How much should I pay for a fee-only financial advisor?
By Seth Deal, CPA/PFS ·
It depends on how the advisor charges. In Kitces Research’s 2020 survey of more than 800 advisors, the median was $2,500 for a one-time plan, $250 an hour, $4,000 a year for an ongoing retainer, and 1% a year for investment management on portfolios up to $1 million. Fees were rising when that survey was done, so expect to see numbers at or above those today.
The five ways advisors get paid
Commissions are paid to the advisor by the company whose product you buy, like an annuity, an insurance policy or a mutual fund. You often don’t get a bill, because the cost is built into the product through things like sales charges or surrender fees. Some advisors are paid only this way. Others, often called fee-based, charge you a fee and also earn commissions.
Hourly means you pay for the time you use. It works well for a single question, like a second opinion on your survivor option.
A one-time plan is a set price for a complete plan you carry out yourself.
A flat yearly fee, sometimes called a retainer or subscription, covers the plan plus ongoing help. You pay the same whether your accounts go up or down.
A percentage of assets is charged on the money the advisor manages, usually with investment management included. The dollar amount grows as your balance grows.
The last four are the ways a fee-only advisor charges. None of them is automatically better. They fit different people.
What makes a plan cost more or less
For a Washington public employee near retirement, the price usually reflects how many moving parts there are. Two pensions in one household, a survivor option to model, DCP and IRA withdrawals to sequence, Roth conversions to time, and PEBB coverage to bridge until Medicare all take real work.
It also matters whether tax planning is included and who’s doing it. Some advisors leave taxes to your preparer. Others, including CPAs, build them into the plan.
And it matters whether you want help once or every year after.
What fee-only means
A fee-only advisor is paid only by you. No commissions on annuities, insurance or funds. That doesn’t make one price right, but it does mean the advice isn’t tied to what gets sold.
Every registered advisor has to describe their fees in a document called Form ADV Part 2A. You can look any firm up at adviserinfo.sec.gov and read it before your first meeting.
What I charge
I’m a CPA and fee-only fiduciary, and I don’t charge anything based on your pension.
A One-Time Plan starts at $3,000, with 30 days of follow-up questions after you get it. The Ongoing Plan is a flat fee, quoted up front, starting at $6,500 a year and billed quarterly. Neither requires moving your investments.
Wealth Management is a percentage of the assets I manage, with a maximum of 0.85% on accounts up to $1,000,000 and lower above that. With $500,000 or more under management, the planning fee is waived.
The first step is a free 45-minute Retirement Clarity Assessment on Zoom. I’ll tell you which option fits, and what it would cost, before you commit to anything.