How to Assess an Advisor’s Fee (Are You Getting Your Money’s Worth?)

As quoted in ComparisonAdviser’s article titled “Is a 1% Financial Advisor Fee Worth It?”

Hiring a financial advisor is one of the most important financial decisions you’ll make. And let’s be honest — it’s not cheap.

If you’re like most people, you’ve probably wondered at some point:

“What am I actually getting for this fee?”

You’re not alone, and you’re smart to ask.

The financial advisory world is full of different fee structures — X% of assets under management (AUM), flat fees, hourly billing, subscription models — but none of it means anything unless you can figure out if the value you’re getting lines up with the price you’re paying.

Let’s walk through this clearly, without the industry jargon or sugar-coating.

Why Advisor Fees Matter More Than You Think

Advisor fees aren’t just about the number itself.

They tell you a lot about how your advisor runs their practice, where their incentives are, and what kind of relationship you’re stepping into.

If an advisor is getting paid no matter what, there’s a real risk they become less proactive over time.

If an advisor ties their fees clearly to specific work and deliverables, expectations stay sharp — and you’re more likely to get meaningful service, year after year.

Understanding fees isn’t about being difficult. It’s about protecting yourself and making sure you’re entering into a relationship where the service matches the price.

The Straightforward Versions of How Advisors Charge

You don’t need a finance degree to understand the basic structures advisors use.

Here’s the quick breakdown:

Assets Under Management (AUM):

You pay a percentage of the money they manage for you — usually about 1%.

Example: $500,000 portfolio = about $5,000 per year.

Flat Fee:

You pay a set dollar amount for service, regardless of how much you have invested.

Example: $3,500 a year for planning and investment oversight.

Hourly Fee:

You pay for the advisor’s time as needed. Fine for a one-off project, but costs can spiral if your needs are ongoing.

Subscription Fee:

A newer model where you pay a monthly or quarterly fee for ongoing advice and access.

Each structure has its pros and cons. But the real question isn’t how you’re paying — it’s what you’re getting for it.

What You Should Expect (And What You Shouldn’t)

One of the biggest mistakes people make is assuming that a 1% fee means they should get every possible service under the sun. That’s not how high-quality financial advising works.

In fact, if you find a firm claiming they do everything — investment management, comprehensive financial planning, tax filing, estate documents, insurance work, and more — all bundled into one flat fee, you should be skeptical.

Think about it like a buffet. You can have a little bit of everything — but nothing is going to be exceptional. It’s the same with financial advice.True specialization, deep expertise, and meaningful customization don’t come bundled in endless services for one price. They require focus, experience, and time.

When you pay 1%, you should expect focused, specialized service appropriate to your situation.If you’re retiring soon, you should be getting expert retirement income strategy and tax management. If you’re younger, it might be goal-oriented planning and basic investment help. You’re paying for attention and alignment with your goals — not for every conceivable service on a checklist.

If you’re expecting to get “everything” at a high level for a basic 1% fee, you’re setting yourself up for disappointment.

Instead, think critically:

• Are they solving my problems?
  
• Are they bringing specialized insight to my stage of life?
  
• Are they giving personalized advice, not just templated recommendations?
  

How to Tell if the Fee Matches the Value

When you’re assessing an advisor’s fee, it’s not enough to ask, “Is this 1% fair?”

You have to dig deeper: “Is what I’m getting for this fee actually moving my financial life forward?”

Start by asking for clear specifics. What does their service model actually include? How often are they reviewing your plan? How often do you meet? Are tax projections and planning part of the relationship, or just investment management?

Specialization also matters. If you’re a retiree, a specialist in retirement income planning will likely offer far more value than a generalist handling young professionals, retirees, and business owners all at once.

Look at their credentials and history. Are they a CFP® professional? How many years of real-world client experience do they have? Do they act as a fiduciary?

Finally, use some common sense: If you avoided even one major financial mistake because of their advice, would it justify their fee for years to come? Often, the best advisors protect you from risks you never even knew you were taking.

When 1% Stops Making Sense (It’s About Value, Not Just Price)

There’s nothing sacred about a 1% fee. It’s just common.

The real question isn’t “Am I paying too much?”. It’s “Am I getting real value for what I’m paying?”

For many people — especially those in complex stages like retirement, business transitions, or major life changes — a 1% fee is easily justified if it comes with tailored advice, proactive strategy, and real-time adjustments.

But if your advisor’s service stays generic — basic asset allocation, light communication, little proactive tax or income planning — then even 0.5% might be too expensive.

This question becomes even more important as your portfolio grows.

A $3M portfolio paying $30,000 a year needs to be getting $30,000 worth of value: complex tax work, concentrated position management, charitable planning, estate transition strategies. If you’re getting a one-size-fits-all model, it’s time to reassess the relationship.

Again — the answer isn’t automatically, “Get a lower fee.”. The answer is, “Make sure your advisor’s services scale with your situation and complexity.”

Lower Fees Don’t Automatically Mean Better Value

It’s easy to get caught up in the race to the bottom on advisor fees. There’s a huge marketing push to make lower prices seem like better deals.

And to be clear — many advisors slashing fees truly have good intentions. They want to reach people. They want to make advice more accessible. That’s admirable.

But cheap doesn’t always mean smart.

When you have a serious toothache, you’re not googling “cheapest dentist near me.”

You’re looking for:

• Solid reviews
  
• Proven experience
  
• Professional credentials
  
• A reputation for solving real problems
  

You’re not trying to save a few dollars. You’re trying to fix the problem right, the first time.

Financial advice should be approached the same way. You’re not paying for hours. You’re paying for judgment, specialization, and real-world expertise that helps you avoid financial mistakes — the kind that cost a lot more than an advisor’s fee.

Don’t chase the cheapest advisor. Find the advisor who’s worth what they charge.

Final Thought: Pay for Focus, Not Flash

Choosing an advisor isn’t about finding the lowest price. It’s about finding the right partner.

Someone who understands your goals.
Someone who specializes in helping people like you.
Someone whose expertise and focus justify every dollar you pay.

When you find that, the fee rarely feels expensive. It feels like an investment in your future — and it’s worth every penny.