How Much Does a Financial Advisor Cost Near DTC?

How Much Does a Financial Advisor Cost Near DTC?

The closer you get to retirement, the more critical it becomes to have comprehensive, objective financial advice. You may have purchased investments in the past and never paid the sales rep, except through (almost invisible) fees and commissions. For completely impartial advice, it is essential to consult with a fee-only fiduciary financial advisor. So, you probably wonder, how much does a financial advisor cost near DTC?

Many financial sales reps receive commissions, fees, or bonuses for selling specific products. These representatives should outline the details of these fees as part of their sales presentation. If, on the other hand, you prefer to work with a fiduciary financial advisor, they receive their compensation more directly and transparently. 

The cost of a fiduciary financial advisor near DTC depends on what services you require. If you want an analysis of your financial situation and recommendations for a retirement plan, they charge a flat fee. If you want more general advice, you may find an hourly rate works better. Ultimately, expect to pay similar rates as you would any high-quality professional, such as a lawyer. Most ongoing relationships with a financial advisor near DTC are funded as a percentage of the assets under management. So, the cost relates directly to the amount in your accounts. 

Of course, fees and compensation differ from one advisor to another. Discuss the details of the costs with your advisor before moving ahead to sign the contract. 

Financial Advisor Cost Near DTC – Fee Structure Options

The five major ways investment advisors charge for advisory services are:

  1. Percentage of assets under management – The rate may use a tiered schedule, so with more assets, the lower the percentage
  2. Hourly – Rates charged by the hour, usually for special projects or consultations
  3. Fixed fees – A set fee for a specific service, like creating a financial plan
  4. Commissions – Additional compensation when a sale is made
  5. Performance-based fees – Additional fees when a benchmark passes

Ask your advisor which one(s) of these types of fees they charge. Fee-only advisors only receive payment from fees paid directly by the clients – no commissions from the third-party companies representing the products. On the other hand, Fee-based advisors make their money from both their clients directly and commissions from the third parties. 

The financial advisor cost may not cover the entire bill when you open an account. In addition to the payment for the advisor, you will also need to pay custodial, brokerage, and other fees. For example, if your financial advisor puts exchange-traded or mutual funds into your account, you pay all the costs associated with the funds on top of the fee you pay to your advisor.

The costs add up quickly. The average fees in a mutual fund are 1.25%. However, a 1% mutual fund fee could cost you $590,000 over a 40-year investment period. So, when you discuss these fees with your financial advisor, make sure you ask about any possible additional costs.

Ultimately, how much your financial advisor will cost near DTC depends on your individual financial situation. Carefully clarify what fees you are responsible for before you move forward.