how much does a financial planner cost

How Much Does A Financial Planner Cost?

Thinking about hiring a financial planner? If so, you probably want to know how much one will cost you. Below you’ll get the answer to the common question, how much does a financial planner cost?

How Much Does A Financial Planner Cost?

The answer to this question depends on a few key factors. One is what you want the financial planner to do for you. Another is the type of financial planner you hire. And yet another may be how much money you have to invest. 

With that all said, let’s look at some average financial planner costs and fees to give you an idea of what you’re looking at. 

Assets Under Management

One common model is for financial planners to charge based on Assets Under Management. This is where they charge rates based on the amount of money they manage for you. Most of the time, the rate ranges from 0.25 percent to 1 percent annually. 

The fee type of these types of financial advisors is called Assets Under Management. Also known as AUM. In this model, a financial advisor who charges 0.25 percent per year will receive $25 per year for management fees if the client’s investment is $10,000. 

In AUM financial advising, costs will differ depending if you have a robo advisor or if you have a traditional in-person financial advisor. 

The average costs of AUM financial advising by way of Robo Advisor is generally less expensive. Most of the time, they only cost 0.25 percent to 0.50 percent of how much they manage for you.

On the other hand, AUM financial advising by way of a traditional financial advisor is a little more expensive. It costs range from 1 percent to 2 percent of how much they manage for you. 

Flat Fees

Alternatively, some financial advisors charge flat fees. These can be either per hour or per year. 

For financial advisors who charge flat annual fees, the average fee ranges from $1,500 to $7,500. 

Financial advisors who charge flat hourly fees charge around $200 to $400 per hour. 

There are also planners who will come up with a financial plan for you and charge a flat per-plan fee. The average cost of a flat per-plan fee ranges from $1,00 to $3,000. 

Should You Hire a Financial Planner?

Handling finances is not always an easy task. It takes time and a certain level of knowledge to do a good job investing and planning your family’s finances.

We believe with a little bit of information, most people can handle a lot of their investing and finances themselves. However, it’s not the right choice for everyone.

If you would prefer to have someone do it for you, then you should hire a financial planner. We prefer Fee Only financial planners. These are the planners you pay a flat fee to for their time.