows 848bp gap in 2024 | Disciplined investors with simple situations |
The crossover point where flat-fee becomes cheaper than AUM depends on the flat fee amount: at $4,500 per year against a 1% AUM fee, flat-fee wins above approximately $450,000 in portfolio size. Below that, AUM may actually cost less. For a real-world example, here's the true cost of investing across advisory, fund, and platform layers — showing why all-in cost matters more than any single line item.
But cost is only half the story. When switching to a lower-cost model, be honest about what you lose: a robo-advisor won't call you during a market crash, a flat-fee arrangement may not include comprehensive bundled services, and DIY means handling tax optimization, rebalancing, and behavioral discipline on your own. Every cost comparison has three dimensions — what you save, what you give up, and whether the net outcome serves your goals.
Want to see how this plays out for your specific situation? A good financial advisor fee calculator (one that works whether you're evaluating a human advisor, a robo-platform, or a hybrid service) shows you the exact dollar impact over time — no zip code required, no advisor ads. Just math.
But the comparison table shows only the annual picture. The compound effect over time is where the real differences emerge — on both the cost side and the value side.
What your fee actually costs over time — use the financial advisor fee calculator
Small annual percentages become large dollar amounts when they compound against your returns for decades. Here's the math most fee articles don't show — and the value context most fee critics leave out.
And here's the number that matters most:
20-year compound fee impact (at 7% annual returns):
Portfolio | Fee Rate | Annual Fee (Yr 1) | 20-Yr Value (No Fee) | 20-Yr Value (With Fee) | 20-Year Gap |
|---|---|---|---|---|---|
$250,000 | 1.00% | $2,500 | $967,421 | $801,784 | $165,637 |
$500,000 | 1.00% | $5,000 | $1,934,842 | $1,603,568 | $331,274 |
$1,000,000 | 1.00% | $10,000 | $3,869,684 | $3,207,135 | $662,549 |
$2,000,000 | 1.00% | $20,000 | $7,739,367 | $6,414,271 | $1,325,096 |
$500,000 | 0.25% (robo) | $1,250 | $1,934,842 | $1,872,384 | $62,458 |
That $331,274 gap on a $500,000 portfolio is real — but so is the Morningstar data showing that DIY investors forfeit 1.2 percentage points annually to behavioral mistakes. If an advisor's behavioral coaching prevents even one panic-sell during a downturn, the fee may pay for itself several times over. That's why "am I paying too much?" is the wrong question without "what am I getting for it?"
Here's another way to see it.
At a 4% withdrawal rate in retirement, a 1% advisory fee represents 25% of your annual retirement spending. The fee accounts for $1 of every $4 you withdraw.
At 0.25% (robo), that drops to just 6.25%. Whether that 25% is a fair price depends entirely on what you're receiving for it.
One more lens — the equivalent hourly rate:
Portfolio | AUM Fee (1%) | Est. Hours/Year | Equivalent Hourly Rate |
|---|---|---|---|
$500,000 | $5,000 | 35 | $143/hr — reasonable for a CFP® |
$1,000,000 | $10,000 | 35 | $286/hr — reasonable for comprehensive planning |
$2,000,000 | $20,000 | 40 | $500/hr — worth evaluating against the scope of services received |
$5,000,000 | $50,000 | 40 | $1,250/hr — top-tier consulting rates |
So what does this actually mean for your financial advisor fee?
At $1 million, $286 per hour for a credentialed financial planner is a reasonable rate. At $5 million, $1,250 per hour raises the question of whether the scope of services has scaled with the financial advisor fee — or whether the fee has simply grown with the portfolio. The break-even alpha — the minimum outperformance needed just to cover all fees — that a 1% AUM advisor must generate, after accounting for fund expenses and tax drag, is approximately 1.60% annually.
To see exactly how much you've paid over time, explore how fees affect investment performance — it shows the real impact after compounding. And for a deeper look at fee impact across every layer, here's the true cost of investing over decades.
You can see the numbers. The next step is evaluating whether your specific situation justifies the fee — or signals an opportunity to adjust.
You've probably searched some version of "am I paying too much for financial advice." It's one of the most common financial questions online — and many of the answers you'll find are funded by referral models, which can shape the conclusions they reach.
You're asking the right question — and the answer requires data most fee articles don't include.
But here's what most fee articles get wrong from the start: they treat cost as the only variable. With financial advisor fees explained properly, the real question isn't whether your financial advisor fee is "too high." It's whether the fee matches the value you're receiving — because those are two fundamentally different analyses with fundamentally different answers.
A fee is only one variable in a three-part equation: how much you pay, what services you receive, and whether the value justifies the cost. Two advisors can both charge 1% while delivering fundamentally different service packages — and a fee that looks high on price alone may look reasonable once you account for the full scope of planning, tax work, and behavioral coaching bundled into it.
(Throughout this article, "financial advisor fee" means the cost of any advisory relationship — whether you pay a human CFP®, a robo-advisor, a hybrid platform, or an hourly planner. The benchmarks and calculator work across all models.)
Here's the direct benchmark: the median advisory fee as of 2026 is 1.0% of assets on portfolios up to $1 million, declining on larger balances, according to the 2024 Kitces Research survey of 621 U.S.-based advisors. On a $500,000 portfolio, that 1% means $5,000 per year — and over $330,000 in compounded fee impact over 20 years after compounding.
That number sounds alarming on its own. But here's the part most fee articles leave out: Vanguard's Advisor's Alpha research shows a good advisor can add roughly 3% in net returns through behavioral coaching, tax planning that may save 0.50–0.70% annually in tax drag, and rebalancing discipline — and Russell Investments' research estimates the total value at approximately 3.54%, including rebalancing (0.28%), behavioral coaching (1.43%), financial planning (1.13%), and tax management (0.68%).
So the cost is real — and the value can be real too. By the end of this article, you'll have the benchmarks, the math, and a free financial advisor fee calculator to evaluate all three dimensions — cost, services, and value — for yourself — no zip code required, no advisor ads.
What your financial advice actually delivers
Before you can evaluate whether a fee is fair, it helps to understand what you're paying for — because the value of financial advice is where most cost-only analyses fall apart.
The value of good financial advice — and what the research shows
The strongest case for paying for financial advice has nothing to do with stock-picking. It has everything to do with the decisions you don't make — the panic-sell you avoid, the tax drag you eliminate, the estate plan you actually complete.
Here's why that matters for your financial advisor fee:
Vanguard's Advisor's Alpha research estimates that advisors can add up to approximately 3% in net returns — but the largest single component, worth more than 1.5% on its own, is behavioral coaching. That means keeping you from panic-selling during a downturn or chasing performance during a rally.
Morningstar's Mind the Gap 2025 study, led by Jeffrey Ptak, CFA, found that the average dollar invested in U.S. mutual funds and ETFs earned 7.0% per year over the decade ending December 2024 — about 1.2 percentage points less than those funds' 8.2% aggregate return. That's roughly 15% of total returns forgone because of investor behavior alone.
The DALBAR 2025 QAIB report puts the 2024 behavior gap even wider: 848 basis points (8.48 percentage points), the fourth-largest since 1985.
A good advisor closes that gap. And the data shows that advisory teams generating $12,500+ per client in revenue offer a median of 20 annual touchpoints, while those under $5,000 per client offer 14, according to 2024 Kitces productivity data.
So what does "good" actually look like in practice?
Comprehensive advisory relationships typically bundle investment management, tax-loss harvesting, retirement projections, estate coordination, insurance review, and behavioral coaching during volatile markets. An advisor charging 1% on $1M ($10,000/yr) who also delivers tax planning, estate coordination, and annual retirement projections is bundling $5,000–$8,000 worth of standalone planning services into that fee — changing the effective cost of portfolio management to as little as $2,000–$5,000. If your advisor provides most of these services, the financial advisor fee may be the best investment in your portfolio. If your advisor only rebalances quarterly, the math looks very different.
That's the value side. Now let's look at how it's priced.
How advisors get paid — and why the model matters
The vast majority of firms — 92% — incorporate assets-under-management (AUM) fees, and 86% use AUM as their primary revenue source, up from 82% in 2022, per 2024 Kitces Research. But AUM isn't the only model. About 58% of firms use graduated fee structures, and 72% use more than one charging method.
Here's how the five main models work:
AUM (percentage of assets): You pay a percentage of your total portfolio value annually, typically 0.25%–1.50%. The fee rises automatically as your portfolio grows — which means your advisor's incentive is aligned with your growth, but the dollar amount can outpace the scope of services at higher balances.
Flat fee (retainer or subscription): A fixed annual amount — the median is $4,500 per year, up from $3,000 in 2022, per Kitces. The XY Planning Network surpassed 2,000 fee-only advisors in 2024, signaling that this model is scaling rapidly.
Hourly: Median rate is $300 per hour (up from $250 in 2022). Best for specific needs — a retirement plan review, a tax strategy session — rather than ongoing management. It's also a useful benchmark: converting any financial advisor fee to its equivalent hourly rate reveals whether the pricing matches the scope of services involved.
Commission-based: The advisor earns a commission when you buy or sell specific financial products. This creates a structural incentive to recommend products that pay higher commissions — though commission-based models can also make advice accessible to investors with smaller portfolios who might not meet AUM minimums. NASAA's 2024 survey found 84% of state-registered RIAs use AUM fees, but 51% also use fixed fees and 51% use hourly fees — the industry is evolving.
Fee-only vs. fee-based: These sound similar but are fundamentally different. A fee-only advisor earns income exclusively from client-paid fees — no commissions, no product sales. A fee-based advisor charges fees but may also earn commissions, creating potential conflicts. Understanding whether your advisor is really working in your interest as a fiduciary changes the evaluation entirely.
Now that you understand the value of financial advice and how advisors charge, you can benchmark your specific fee against real data — and measure it against the value.
How to benchmark your financial advisor fee
You've seen what the service is worth and how the pricing models work. Here's where you put your own fee in context — comparing it against market data and seeing the real dollar impact over time. The goal is to evaluate cost and value together, not cost in isolation.
Fee comparison — AUM vs flat vs hourly vs robo vs DIY
The right fee model depends on what you need, what you have, and what you're optimizing for.
Here's the honest, apples-to-apples comparison across every major provider type:
Fee Model | Typical Annual Cost | Services Typically Included | Structural Conflicts | Best For |
|---|---|---|---|---|
AUM (1%) | $5,000 on $500K; $10,000 on $1M | Full planning, investment management, tax, estate, behavioral coaching | Fee grows with assets, not necessarily with work | Investors wanting comprehensive, ongoing advisory |
Flat fee | $3,000–$7,500/yr | Financial planning, investment management, sometimes tax prep | Minimal if fee-only; limited if also commission-eligible | Portfolios above ~$450K where AUM becomes expensive |
Hourly | $300/hr (median) | Specific project work: retirement plan, tax strategy, estate review | Minimal ongoing monitoring; incentive may favor extended sessions | One-time or periodic needs, not ongoing management |
Robo-advisor | 0.25% ($1,250 on $500K) | Automated portfolio management, rebalancing, tax-loss harvesting | May hold excess cash (Schwab: 0.20–0.50% cash drag) | Basic portfolio management, cost-conscious investors |
DIY (index) | 0.03–0.10% fund expenses only | Self-directed; no planning, no coaching, no tax optimization | Behavioral risk: DALBAR shows 848bp gap in 2024 | Disciplined investors with simple situations |
The crossover point where flat-fee becomes cheaper than AUM depends on the flat fee amount: at $4,500 per year against a 1% AUM fee, flat-fee wins above approximately $450,000 in portfolio size. Below that, AUM may actually cost less. For a real-world example, here's the true cost of investing across advisory, fund, and platform layers — showing why all-in cost matters more than any single line item.
But cost is only half the story. When switching to a lower-cost model, be honest about what you lose: a robo-advisor won't call you during a market crash, a flat-fee arrangement may not include comprehensive bundled services, and DIY means handling tax optimization, rebalancing, and behavioral discipline on your own. Every cost comparison has three dimensions — what you save, what you give up, and whether the net outcome serves your goals.
Want to see how this plays out for your specific situation? A good financial advisor fee calculator (one that works whether you're evaluating a human advisor, a robo-platform, or a hybrid service) shows you the exact dollar impact over time — no zip code required, no advisor ads. Just math.
But the comparison table shows only the annual picture. The compound effect over time is where the real differences emerge — on both the cost side and the value side.
What your fee actually costs over time — use the financial advisor fee calculator
Small annual percentages become large dollar amounts when they compound against your returns for decades. Here's the math most fee articles don't show — and the value context most fee critics leave out.
And here's the number that matters most:
20-year compound fee impact (at 7% annual returns):
Portfolio | Fee Rate | Annual Fee (Yr 1) | 20-Yr Value (No Fee) | 20-Yr Value (With Fee) | 20-Year Gap |
|---|---|---|---|---|---|
$250,000 | 1.00% | $2,500 | $967,421 | $801,784 | $165,637 |
$500,000 | 1.00% | $5,000 | $1,934,842 | $1,603,568 | $331,274 |
$1,000,000 | 1.00% | $10,000 | $3,869,684 | $3,207,135 | $662,549 |
$2,000,000 | 1.00% | $20,000 | $7,739,367 | $6,414,271 | $1,325,096 |
$500,000 | 0.25% (robo) | $1,250 | $1,934,842 | $1,872,384 | $62,458 |
That $331,274 gap on a $500,000 portfolio is real — but so is the Morningstar data showing that DIY investors forfeit 1.2 percentage points annually to behavioral mistakes. If an advisor's behavioral coaching prevents even one panic-sell during a downturn, the fee may pay for itself several times over. That's why "am I paying too much?" is the wrong question without "what am I getting for it?"
Here's another way to see it.
At a 4% withdrawal rate in retirement, a 1% advisory fee represents 25% of your annual retirement spending. The fee accounts for $1 of every $4 you withdraw.
At 0.25% (robo), that drops to just 6.25%. Whether that 25% is a fair price depends entirely on what you're receiving for it.
One more lens — the equivalent hourly rate:
Portfolio | AUM Fee (1%) | Est. Hours/Year | Equivalent Hourly Rate |
|---|---|---|---|
$500,000 | $5,000 | 35 | $143/hr — reasonable for a CFP® |
$1,000,000 | $10,000 | 35 | $286/hr — reasonable for comprehensive planning |
$2,000,000 | $20,000 | 40 | $500/hr — worth evaluating against the scope of services received |
$5,000,000 | $50,000 | 40 | $1,250/hr — top-tier consulting rates |
So what does this actually mean for your financial advisor fee?
At $1 million, $286 per hour for a credentialed financial planner is a reasonable rate. At $5 million, $1,250 per hour raises the question of whether the scope of services has scaled with the financial advisor fee — or whether the fee has simply grown with the portfolio. The break-even alpha — the minimum outperformance needed just to cover all fees — that a 1% AUM advisor must generate, after accounting for fund expenses and tax drag, is approximately 1.60% annually.
To see exactly how much you've paid over time, explore how fees affect investment performance — it shows the real impact after compounding. And for a deeper look at fee impact across every layer, here's the true cost of investing over decades.
You can see the numbers. The next step is evaluating whether your specific situation justifies the fee — or signals an opportunity to adjust.
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How to evaluate whether your fee matches the value
You have the benchmarks and the math. Now here's how to apply them to your own situation — including when a higher fee is worth every dollar and when a lower fee might cost you more than it saves.
Signs your fee may not match the value of the advice — in both directions
Here's what to look for.
Each sign includes the exception case, because context changes the answer. Use these as an annual fee review checklist — revisiting them once a year keeps your financial advisor fee aligned with the value your provider delivers.
Your all-in cost exceeds 1.65%. The average all-in advisory cost — advisory fee plus fund expenses plus transaction costs — runs 1.40–1.65%, according to a composite of ICI expense data (0.40% average equity fund expense) and Kitces median advisory fees. Investors above that range may want to understand what's contributing to the higher total. Exception: If your advisor provides active tax-loss harvesting across multiple account types, the tax savings may more than offset a higher all-in cost.
Your fee hasn't been reviewed as your portfolio has grown. Kitces data shows 62% of firms charge at least 1% at $1 million — but only 32% at $2 million. If your financial advisor fee rate hasn't declined as your assets grew, you may be above market. Exception: If your financial complexity has grown with your assets (trusts, multiple entities, estate planning), a stable rate may reflect genuinely expanding service.
Your advisor primarily rebalances and nothing else. If your 1% buys quarterly rebalancing and an annual check-in, you're paying CFP® rates for what a robo-advisor delivers at 0.25%. If your advisor holds a basic index fund portfolio and charges 1%, the equivalent hourly rate math above shows whether the financial advisor fee matches the scope of services — paying for index fund management alone without planning, tax work, or behavioral coaching may not justify the cost. Whether that represents overpaying depends on whether there are services you're receiving but haven't accounted for — requesting an itemized service list from your advisor can clarify the picture. Exception: Some advisors include behavioral coaching that only becomes visible during market volatility — the value may not show up in calm years.
You can't name the services included in your fee. If you're not sure what you're getting, that's a signal — not necessarily of overcharging, but of a conversation that's overdue. Requesting an itemized service list is a reasonable starting point. Exception: Some advisors provide behind-the-scenes work (monitoring for rebalancing triggers, tax-lot selection, beneficiary reviews) that clients don't see directly.
You're paying less — but getting less than you need. The wrong question works in both directions. If you've optimized for the lowest fee but you're making behavioral mistakes during market volatility, skipping tax planning, or avoiding estate work because no one is coordinating it, the cheapest option may be the most expensive one in practice.
People search "financial advisor fees too high" and "is my financial advisor ripping me off" because fee evaluation is genuinely complex. FINRA Foundation research found that 21% of investors believe they pay no fees at all on non-retirement investments — fee information is spread across multiple documents and formats, making comparison difficult. On Reddit's r/personalfinance and r/Bogleheads, fee comparison threads appear weekly. As one investor put it: "I've been paying 1.2% for 15 years and just realized that's over $200,000 I could have saved." These quotes capture the cost side — many investors in the same threads acknowledge that planning and behavioral coaching delivered value they didn't initially factor in. The pattern isn't bad advisors — it's fragmented disclosure that doesn't make costs easy to see or compare.
It's completely reasonable to wonder whether your fee is fair. That's not disloyalty — it's diligence.
Here's where you can see your own numbers:
Your advisory fee may be just one layer. Fee X-Ray reveals your complete fee picture — advisory, fund expenses, transaction costs — benchmarked against what others at your portfolio size pay.
For a full evaluation beyond fees, here's how to evaluate whether your financial advisor is really working for you across all the dimensions that matter. You can also find more on fee disparities most investors don't realize exist buried in fund expenses and plan costs.
If you're seeing some of these signs, the compound math makes the decision clearer. But the math works in both directions — and the cost of not having the right advice may be the biggest number of all.
The compound cost of financial advice — and the compound cost of going without it
Here's the reframe that most fee-focused articles skip entirely:
The cost of NOT having an advisor can exceed the cost of having one.
Morningstar's 1.2-percentage-point annual behavior gap means a DIY investor with $500,000 forfeits roughly $6,000 per year in returns to poor timing and emotional decision-making — more than the $5,000 annual advisory fee. The DALBAR data is even starker: in 2024, the average equity investor underperformed the S&P 500 by 848 basis points. Behavioral coaching — the advisor sitting across the table saying "don't sell right now" — is often the single most valuable service in the relationship, worth more than any stock pick. Vanguard attributes more than 1.5% of the estimated 3% advisor alpha to behavioral coaching alone — meaning the conversation that keeps you invested during a downturn may be worth 8+ percentage points in a single year.
There's also a cognitive reason most investors fixate on the fee and underweight the value: behavioral scientists call it the Weber-Fechner effect. One percent "feels" trivial — it's a tiny number. But as the portfolio tables above show, that tiny number compounds to six figures over two decades. The same bias works in the other direction: the value of good financial advice feels abstract until you calculate what a single panic-sell during a downturn actually costs.
Understanding this bias is the first step to evaluating clearly, not a reason to feel foolish for not noticing sooner. Most people haven't had the tools to see the full picture until recently.
Let's put that in context with your financial advisor fee.
The honest assessment: at $1 million, Kitces data shows the median financial advisor fee holds at 1%. If your advisor provides comprehensive planning — tax strategy that may save 0.50–0.70% annually in tax drag, estate coordination that prevents family conflict, insurance review, and behavioral coaching that kept investors in the market through downturns worth 8+ percentage points — that $10,000 per year ($286 per hour equivalent) is a reasonable professional rate, and the value may exceed the cost. If your advisor provides basic portfolio management on a $2 million account, $20,000 per year ($500 per hour equivalent) is worth a conversation.
The question was never just "am I paying too much?" It was always "am I getting enough value for what I pay?" You now have the data on all three dimensions. The final piece is understanding why this information has been so hard to find — and what to do with your analysis.
The bigger picture — and what to do next
You've seen the benchmarks, the math, and the evaluation criteria. Here's why this information isn't easier to find online, and three paths forward depending on what your analysis revealed.
Why fee information is harder to compare than it should be
The reason fee analysis is hard to find in one place isn't a conspiracy. It's a fragmentation problem — and a funding model that complicates things.
Many of the largest financial content platforms are funded by advisor referrals and performance marketing — one major comparison site alone reported $687.6 million in FY2024 revenue. That doesn't mean their content is wrong, but it does mean the business model creates a structural tension: the platforms generating the analysis also generate revenue from the firms being analyzed. That tension can shape which conclusions get the most visibility.
Understanding how fee content is funded helps you read it more critically.
When a financial advisor fee calculator (regardless of provider type) asks for your zip code before showing results, it may be collecting information for advisor matching — not just answering your question. Knowing the difference helps you evaluate the tool.
Fee transparency is an active area of regulatory focus. In FY2024, the SEC charged an adviser $45 million for undisclosed wrap fee conflicts and $2.9 million for failing to disclose rollover incentive compensation. In August 2025, the SEC charged TZP Management for overcharging clients, providing $680,000+ in relief.
These were notable enforcement actions — not the norm — but they illustrate why reviewing your own fee documents is a reasonable step.
Fee disclosure infrastructure exists (Form ADV, Form CRS, BrokerCheck) — the challenge is that these documents weren't designed with side-by-side comparison in mind.
Truthifi's model has no referral revenue, no AUM fees, and no product commissions — which means the analysis above has no financial relationship with any advisor or firm. The math is the same math a $50,000-per-year institutional analysis would produce. You now have access to it for free.
Now that you understand the landscape, here's how to act on your analysis.
Your three options — negotiate, switch, or stay (and why "stay" might be the best one)
Based on your evaluation, one of these three paths probably fits.
These options apply whether your current arrangement is with a traditional advisor, a robo-platform, or a hybrid service.
Negotiate your current fee. If you value your advisory provider but the math shows your financial advisor fee is above market, bring the data to a conversation. Kitces benchmarks show median fees at $1 million range from 0.75–1.00%, and most firms offer graduated schedules at higher balances — 58% of firms already use them. Knowing these benchmarks gives you real leverage when negotiating advisor fees — not as a confrontation, but as a shared reference point. This isn't adversarial. Good advisors welcome clients who understand the value equation, and a transparent fee conversation strengthens the relationship.
Switch models. If your all-in cost exceeds what the service warrants, switching to a lower-fee model is now a credible alternative. Flat-fee financial advice could lower your fees significantly: at $4,500 per year versus 1% AUM, the crossover favors flat-fee above roughly $450,000 in portfolio size. Below that threshold, a 1% AUM fee may actually cost less than a flat retainer. Some investors split their advisory relationship — using an hourly advisor ($300/hr) for specific planning needs and a robo-advisor (0.25%) for portfolio management — though this approach trades the integrated planning relationship, behavioral coaching during downturns, and behind-the-scenes tax work that a comprehensive advisor provides for lower cost. To explore whether a different model suits your situation, check how different advisory fee models compare for basic portfolio management.
Stay — because you're getting real value. If your advisor provides comprehensive planning, behavioral coaching, and proactive tax work — and your fee is at or below the Kitces median for your portfolio size — you may be in exactly the right place. A good advisory relationship — one that delivers tax savings, prevents behavioral mistakes, and coordinates your estate — may be the best investment you make. The goal is not to pay the least. It's to know what you're paying, understand what you're getting, and confirm the two are in balance. For many investors, the analysis ends here: the fee is fair, the value is real, and the right move is to stay with confidence.
However you proceed, your advisor's Form ADV Part 2 (downloadable from the SEC's IAPD database) is the starting document. Section 5 contains the fee schedule — effectively a financial advisor fee schedule template that shows exactly how fees are calculated at each portfolio tier.
Form CRS adds conflict-of-interest disclosures.
These are public records — using them isn't suspicion. It's standard due diligence.
You're already asking the right questions. See your real numbers — connect your accounts in under 2 minutes (read-only access — we never touch your money) and let 100+ diagnostics show you what you're actually paying across every layer.
Before you go, here are direct answers to the questions investors ask most about advisor fees.
FAQ — Financial advisor fees and the value of financial advice
Is 1% too much for a financial advisor?
Depends on portfolio size and services. At $500,000, 1% ($5,000/yr) is market rate for comprehensive planning. At $1 million or more, Kitces data shows median fees trending toward 0.75–0.85%. At $2 million or more, 1% means $20,000/yr — whether that's above market depends on the scope of planning, tax work, and behavioral coaching bundled into the fee. The better question: does the value of the financial advice exceed the cost?
What is a reasonable financial advisor fee?
Median AUM fee: 1% up to $1 million, declining with portfolio size (2024 Kitces Research). Flat-fee: $3,000–$4,500/yr. Hourly: $300/hr. Robo: 0.25%.
Compare your fee against these benchmarks at your portfolio tier — then compare the services you receive against what each model delivers.
Are financial advisor fees negotiable?
Yes — especially above $500,000. Kitces data shows 62% of firms charge at least 1% at $1 million, but only 32% do at $2 million, proving that fees decline with scale. Graduated schedules and flat-fee alternatives are common points of comparison in fee conversations.
How much should I pay an advisor for a $500K portfolio?
At 1% AUM: $5,000/year. A flat-fee alternative runs $3,000–$4,500/yr — a savings of $500–$2,000 annually. Above $500,000, flat-fee is usually the cheaper model. Use our calculator for exact long-term comparison — and factor in the value of the financial advice included at each price point.
How much should I pay for a $1 million portfolio?
At 1% AUM: $10,000/year. Kitces data shows median fees at this level trending toward 0.75–0.85%, which would bring annual cost to $7,500–$8,500. Flat-fee advisory runs $4,000–$7,500/yr. The crossover favors flat-fee above approximately $450,000.
Is my financial advisor ripping me off?
People search this because fee evaluation is genuinely complex. Check three things: (1) your total all-in cost versus Kitces median benchmarks by portfolio size, (2) the services you actually receive versus what you're paying for, (3) your advisor's Form ADV Part 2 fee schedule versus what they quoted you. If the services match the fee, you may not be overpaying — you may be getting exactly what comprehensive financial advice costs.
Are financial advisor fees tax deductible?
Advisory fees are not tax deductible for individual taxpayers. The Tax Cuts and Jobs Act suspended the deduction in 2018, and subsequent legislation made this permanent. Fees paid from IRA accounts may have different tax treatment — consult a tax professional for your specific situation.
How do I check my advisor's actual fee?
Download your advisor's Form ADV Part 2 from the SEC's IAPD database. Section 5 lists the fee schedule. Also check Form CRS for conflict disclosures and FINRA BrokerCheck for registration and disciplinary history.
Should I fire my financial advisor?
Not necessarily — and that impulse may itself be the wrong question. Advisors providing tax planning that may reduce tax drag by 0.50–0.70% annually, estate coordination, and behavioral coaching can add approximately 3% in value annually (Vanguard Advisor's Alpha). But if yours only manages a basic portfolio for 1%+, the fee may exceed the value of the service — investors in this situation sometimes evaluate flat-fee or robo alternatives to compare value, using the benchmarks above.
Fee-only vs fee-based — what's the difference?
Fee-only means income exclusively from client-paid fees — no commissions, no product sales, no referral payments. Fee-based means the advisor charges fees but may also earn commissions, creating potential conflicts. The names sound similar; the models are fundamentally different.
How much does 1% actually cost over 20 years?
On $500,000 earning 7% annually: without fees, the portfolio grows to approximately $1.93 million. With a 1% fee, it reaches approximately $1.60 million — a gap of over $330,000. The fee compounds against your returns every year, which is why a small percentage produces a large dollar impact. Whether that impact is justified depends on the financial advice delivered during those 20 years.
What do financial advisors actually do for 1%?
A comprehensive advisory relationship should include: investment management, tax planning and optimization, retirement projections, estate coordination, insurance review, and behavioral coaching during market volatility. If yours only rebalances a basic portfolio quarterly, 1% may exceed the value of the service delivered — an itemized service list from your advisor can reveal the full picture. If yours does all of the above, 1% may be the best money you spend.
Should I review my advisor fee after a divorce?
Yes. Divorce often reshapes your portfolio size, tax situation, and financial complexity — all of which affect whether your current fee is appropriate. If your assets decreased, your advisory fee decreased automatically, but you may now need more planning help (tax implications, QDRO processing, new estate documents) at a time when your portfolio is smaller. Many financial professionals recommend reviewing your fee-to-service ratio after major life changes like divorce.
Are financial advisor fees too high for retirees?
Retirees face a unique fee challenge: during accumulation, 1% may be offset by growth. In retirement, you're withdrawing — so that 1% comes directly from the money you live on. At a 4% withdrawal rate, a 1% advisory fee represents 25% of your annual retirement spending. Retirees should evaluate whether their advisor provides active tax management, required minimum distribution planning, and estate coordination — if those services are present, the fee may deliver strong value even in retirement. If not, some retirees find that flat-fee or hourly models align better with their distribution-phase needs — the right model depends on the services involved.
Are financial advisor fees too high for beginners?
For investors just starting out with portfolios under $250,000, a 1% AUM fee ($2,500/year on $250K) may be reasonable if the advisor provides comprehensive financial planning — budgeting, debt strategy, insurance review, and investment education. At this level, the equivalent hourly rate is approximately $83/hour, below market for a CFP®. However, a robo-advisor at 0.25% ($625/year) covers basic portfolio management, and an hourly advisor at $300/hour for occasional planning sessions may deliver more targeted value.
Why is "am I paying too much?" the wrong question?
Because it treats fee as the only variable. The right question is whether the value of financial advice — behavioral coaching, tax savings, estate coordination, planning discipline — justifies the fee. Vanguard estimates that value at approximately 3%, Russell Investments at 3.54%. A fee that looks high in isolation may look reasonable — or even cheap — once you account for what the financial advice delivers. The goal is alignment between cost and value, not the lowest possible price.
You started by wondering if you're paying too much
Now you know that's only half the equation. The benchmarks, the framework, and the questions in this article let you evaluate all three dimensions — what you pay, what you receive, and whether the value justifies the cost — with the same rigor.
Sometimes the answer is that the fee exceeds the value of the services delivered. Sometimes it's that you're getting more than you realized — and the fee is a bargain when measured against the behavioral mistakes, tax drag, and planning gaps it prevents. The important thing is that the question is now answerable.
The goal isn't to pay the least. It's to know what you're paying, understand what you're getting, and make sure the two are in balance. That clarity is something you deserve — and now you have the tools to get it.
Read next from the Truthifi blog
Truthifi is an investment monitoring platform — not a financial advisor, broker-dealer, or tax professional. The information in this article is educational and should not be construed as personalized financial advice or a recommendation regarding any financial advisor. All statistics cited reflect publicly available data as of February 2026. Consult a qualified professional before making financial decisions. Truthifi earns no revenue from advisor referrals, product commissions, or AUM fees.
How to evaluate whether your fee matches the value
You have the benchmarks and the math. Now here's how to apply them to your own situation — including when a higher fee is worth every dollar and when a lower fee might cost you more than it saves.
Signs your fee may not match the value of the advice — in both directions
Here's what to look for.
Each sign includes the exception case, because context changes the answer. Use these as an annual fee review checklist — revisiting them once a year keeps your financial advisor fee aligned with the value your provider delivers.
Your all-in cost exceeds 1.65%. The average all-in advisory cost — advisory fee plus fund expenses plus transaction costs — runs 1.40–1.65%, according to a composite of ICI expense data (0.40% average equity fund expense) and Kitces median advisory fees. Investors above that range may want to understand what's contributing to the higher total. Exception: If your advisor provides active tax-loss harvesting across multiple account types, the tax savings may more than offset a higher all-in cost.
Your fee hasn't been reviewed as your portfolio has grown. Kitces data shows 62% of firms charge at least 1% at $1 million — but only 32% at $2 million. If your financial advisor fee rate hasn't declined as your assets grew, you may be above market. Exception: If your financial complexity has grown with your assets (trusts, multiple entities, estate planning), a stable rate may reflect genuinely expanding service.
Your advisor primarily rebalances and nothing else. If your 1% buys quarterly rebalancing and an annual check-in, you're paying CFP® rates for what a robo-advisor delivers at 0.25%. If your advisor holds a basic index fund portfolio and charges 1%, the equivalent hourly rate math above shows whether the financial advisor fee matches the scope of services — paying for index fund management alone without planning, tax work, or behavioral coaching may not justify the cost. Whether that represents overpaying depends on whether there are services you're receiving but haven't accounted for — requesting an itemized service list from your advisor can clarify the picture. Exception: Some advisors include behavioral coaching that only becomes visible during market volatility — the value may not show up in calm years.
You can't name the services included in your fee. If you're not sure what you're getting, that's a signal — not necessarily of overcharging, but of a conversation that's overdue. Requesting an itemized service list is a reasonable starting point. Exception: Some advisors provide behind-the-scenes work (monitoring for rebalancing triggers, tax-lot selection, beneficiary reviews) that clients don't see directly.
You're paying less — but getting less than you need. The wrong question works in both directions. If you've optimized for the lowest fee but you're making behavioral mistakes during market volatility, skipping tax planning, or avoiding estate work because no one is coordinating it, the cheapest option may be the most expensive one in practice.
People search "financial advisor fees too high" and "is my financial advisor ripping me off" because fee evaluation is genuinely complex. FINRA Foundation research found that 21% of investors believe they pay no fees at all on non-retirement investments — fee information is spread across multiple documents and formats, making comparison difficult. On Reddit's r/personalfinance and r/Bogleheads, fee comparison threads appear weekly. As one investor put it: "I've been paying 1.2% for 15 years and just realized that's over $200,000 I could have saved." These quotes capture the cost side — many investors in the same threads acknowledge that planning and behavioral coaching delivered value they didn't initially factor in. The pattern isn't bad advisors — it's fragmented disclosure that doesn't make costs easy to see or compare.
It's completely reasonable to wonder whether your fee is fair. That's not disloyalty — it's diligence.
Here's where you can see your own numbers:
Your advisory fee may be just one layer. Fee X-Ray reveals your complete fee picture — advisory, fund expenses, transaction costs — benchmarked against what others at your portfolio size pay.
For a full evaluation beyond fees, here's how to evaluate whether your financial advisor is really working for you across all the dimensions that matter. You can also find more on fee disparities most investors don't realize exist buried in fund expenses and plan costs.
If you're seeing some of these signs, the compound math makes the decision clearer. But the math works in both directions — and the cost of not having the right advice may be the biggest number of all.
The compound cost of financial advice — and the compound cost of going without it
Here's the reframe that most fee-focused articles skip entirely:
The cost of NOT having an advisor can exceed the cost of having one.
Morningstar's 1.2-percentage-point annual behavior gap means a DIY investor with $500,000 forfeits roughly $6,000 per year in returns to poor timing and emotional decision-making — more than the $5,000 annual advisory fee. The DALBAR data is even starker: in 2024, the average equity investor underperformed the S&P 500 by 848 basis points. Behavioral coaching — the advisor sitting across the table saying "don't sell right now" — is often the single most valuable service in the relationship, worth more than any stock pick. Vanguard attributes more than 1.5% of the estimated 3% advisor alpha to behavioral coaching alone — meaning the conversation that keeps you invested during a downturn may be worth 8+ percentage points in a single year.
There's also a cognitive reason most investors fixate on the fee and underweight the value: behavioral scientists call it the Weber-Fechner effect. One percent "feels" trivial — it's a tiny number. But as the portfolio tables above show, that tiny number compounds to six figures over two decades. The same bias works in the other direction: the value of good financial advice feels abstract until you calculate what a single panic-sell during a downturn actually costs.
Understanding this bias is the first step to evaluating clearly, not a reason to feel foolish for not noticing sooner. Most people haven't had the tools to see the full picture until recently.
Let's put that in context with your financial advisor fee.
The honest assessment: at $1 million, Kitces data shows the median financial advisor fee holds at 1%. If your advisor provides comprehensive planning — tax strategy that may save 0.50–0.70% annually in tax drag, estate coordination that prevents family conflict, insurance review, and behavioral coaching that kept investors in the market through downturns worth 8+ percentage points — that $10,000 per year ($286 per hour equivalent) is a reasonable professional rate, and the value may exceed the cost. If your advisor provides basic portfolio management on a $2 million account, $20,000 per year ($500 per hour equivalent) is worth a conversation.
The question was never just "am I paying too much?" It was always "am I getting enough value for what I pay?" You now have the data on all three dimensions. The final piece is understanding why this information has been so hard to find — and what to do with your analysis.
The bigger picture — and what to do next
You've seen the benchmarks, the math, and the evaluation criteria. Here's why this information isn't easier to find online, and three paths forward depending on what your analysis revealed.
Why fee information is harder to compare than it should be
The reason fee analysis is hard to find in one place isn't a conspiracy. It's a fragmentation problem — and a funding model that complicates things.
Many of the largest financial content platforms are funded by advisor referrals and performance marketing — one major comparison site alone reported $687.6 million in FY2024 revenue. That doesn't mean their content is wrong, but it does mean the business model creates a structural tension: the platforms generating the analysis also generate revenue from the firms being analyzed. That tension can shape which conclusions get the most visibility.
Understanding how fee content is funded helps you read it more critically.
When a financial advisor fee calculator (regardless of provider type) asks for your zip code before showing results, it may be collecting information for advisor matching — not just answering your question. Knowing the difference helps you evaluate the tool.
Fee transparency is an active area of regulatory focus. In FY2024, the SEC charged an adviser $45 million for undisclosed wrap fee conflicts and $2.9 million for failing to disclose rollover incentive compensation. In August 2025, the SEC charged TZP Management for overcharging clients, providing $680,000+ in relief.
These were notable enforcement actions — not the norm — but they illustrate why reviewing your own fee documents is a reasonable step.
Fee disclosure infrastructure exists (Form ADV, Form CRS, BrokerCheck) — the challenge is that these documents weren't designed with side-by-side comparison in mind.
Truthifi's model has no referral revenue, no AUM fees, and no product commissions — which means the analysis above has no financial relationship with any advisor or firm. The math is the same math a $50,000-per-year institutional analysis would produce. You now have access to it for free.
Now that you understand the landscape, here's how to act on your analysis.
Your three options — negotiate, switch, or stay (and why "stay" might be the best one)
Based on your evaluation, one of these three paths probably fits.
These options apply whether your current arrangement is with a traditional advisor, a robo-platform, or a hybrid service.
Negotiate your current fee. If you value your advisory provider but the math shows your financial advisor fee is above market, bring the data to a conversation. Kitces benchmarks show median fees at $1 million range from 0.75–1.00%, and most firms offer graduated schedules at higher balances — 58% of firms already use them. Knowing these benchmarks gives you real leverage when negotiating advisor fees — not as a confrontation, but as a shared reference point. This isn't adversarial. Good advisors welcome clients who understand the value equation, and a transparent fee conversation strengthens the relationship.
Switch models. If your all-in cost exceeds what the service warrants, switching to a lower-fee model is now a credible alternative. Flat-fee financial advice could lower your fees significantly: at $4,500 per year versus 1% AUM, the crossover favors flat-fee above roughly $450,000 in portfolio size. Below that threshold, a 1% AUM fee may actually cost less than a flat retainer. Some investors split their advisory relationship — using an hourly advisor ($300/hr) for specific planning needs and a robo-advisor (0.25%) for portfolio management — though this approach trades the integrated planning relationship, behavioral coaching during downturns, and behind-the-scenes tax work that a comprehensive advisor provides for lower cost. To explore whether a different model suits your situation, check how different advisory fee models compare for basic portfolio management.
Stay — because you're getting real value. If your advisor provides comprehensive planning, behavioral coaching, and proactive tax work — and your fee is at or below the Kitces median for your portfolio size — you may be in exactly the right place. A good advisory relationship — one that delivers tax savings, prevents behavioral mistakes, and coordinates your estate — may be the best investment you make. The goal is not to pay the least. It's to know what you're paying, understand what you're getting, and confirm the two are in balance. For many investors, the analysis ends here: the fee is fair, the value is real, and the right move is to stay with confidence.
However you proceed, your advisor's Form ADV Part 2 (downloadable from the SEC's IAPD database) is the starting document. Section 5 contains the fee schedule — effectively a financial advisor fee schedule template that shows exactly how fees are calculated at each portfolio tier.
Form CRS adds conflict-of-interest disclosures.
These are public records — using them isn't suspicion. It's standard due diligence.
You're already asking the right questions. See your real numbers — connect your accounts in under 2 minutes (read-only access — we never touch your money) and let 100+ diagnostics show you what you're actually paying across every layer.
Before you go, here are direct answers to the questions investors ask most about advisor fees.
FAQ — Financial advisor fees and the value of financial advice
Is 1% too much for a financial advisor?
Depends on portfolio size and services. At $500,000, 1% ($5,000/yr) is market rate for comprehensive planning. At $1 million or more, Kitces data shows median fees trending toward 0.75–0.85%. At $2 million or more, 1% means $20,000/yr — whether that's above market depends on the scope of planning, tax work, and behavioral coaching bundled into the fee. The better question: does the value of the financial advice exceed the cost?
What is a reasonable financial advisor fee?
Median AUM fee: 1% up to $1 million, declining with portfolio size (2024 Kitces Research). Flat-fee: $3,000–$4,500/yr. Hourly: $300/hr. Robo: 0.25%.
Compare your fee against these benchmarks at your portfolio tier — then compare the services you receive against what each model delivers.
Are financial advisor fees negotiable?
Yes — especially above $500,000. Kitces data shows 62% of firms charge at least 1% at $1 million, but only 32% do at $2 million, proving that fees decline with scale. Graduated schedules and flat-fee alternatives are common points of comparison in fee conversations.
How much should I pay an advisor for a $500K portfolio?
At 1% AUM: $5,000/year. A flat-fee alternative runs $3,000–$4,500/yr — a savings of $500–$2,000 annually. Above $500,000, flat-fee is usually the cheaper model. Use our calculator for exact long-term comparison — and factor in the value of the financial advice included at each price point.
How much should I pay for a $1 million portfolio?
At 1% AUM: $10,000/year. Kitces data shows median fees at this level trending toward 0.75–0.85%, which would bring annual cost to $7,500–$8,500. Flat-fee advisory runs $4,000–$7,500/yr. The crossover favors flat-fee above approximately $450,000.
Is my financial advisor ripping me off?
People search this because fee evaluation is genuinely complex. Check three things: (1) your total all-in cost versus Kitces median benchmarks by portfolio size, (2) the services you actually receive versus what you're paying for, (3) your advisor's Form ADV Part 2 fee schedule versus what they quoted you. If the services match the fee, you may not be overpaying — you may be getting exactly what comprehensive financial advice costs.
Are financial advisor fees tax deductible?
Advisory fees are not tax deductible for individual taxpayers. The Tax Cuts and Jobs Act suspended the deduction in 2018, and subsequent legislation made this permanent. Fees paid from IRA accounts may have different tax treatment — consult a tax professional for your specific situation.
How do I check my advisor's actual fee?
Download your advisor's Form ADV Part 2 from the SEC's IAPD database. Section 5 lists the fee schedule. Also check Form CRS for conflict disclosures and FINRA BrokerCheck for registration and disciplinary history.
Should I fire my financial advisor?
Not necessarily — and that impulse may itself be the wrong question. Advisors providing tax planning that may reduce tax drag by 0.50–0.70% annually, estate coordination, and behavioral coaching can add approximately 3% in value annually (Vanguard Advisor's Alpha). But if yours only manages a basic portfolio for 1%+, the fee may exceed the value of the service — investors in this situation sometimes evaluate flat-fee or robo alternatives to compare value, using the benchmarks above.
Fee-only vs fee-based — what's the difference?
Fee-only means income exclusively from client-paid fees — no commissions, no product sales, no referral payments. Fee-based means the advisor charges fees but may also earn commissions, creating potential conflicts. The names sound similar; the models are fundamentally different.
How much does 1% actually cost over 20 years?
On $500,000 earning 7% annually: without fees, the portfolio grows to approximately $1.93 million. With a 1% fee, it reaches approximately $1.60 million — a gap of over $330,000. The fee compounds against your returns every year, which is why a small percentage produces a large dollar impact. Whether that impact is justified depends on the financial advice delivered during those 20 years.
What do financial advisors actually do for 1%?
A comprehensive advisory relationship should include: investment management, tax planning and optimization, retirement projections, estate coordination, insurance review, and behavioral coaching during market volatility. If yours only rebalances a basic portfolio quarterly, 1% may exceed the value of the service delivered — an itemized service list from your advisor can reveal the full picture. If yours does all of the above, 1% may be the best money you spend.
Should I review my advisor fee after a divorce?
Yes. Divorce often reshapes your portfolio size, tax situation, and financial complexity — all of which affect whether your current fee is appropriate. If your assets decreased, your advisory fee decreased automatically, but you may now need more planning help (tax implications, QDRO processing, new estate documents) at a time when your portfolio is smaller. Many financial professionals recommend reviewing your fee-to-service ratio after major life changes like divorce.
Are financial advisor fees too high for retirees?
Retirees face a unique fee challenge: during accumulation, 1% may be offset by growth. In retirement, you're withdrawing — so that 1% comes directly from the money you live on. At a 4% withdrawal rate, a 1% advisory fee represents 25% of your annual retirement spending. Retirees should evaluate whether their advisor provides active tax management, required minimum distribution planning, and estate coordination — if those services are present, the fee may deliver strong value even in retirement. If not, some retirees find that flat-fee or hourly models align better with their distribution-phase needs — the right model depends on the services involved.
Are financial advisor fees too high for beginners?
For investors just starting out with portfolios under $250,000, a 1% AUM fee ($2,500/year on $250K) may be reasonable if the advisor provides comprehensive financial planning — budgeting, debt strategy, insurance review, and investment education. At this level, the equivalent hourly rate is approximately $83/hour, below market for a CFP®. However, a robo-advisor at 0.25% ($625/year) covers basic portfolio management, and an hourly advisor at $300/hour for occasional planning sessions may deliver more targeted value.
Why is "am I paying too much?" the wrong question?
Because it treats fee as the only variable. The right question is whether the value of financial advice — behavioral coaching, tax savings, estate coordination, planning discipline — justifies the fee. Vanguard estimates that value at approximately 3%, Russell Investments at 3.54%. A fee that looks high in isolation may look reasonable — or even cheap — once you account for what the financial advice delivers. The goal is alignment between cost and value, not the lowest possible price.
You started by wondering if you're paying too much
Now you know that's only half the equation. The benchmarks, the framework, and the questions in this article let you evaluate all three dimensions — what you pay, what you receive, and whether the value justifies the cost — with the same rigor.
Sometimes the answer is that the fee exceeds the value of the services delivered. Sometimes it's that you're getting more than you realized — and the fee is a bargain when measured against the behavioral mistakes, tax drag, and planning gaps it prevents. The important thing is that the question is now answerable.
The goal isn't to pay the least. It's to know what you're paying, understand what you're getting, and make sure the two are in balance. That clarity is something you deserve — and now you have the tools to get it.
Read next from the Truthifi blog
Truthifi is an investment monitoring platform — not a financial advisor, broker-dealer, or tax professional. The information in this article is educational and should not be construed as personalized financial advice or a recommendation regarding any financial advisor. All statistics cited reflect publicly available data as of February 2026. Consult a qualified professional before making financial decisions. Truthifi earns no revenue from advisor referrals, product commissions, or AUM fees.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with a qualified financial advisor before making investment decisions.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with a qualified financial advisor before making investment decisions.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with a qualified financial advisor before making investment decisions.
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