Key points
- Financial advisors can be paid through commissions, hourly, flat or advisory fees, or a combination.
- You can learn about advisor fees on Form CRS for brokers or Form ADV for investment advisors.
- Robo-advisor fees tend to be lower, but that’s because they give less personalized guidance.
Working with a financial advisor can present a dichotomy. On the one hand, you want the best guidance you can buy. On the other hand, you want to keep your costs as low as possible.
You can view it as an investment. You’re paying money in the hopes it will help you make even more money than you pay for the advisor long term. But for that to be true, you must ensure you get enough value relative to the fees you pay. And to do that, you must know what you pay and if the price is fair for the services you receive.
We’ll explain how financial advisors are compensated and what costs to expect when hiring one.
How financial advisors are paid
There are three common ways financial advisors are paid:
- Commissions: Advisors earn a commission for the products they sell to clients, such as life insurance policies or annuities.
- Hourly or flat fees: Advisors can charge…
