Costs depend on the type of financial advisor you use, as well as how they get paid. Think about what works best for you, and then consider how potential advisors get paid.
Hourly or Flat Rate
Some financial advisors charge an hourly rate; others, a flat rate. In many cases, these types of fees are charged by someone like a financial planner or coach who helps you overcome some sort of problem with money or put together a plan. There could be an hourly rate for time spent. Or there might be a flat rate for something like creating a financial plan for you.
You also see flat rates for things like tax preparation and maybe an hourly rate for financial advice.
Assets Under Management
One of the most common ways advisors charge is by assets under management. Basically, if a financial advisor manages your money for you and helps you with investments, they will take a percentage of your account value. For human advisors, this might be around 1% annually of your assets under management. Robo advisors often charge less, usually between 0.25% and 0.50%.
Some financial advisors receive a commission. Instead of paying the fee, they get a kickback when you use the products they recommend. For example, they may receive a commission for selling you a specific mutual fund or insurance policy. While this isn’t necessarily bad, you do need to be careful to watch for conflicts of interest.
Some advisors get paid multiple ways. For example, you may have someone who manages your portfolio and charges for assets under management but who also charges a separate flat rate if you have them make a financial plan for you.