How much does it cost to speak to a financial advisor?

Wondering what it costs to get professional financial advice? You might be surprised—it’s more affordable and flexible than you think! Whether you’re preparing for retirement, managing investments, or creating a long-term financial plan, speaking with a financial advisor can offer valuable insight and peace of mind. But what should you expect to pay for their expertise?

Financial advisory fees can vary based on the type of service, the advisor’s experience, and how they structure their fees. Let’s dive into the details and explore how much it costs to consult a financial advisor, breaking it down so you can find the right option for your needs.

Types of Financial Advisors

Before we discuss costs, it’s important to understand the different types of financial advisors, as fees can vary depending on their qualifications and services offered.

• Fee-only advisors: These advisors charge a flat fee or hourly rate, without earning commissions from selling products. Their advice is usually unbiased, and they focus on your financial well-being.
• Commission-based advisors: These advisors earn money from the financial products they sell, such as insurance or mutual funds. Their advice may have some bias toward products that earn them a higher commission.
• Robo-advisors: Digital platforms that provide automated investment advice based on algorithms. While more affordable, robo-advisors lack the personalized touch of human advisors.

Now, let’s break down the cost structures for these types of advisors.

Common fee structures

The way financial advisors charge for their services can impact how much you’ll pay. Below are the most common fee structures:

1. Flat fees

Many advisors charge a one-time flat fee for a specific service, such as creating a financial plan or providing a one-time consultation. This option gives you transparency in pricing and a clear idea of what you’re paying for upfront.

• Cost range: $1,500 to $5,000 for a comprehensive financial plan

2. Hourly fees

Some advisors charge by the hour, which is ideal if you need short-term advice or a one-time consultation. Hourly rates vary by the advisor’s experience, but this option can be cost-effective for those who want to keep costs low.

• Cost range: $150 to $400 per hour

3. Assets Under Management (AUM)

The AUM model is where an advisor charges a percentage of your assets under management. For example, if you have $100,000 in investments and your advisor charges 1% annually, you’d pay $1,000 per year. This structure is more common with wealth management and long-term investment strategies.

• Cost range: 0.5% to 2% of assets annually

4. Commission-based fees

Advisors who earn commissions from selling financial products like insurance or investment funds typically charge no upfront fees. Instead, they’re compensated through the products they recommend. This fee structure may appeal to those who prefer to avoid direct advisory fees but may be less ideal for those seeking unbiased advice.

• Cost range: Varies based on the products sold, but usually between 3% to 6% on certain investments

5. Subscription-based

Some advisors offer subscription models, where you pay a monthly or annual fee for ongoing financial advice and support. This structure is becoming increasingly popular as it provides continuous access to an advisor without worrying about hourly rates or large upfront fees.

• Cost range: $100 to $300 per month

How to choose the right fee structure

Choosing the right fee structure depends on your financial goals and the complexity of your situation. Here are some quick pointers to help:

• For long-term, ongoing advice: The AUM or subscription model might be ideal if you want continuous support in managing your investments.
• For specific, one-time needs: If you need help with a particular issue, like retirement planning or debt management, flat fees or hourly rates could make the most sense.
• For lower costs: Robo-advisors or commission-based advisors offer more affordable solutions, though you may sacrifice personalized advice.

What are you really paying for?

It’s important to remember that when you hire a financial advisor, you’re not just paying for advice—you’re investing in your financial future. Here’s what you’re really getting:

• Expertise: A good advisor brings years of experience and knowledge in areas like retirement planning, tax strategies, and investment management.
• Customization: Advisors tailor their advice to your unique financial situation, goals, and risk tolerance.
• Peace of mind: By working with an advisor, you can feel confident in your financial decisions, knowing you have a professional in your corner.
• Accountability: An advisor helps keep you on track, regularly reviewing and adjusting your financial plan as your life and market conditions change.

Is speaking with a Financial Advisor worth the cost?

Many people wonder if paying for a financial advisor is worth it. The answer depends on your financial situation and goals. For some, the peace of mind and potential savings from better investment decisions or tax strategies far outweigh the cost of hiring an advisor. For others, DIY options like robo-advisors may suffice.

Here are a few factors to consider when deciding if it’s worth the cost:

• Your financial complexity: If you have multiple income streams, a large investment portfolio, or complex tax situations, hiring an advisor could be a game-changer.
• Time commitment: Financial planning takes time. If you’d rather focus on other areas of your life and leave the financial decisions to a professional, paying for an advisor might be worth the investment.
• Potential returns: A good advisor may be able to help you achieve better investment returns or reduce your tax liability, which could more than pay for their fees over time.

How to find an affordable Financial Advisor

While some financial advisors can be expensive, there are affordable options available. Here’s how to find one that fits your budget:

• Shop around: Don’t be afraid to compare fees and services from different advisors. Some may offer flexible payment plans or lower rates for specific services.
• Consider a consultation: Many advisors offer free initial consultations. This is a great opportunity to get a feel for their services and determine if it’s worth moving forward.
• Explore robo-advisors: If you’re just getting started with investing and don’t need highly personalized advice, robo-advisors offer a budget-friendly alternative.

Our approach: AUM fee structure at Guerra Wealth

At Guerra Wealth, we operate on an Assets Under Management (AUM) fee structure, which means our fees are based on the amount of assets we manage for you. This structure allows us to align our goals with yours—we only succeed when your investments grow.

• Our fees range from 0.50% to 1.75% of the assets we manage. The percentage depends on the size and complexity of your portfolio, ensuring you receive personalized advice tailored to your financial needs.

This structure makes our services accessible to a wide range of clients, whether you’re just starting to build your wealth or are looking to optimize an already substantial portfolio.

Ready to take the next step?

If you’re interested in learning more about how we can help you reach your financial goals, we’d love to talk! Click the link below to learn more about our services and book your complimentary appointment with one of our advisors today.