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How Much Does a Financial Advisor Cost?

In a society where people now turn to social media for help deciding everything from paint colors to a newborn’s name, it’s unbelievable that so many of us continue to entrust our financial futures to, well, ourselves.

This is especially true when you consider that working with a financial advisor can net investors increased annual returns.  According to a Fidelity Study, financial advice can add between 1.5% and 4% to account for growth over extended periods.¹ 

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After you choose your state and answer a few questions, you can compare up to three advisors who serve your area and decide which to work with.

So then, why do so many individuals continue to manage their retirement plans alone?

For many, it’s the assumption that they cannot afford financial advice. The reality is that the fees financial advisors charge are lower than investors often think. Meanwhile, the insights that financial advisor’s add often far surpass their cost.

But let’s get down to the real numbers: A 2021 AdvisoryHQ study found that the average AUM fee for a $50,000 account was about 1.18% or just $590.² Some Advisors also charge hourly fees of between $100 - $300 and between $1000 - $3000 for special projects.

Another challenge that often prevents aspiring retirees from getting professional financial advice is that many Americans simply don’t know where to find a financial advisor, let alone how to evaluate their proficiency and pricing. 

But look no further: SmartAsset's free advisor matching tool makes it easy to find a vetted advisor so you can make an informed decision about who to work with. And, all of the advisors in SmartAsset’s platform are registered fiduciaries, meaning they're obligated to act in your best financial interest. The whole process only takes a few minutes.

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Advisor Fees vs. Average Returns

Sources:

1. ”Why Work With a financial advisor?”, Fidelity (11/1/2021)

https://www.fidelity.com/viewpoints/investing-ideas/financial-advisor-cost

2. AdvisoryHQ study (Jul. 2021)

The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Your results may vary. Past performance is not a guarantee of future results. Please follow the below links to see the methodologies employed in the Fidelity and AdvisoryHQ studies. https://www.fidelity.com/viewpoints/investing-ideas/financial-advisor-cost

https://www.advisoryhq.com/articles/financial-advisor-fees-wealth-managers-planners-and-fee-only-advisors/

SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser.  SmartAsset’s services are limited to referring users to third party registered investment advisers and/or investment adviser representatives (“RIA/IARs”) that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. SmartAsset does not review the ongoing performance of any RIA/IAR, participate in the management of any user’s account by an RIA/IAR or provide advice regarding specific investments. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors.

This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.

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