I Have $1.7M Invested With an Advisor and Pay a 1% Fee. Is That Too Much? Eric Reed Fri, September 18, 2026 at 12:00 AM PDT 6 min read ^GSPC SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. When it comes to financial advice, what you pay can vary based on what you get. An advisor who simply sets you up with a passive S&P 500 index fund might not be worth a 1% fee, while an advisor who helps you manage taxes and cash flow, plan for retirement and save for your child's college education is likely worth significantly more. For example, say you have $1.7 million invested with a financial advisor . A 1% fee is within the average range for the industry, but whether you're getting a good deal will depend entirely on your advisor's skill and services. If you're interested in working with a financial advisor but don't know where to start, try SmartAsset's free tool to connect with fiduciary advisors who serve your area. What Are Advisor Fees? Financial advisors have several different ways of structuring their fees. The most common types of fees are: Hourly : A fixed rate that's charged for every hour worked. Fixed : A predetermined amount that you pay for a specific service. Percentage of AUM : A variable rate based on a percent of the total assets under management (AUM), typically billed annually or quarterly. Commissions and performance fees: Commissions are fees your advisor receives for specific trades or transactions they make, while performance-based fees apply when they meet certain goals. Today, fees that are based on a percentage of a client's AUM are the most common type of advisory fee. A 2022 study by Kitces found that AUM fees were the majority revenue source for 82% of financial advisors surveyed. Here's how they work: say for example that an advisor charges 0.5% annually and they manage a $100,000 portfolio. At the end of the year, you would have paid $500 ($100,000 * 0.005) in management fees, which may have been taken directly from your account. Fixed and hourly rates are more common for advisors who perform specific services. For example, if a financial advisor does your taxes or makes a plan for college savings, they may bill by the hour or charge you a flat rate for those services. But if you need help finding a financial advisor, consider matching with one using this free tool . What Do You Get For Your Fees? Financial advisors can provide a range of services. Flat- and hourly-fee structures are generally built around specific deliverables. For example, some advisors will help you to create a tax strategy, a household budget or an overall financial plan. It's also common for a financial advisor to offer a comprehensive range of financial services based on what you need to achieve. Story Continues AUM-based fees are typically associated with ongoing portfolio management . Advisors who manage client...
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