The uncertainty involved in hiring a wealth planner makes it unsettling to take the jump. You’re investing in yourself and in the future, so you shouldn’t overpay in advisor fees.

What are Advisor Fee Structures?

Value is in the eye of the beholder. But what about when you, as the beholder, have no idea how to value something? The uncertainty involved in hiring a wealth planner makes it unsettling to pull the trigger. However, you’re investing in yourself and your future, so you shouldn’t overpay.

If you’ve never worked with a wealth planner before, understanding how they get paid may be confusing. The advisor fee system can be vague and complicated, and you might be surprised by what it may cost.

In simple terms, advisors charge based on the scope of service and complexity of the work involved. Every advisor has their own way of charging, and most likely, the amount varies from client to client. You should only be paying what’s fair for you and your unique situation.

To shed some light on the options and averages, advisors in Zoe’s network generally charge in two primary ways: Flat Fee or Assets Under Management (AUM.) Based on the type of fee they charge, there are specific questions that you should ask your advisor to make sure your best interests are considered. Let’s discuss the various costs of each category and the relevant questions you should ask your advisor.

The Two Main Ways Advisors in Zoe’s Network Get Paid

Assets Under Management (AUM)

Another way to think about fees is a percentage based on the total market value of your investments. While calculated as a percentage of your assets, an AUM fee differs from commissions. Whereas commissions are service charges based on a transaction (e.g., buying or selling mutual funds or stocks), AUM fees are a percentage based on the value of your investments. Under this structure, the fee moves with the account’s value: it rises when the account grows and falls when it declines. This ties part of the advisor’s pay to account value, but it also creates conflicts of interest, such as an incentive to keep assets under management rather than recommend using them elsewhere (for example, paying down debt). For example:

$500,000 * 1% = $5,000

$400,000 * 1% = $4,000 OR $600,000 * 1% = $6,000

With the AUM structure, there may also be ‘breakpoints’ where your fee rate decreases as the value of your account increases. The percentage goes down at each breakpoint, but the dollar fee can still go up as assets grow. Using the illustrative schedule below, an account charged 1% could move to 0.90% once it passes $1,000,000. Illustrative schedule (hypothetical; not any specific advisor’s fees):

$0-$500,000 = 1.25%

$500,000 - $1M = 1%

$1M - $2M = 0.90%

Over $2M = 0.80%

Advisors post their AUM fee schedule publicly in their firms’ Form ADV, and the advisor can calculate the rate in one of two ways:

• Flat Percentage Tiers: Advisors can charge a flat percentage based on the total value of your investments. Every dollar you invest is charged at the same rate. If you have $850,000 to invest, using the fee schedule above, your fee would be 1% * $850,000 = $8,500

• Graded Percentage Tiers: Advisors can charge a blended rate on the value of your investments, so the more money you add, the smaller the percentage is. However, the catch is that the lower rate doesn’t apply to all dollars. If you have $850,000 to invest, using the fee schedule above your fee would be (1.25% * $500,000) + (1% * $350,000) = $9,750. The effective net fee would be a blended 1.147%.

With this method, it’s essential to ask your advisor what the effective fee would be. This structure is similar to how tax brackets work; the first dollars you invest will likely be charged a higher rate.

Flat Fee

A flat fee is a fixed cost you pay for the service versus a fixed percentage. The advisor charges a fee based on the complexity, time, and scope of the work, not the sale of a product. Flat fees come in different forms; here are the most common ones:

• Hourly - The median is about $300 per hour (Kitces Report, 2024 data). This structure is easy to explain, as it’s by the number of hours spent on your financial plan multiplied by the advisor’s hourly rate. The downside? You may not know the time required to build your plan upfront. As such, the final bill may come as a surprise.

Questions for the Advisor: What is the least amount of hours you’ve billed? What is the most? What is the average amount of time it takes to build a financial plan? What should I expect in terms of total cost?

• One Time Project - The median is about $3,000 per engagement (Kitces Report, 2024 data). To help avoid any sticker shock, choosing a project-based service provides transparency regarding the upfront cost. This financial planning service will be limited in scope, including creating a plan and developing recommendations. However, this offering does not typically include the plan’s implementation or ongoing monitoring. Meaning you will get your financial plan but must execute and monitor it independently.

Questions for the Advisor: What is the expected timeframe for this project to be completed? Can I come to you with questions after our engagement has ended?

• Subscription Model - The average is about $595 per month (Envestnet, 2026 State of Financial Planning Fees, May 2026). Think of this as a more expensive yet more meaningful Netflix or gym membership. You may have a monthly or quarterly subscription fee, providing you ongoing access to your advisor as much as needed. This structure typically includes creating a financial plan and the continuous monitoring and implementation of this plan.

Questions for the Advisor: How often should I expect proactive communication (e.g., monthly, quarterly)? What do you envision the first year working together to look like? Does the rate change over time or stay the same?

• Annual Retainer - The average is about $6,815 per year (Envestnet, 2026 State of Financial Planning Fees, May 2026). Think of the annual retainer as a combination of project and subscription models. You get a plan similar to project-based work for a stated rate, but you also get access to the advisor for a full year to help with questions, updates, and guidance around implementation. So you pay a one-time project fee upfront and a subscription fee moving forward.

Questions for the Advisor:Do most clients continue this service after the 1st year? Does this fee change over time? How often will we be in communication regarding the plan’s performance?

How To Choose The Advisor Fee Model That Works For You

Every individual is unique and has a distinctive financial situation. Basing your fee model on someone else’s experience could end up being less advantageous than you think. Your advisor search should focus on finding the advisor who best fits your needs, and this includes accommodating your preferences when it comes to your fee structure.

Advisors can offer many fee structures. Some offer more than one (for example, AUM and flat fee) and can explain which they typically use for clients in similar situations.

Lastly, you need to understand the quoted fees in dollar terms rather than solely percentages to make an informed decision. For example, if your quote is 1% of the investable assets, calculate what that translates to (1% * $500,000 = $5,000), so you know what you will owe. Similarly, if your quote is $400 per month, what percentage of your income will that be ($400 × 12 = $4,800 ÷ $250,000 annual income = 1.92%)?

Every compensation model carries conflicts of interest. Commissions can create an incentive to recommend transactions or products; asset-based fees can create an incentive to grow or retain assets under management; hourly fees can create an incentive to bill more time. Advisers must disclose material conflicts in Form ADV Part 2A, available at adviserinfo.sec.gov.

Zoe screens advisors before admitting them to its network. Screening does not guarantee an advisor’s fees, performance, or conduct.