The cost of a fiduciary financial advisor depends on how the advisor charges, the services provided, the amount of assets being managed, and the complexity of the client’s financial situation. There is no single fee that applies to all fiduciary advisory relationships.
Investment advisers may charge fees based on a percentage of assets under management, an hourly rate, a fixed project fee, a subscription or retainer, or another disclosed arrangement. The SEC notes that asset-based fees are a common method of charging for advisory services and may be stated as an annual percentage of the assets an adviser manages.
The fee itself is only part of the evaluation. You should also understand what services are included, what other costs may apply, how the advisor is compensated, and what material conflicts of interest are disclosed.
For someone comparing fiduciary advisors, the more useful question may be:
What am I paying, what services am I receiving for that fee, and does the advisory relationship fit the financial decisions I need help managing?
What Does “Fiduciary” Mean When Discussing Advisor Fees?
Fiduciary status and advisor pricing describe two different aspects of an advisory relationship.
A fiduciary investment adviser(link to other blog) has obligations that include acting in the client’s best interest and addressing material conflicts of interest consistent with applicable fiduciary requirements. SEC guidance explains that investment advisers are expected to eliminate conflicts when appropriate or provide full and fair disclosure of material conflicts so clients can make informed decisions.
Being a fiduciary does not mean:
- The advisor has no conflicts of interest.
- One particular fee structure must be used.
- A particular investment result will occur.
- One advisor will be appropriate for every client.
- Higher or lower fees automatically indicate better advice.
Altus Wealth Management states that it operates under a fiduciary standard of care when providing advisory services. You can learn more about Altus’s fiduciary standard of care and how that responsibility relates to its advisory relationships.
Understanding the distinction between fiduciary responsibility and compensation structure can make it easier to evaluate advisor fees in context.
How Are Fiduciary Financial Advisors Paid?
There are several common ways an investment adviser may charge for professional services.
1. Assets Under Management Fees
An assets under management fee, often abbreviated as AUM, is calculated as a percentage of the assets an advisor manages.
The SEC describes asset-based fees as ongoing fees based on the value of assets in an investment advisory account. The fee is generally expressed as an annual percentage, although billing may occur quarterly or according to another schedule disclosed by the adviser.
For illustration only, a hypothetical 1% annual AUM fee would equal:
| Assets Under Management | Hypothetical 1% Annual Fee |
| $250,000 | $2,500 |
| $500,000 | $5,000 |
| $1,000,000 | $10,000 |
| $2,000,000 | $20,000 |
These numbers are examples only. They are not Altus Wealth Management’s fee schedule and should not be interpreted as an industry standard or recommendation.
Actual AUM fees can vary based on the advisory firm, account size, services provided, and terms of the client agreement.
An asset-based relationship may include investment management, financial planning, or a combination of services. For that reason, two advisors charging similar percentages may provide materially different scopes of service.
When reviewing an AUM fee, ask what the fee actually covers.
2. Hourly Advisor Fees
Some financial professionals charge an hourly fee for their time.
An hourly engagement may be structured around a defined planning need, such as:
- Reviewing retirement considerations
- Evaluating cash-flow decisions
- Reviewing an existing portfolio
- Discussing a financial transition
- Developing portions of a financial plan
- Evaluating competing financial priorities
The SEC recognizes hourly fees as one of the ways advisory clients may be charged.
Hourly pricing can make the relationship relatively easy to define because the client is paying for a specific amount of professional time. However, the scope may also be narrower than an ongoing advisory relationship.
Before beginning an hourly engagement, it is useful to understand what work is included, the estimated scope, and whether implementation or future reviews require additional fees.
3. Fixed or Project-Based Fees
A fiduciary advisor may also charge a fixed amount for a defined project.
Examples might include:
- Developing a financial plan
- Reviewing retirement scenarios
- Conducting an investment review
- Evaluating education funding considerations
- Reviewing financial issues associated with a business
- Organizing multiple financial planning priorities
The cost can vary depending on the complexity and expected amount of work.
Clients should understand whether the fixed fee covers only development of the initial analysis or whether it also includes implementation assistance, meetings, revisions, or ongoing monitoring.
4. Subscription or Retainer Fees
Some advisory firms use recurring subscription or retainer pricing.
Under this structure, clients may pay a monthly, quarterly, or annual amount for an agreed scope of ongoing financial advice.
The SEC has specifically addressed subscription-based advisory fees and notes that investors should evaluate the fee relative to the services they actually receive.
A retainer structure may be relevant when a client requires ongoing planning but the complexity of the relationship is not directly tied to the value of an investment portfolio.
How Much Would an AUM Fee Cost on $1 Million?
Because AUM pricing is percentage-based, it can be useful to translate the percentage into actual dollars.
For example:
- A hypothetical 75% fee on $1 million equals $7,500 annually.
- A hypothetical 00% fee on $1 million equals $10,000 annually.
- A hypothetical 25% fee on $1 million equals $12,500 annually.
These are mathematical examples only, not recommended fees or statements about what a particular advisor charges.
This exercise is useful because percentages can appear relatively small while representing a meaningful annual expense.
When comparing advisors, ask for the fee to be explained in both percentage terms and estimated dollar terms based on the assets and services involved.
What Is Included in a Fiduciary Advisor Fee?
The answer varies significantly by firm.
Some advisory relationships primarily focus on portfolio management. Others combine investment management with broader planning.
Services may include areas such as:
- Financial planning
- Investment management
- Retirement planning
- Cash-flow analysis
- Risk considerations
- Estate planning coordination
- Charitable planning considerations
- Education planning
- Planning around major financial transitions
At Altus, our approach to wealth management is based on the belief that financial planning and investment management should be considered together rather than as unrelated decisions.
Our financial planning process is intended to help organize financial priorities, goals, and considerations into a broader framework. Investment decisions can then be evaluated in the context of those objectives rather than viewed solely as isolated portfolio decisions.
This does not mean a particular planning or investment approach will achieve a specific financial outcome. Investments involve risk, and strategies that may be appropriate for one client may not be appropriate for another.
Does a Fiduciary Advisor Have to Be Fee-Only?
No.
“Fiduciary” and “fee-only” are not interchangeable terms.
Fiduciary describes a standard of conduct applicable to the advisory relationship.
Fee-only describes a method of compensation.
CFP Board, for example, imposes specific requirements on a Certified Financial Planner™ professional who represents their compensation method as fee-only. CFP Board also makes clear that compensation structures can create conflicts of interest that must be appropriately disclosed and managed.
This distinction matters because no compensation structure should automatically be interpreted as conflict-free.
A client evaluating an advisor may want to ask:
- How are you compensated?
- What fees will I pay directly?
- Are there additional investment-related expenses?
- What material conflicts of interest should I understand?
- How are those conflicts addressed?
- Where are these arrangements described in your regulatory disclosures?
The answers should be consistent with the advisor’s current Form ADV, Form CRS, advisory agreement, and other applicable disclosures.
Advisor Fees Are Not Necessarily Your Only Investment Cost
The stated advisory fee may not represent the full cost of investing.
The SEC notes that investors may pay expenses associated with investments in addition to the fees paid directly to an adviser. These may include costs associated with mutual funds, exchange-traded funds, variable annuities, custody, transactions, or other investment products and services.
Depending on the investments involved, potential expenses may include:
- Fund expense ratios
- Transaction charges
- Custodial expenses
- Third-party management expenses
- Product-specific costs
- Other account expenses
The applicable costs, liquidity characteristics, tax treatment, and risks can vary by investment.
For this reason, it can be useful to ask an advisor:
“Beyond your advisory fee, what other costs should I understand?”
That question provides a more complete view than focusing only on the headline advisory percentage.
How Should You Compare Fiduciary Financial Advisor Costs?
Cost should be evaluated together with scope.
Before comparing two fee schedules, determine whether you are comparing similar services.
Questions to consider include:
- What services are included in the advisory fee?
- Is financial planning included?
- Is investment management included?
- Is the relationship ongoing or project-based?
- How is the fee calculated?
- Are there minimum account or fee requirements?
- What investment-related costs are separate?
- What material conflicts are disclosed?
- Who will be providing the advice?
- How will the advisor learn about changes in your financial circumstances?
- How often is the financial strategy reviewed?
- Are tax and estate considerations coordinated with the client’s qualified tax and legal professionals?
An advisor’s regulatory disclosures can also provide important information about services, compensation, disciplinary information, and conflicts.
Altus Wealth Management is currently listed by the SEC’s Investment Adviser Public Disclosure database as an SEC-registered investment adviser. SEC registration does not imply a particular level of skill or training.
Is a Lower Fiduciary Advisor Fee Better?
Not necessarily.
A lower fee means the client pays less for the services covered by that fee. It does not, by itself, establish whether one advisory relationship is more appropriate than another.
Consider a hypothetical example.
One advisor may charge an asset-based fee and provide investment management only.
Another advisor may charge a different fee and provide investment management together with financial planning and ongoing financial coordination.
Neither structure can be evaluated fairly from the percentage alone.
Likewise, a higher fee does not establish better advice, better service, or better investment results.
A more balanced evaluation considers:
Cost + services + experience + investment approach + planning scope + conflicts + client circumstances.
The objective is to understand whether the overall relationship aligns with what you actually need.
When Might Ongoing Financial Advice Be Appropriate?
An ongoing advisory relationship may be worth considering when financial decisions become increasingly interconnected.
Examples can include:
Approaching Retirement
Retirement may involve decisions concerning income needs, investment risk, withdrawal planning, Social Security, healthcare costs, and tax considerations.
A structured planning process can help organize these decisions so they can be evaluated together.
Managing Increasing Financial Complexity
Complexity may increase when someone has multiple investment accounts, employer retirement plans, business interests, real estate, inherited assets, charitable goals, or estate planning considerations.
Coordinating these areas may help the client better understand how one financial decision could affect another.
Experiencing a Major Financial Transition
Career changes, business sales, inheritance, retirement, divorce, or the loss of a spouse can create financial questions that require careful analysis.
Professional financial advice may help clients evaluate their available options based on their individual circumstances.
Wanting Financial Planning and Investment Management to Work Together
Altus believes investment strategy should be considered in the context of the financial plan it is intended to support.
Our approach to investment management considers portfolio decisions alongside factors such as client objectives, time horizon, and risk considerations.
Investing involves risk, including the possible loss of principal. No investment strategy can guarantee a profit or prevent loss.
What Does Altus Wealth Management Charge?
Altus Wealth Management’s advisory fees, financial planning charges, billing practices, and other compensation arrangements should be described using the firm’s current Form ADV, Form CRS, and applicable client agreement.
To make sure you’re viewing our most recent fee structure, see our current Form ADV, located in the footer of our website.
***Updated to match the language we discussed, please review***
Frequently Asked Questions About Fiduciary Financial Advisor Costs
How much does a fiduciary financial advisor cost?
There is no single fiduciary advisor fee. Advisors may charge an asset-based fee, hourly fee, fixed fee, subscription, retainer, or another disclosed form of compensation. The amount depends on the advisor, services, account size, and scope of the engagement.
What is an AUM fee?
An AUM fee is a fee based on the assets an adviser manages for a client. It is generally expressed as an annual percentage, although the timing and method of billing depend on the advisory agreement.
How much is a 1% financial advisor fee?
A 1% annual fee would equal $5,000 on $500,000 of assets, $10,000 on $1 million, and $20,000 on $2 million. These are mathematical illustrations and not a recommended fee schedule.
Are fiduciary advisors more expensive?
Fiduciary status does not establish a particular price. Costs depend on the advisor’s compensation structure and services provided.
Does fiduciary mean fee-only?
No. Fiduciary describes a standard of conduct, while fee-only describes a compensation method. The terms should not be treated as interchangeable.
Are investment expenses included in an advisor fee?
Not necessarily. Certain investments and accounts may carry separate expenses in addition to the advisory fee. Clients should review both advisor compensation and other applicable investment costs.
What should I ask a fiduciary advisor about fees?
Ask how the advisor is compensated, what services are included, what you may pay in estimated dollar terms, what additional expenses may apply, and what material conflicts of interest are disclosed.
When should I consider working with a fiduciary financial advisor?
You may want to explore professional advice when your finances become more complex, you are approaching a significant financial transition, or you want help coordinating investment decisions with a broader financial plan. Whether ongoing advice is appropriate depends on your individual circumstances.
Gain Clarity About the Cost of Financial Advice
Understanding how much a fiduciary financial advisor costs requires more than comparing percentages.
The fee should be considered alongside the services provided, investment-related expenses, compensation structure, conflicts of interest, and the complexity of your financial circumstances.
At Altus Wealth Management, we believe clients should understand the structure of the advisory relationship before deciding whether it is appropriate for them.
If you are looking for clarity about your options, a conversation can help you understand the services available, the applicable costs, and how those considerations may relate to your financial circumstances.
Start a conversation and build a plan informed by your goals and financial situation.
This material presented by Altus Wealth Management (“Altus”) is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Facts presented have been obtained from sources believed to be reliable, however Altus cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Altus does not provide legal or tax advice, and nothing contained in these materials should be taken as legal or tax advice. Advisory services are only offered to clients or prospective clients where Altus and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Altus Wealth Management unless a client service agreement is in place.