How Much Does a Financial Advisor Cost?
A financial advisor is a professional who is able to help you manage your finances. While he or she will not help you with the day-to-day managing of your household money, they will help you invest your money, offer advice, as well as explain the latest trends in the wide world of finances to you. The cost of a financial advisor will vary on the financial advisor, your geographical location and the money that you are going to invest.
How much is it?
- Most certified financial planners are going to charge in different ways. These fees can be a fixed or hourly rate or can even be on commission.
- For planners that charge on a hourly basis, the rates can greatly range anywhere from $75 to as much as $500 per hour. This rate will widely depend upon the planner’s credentials, their demand and qualifications.
- For those looking for a first time consultation, most planners will recommend that you budget three to four hours of their time.
- According to the website AdviceIQ.com, the average rate for a financial advisor can cost $200 to $500 per hour, with a total of more than $5,000 for a complete consultation and planning session.
- For a fee based advisor, the financial advisor can charge a percentage based on your assets. This can range anywhere from 0.75% to 1.5%. For instance, if you had assets worth $100,000, the advisor would charge around $10,000 annually.
- Commissions, similar to the fee based advisors, would charge one to five percent on most investments such as mutual funds. There are also professionals that can mix fixed fees and into their commission fees.
What are the extra costs?
- Advisors that are high in demand can often charge a premium compared to those that work at brand name investment companies.
- For the most part, the more money you have and the more you want to invest, the more you will be charged for a financial advisor.
What is going to be included?
- A financial advisor can do everything from plan out your finances to investing your money for you. This can include monthly reports, how to manage your money, and tips on where you should manage your money in today’s market.
Tips to know:
- When choosing an advisor, it is best to find an advisor that is certified. While anyone can give financial advice, it is best to go with one that knows what he is doing.
- Do not settle on the first one that you come across. Instead, be sure to interview a handful of them to grasp a good idea on what services that they can provide as well as their history. Ask friends and coworkers for suggestions of advisors they use.
- Always get things in writing, especially if you are handing over your hard earned money. It is best to get everything in a nice, detailed report so that you know where your money is each and every month.
How can I save money?
- Highly consider learning how to invest on your own. According to this WhiteCoatInvestor.com study, do-it-yourselfers often find themselves making a lot more than professionals that manage money for individuals.
- Consider picking up a few investing books on the market that can teach you how to grow your money. Remember that growing money does not happen overnight. Learn the power of compounding interest and take advantage!
- If you are strapped for cash, consider checking with local non-profit agencies that can give you advice without charging you.