Short answer: most advisors charge in one of four ways — a percentage of the assets they manage (often around 1% a year), a flat annual or monthly fee, an hourly rate, or a one-time project fee. The only fair way to compare them is to turn every quote into dollars per year.
The four common ways advisors are paid
- Asset-based fee (AUM). A percentage of the accounts the firm manages, often near 1% a year and usually lower on larger balances. The dollar cost rises as your portfolio grows, whether or not the work does.
- Flat fee or retainer. A set dollar amount per month or year for an agreed scope of planning. It does not move when markets move.
- Hourly. You pay for time, which suits a narrow question but can make people hesitate to call.
- Project fee. A one-time price for a plan or a specific decision, such as a rollover or Social Security review.
Turn every quote into dollars
A percentage feels small and a monthly number feels large, so people compare them backwards. Consider a hypothetical retiree with a $1,000,000 portfolio:
- A 1% asset-based fee is $10,000 a year — and $12,000 a year if the portfolio grows to $1.2 million.
- A flat planning fee of $400 a month is $4,800 a year, regardless of the portfolio's value.
Neither is automatically better. What matters is what you get for the dollars: planning, tax work, investment management, and how often you can actually reach the person.
What also counts as cost
- Fund expenses inside the portfolio, which are charged on top of any advisory fee.
- Commissions on annuities, insurance, or funds, if the advisor is not fee-only.
- Trading or platform fees, if any.
A fee-only advisor is paid only by clients — no commissions — which is why the quote you see is the whole picture. "Fee-based" sounds similar but means the advisor can also earn commissions.
What we charge
Lock Wealth Management is fee-only. Planning is a flat monthly fee: $250/month for Foundations, $400/month for Comprehensive, and $800/month for business owners. Investment management is optional and billed as an asset-based fee on the accounts we manage, walked through in your proposal before anything is signed. See Process & Fees or our fee-only financial planning page.
Want to check what you are paying today? Our fee check turns a percentage into dollars.
Schedule a complimentary consultation with Ben Loughery.
This article is for educational purposes only and is not individualized tax, legal, or investment advice. Examples are hypothetical illustrations, not actual clients, and do not guarantee any result. Lock Wealth Management is a registered investment adviser; registration does not imply a particular level of skill or training.
Frequently asked questions
- Is 1% a normal fee for a financial advisor?
- An asset-based fee around 1% a year is common, often with lower rates on larger balances. Convert it to dollars and compare it with what a flat-fee quote would cost for the same work.
- Is a flat-fee advisor cheaper than a 1% advisor?
- Often for larger portfolios, because a flat fee does not grow with your balance. For smaller portfolios a percentage can cost less. Compare both in dollars per year.
- What does fee-only mean for cost?
- A fee-only advisor is paid only by clients, with no commissions or product payouts, so the fee you are quoted is what the advice costs.
- Are fund expenses included in an advisor's fee?
- No. Fund expense ratios are charged inside the funds, on top of any advisory fee. Ask for both.
- How much does Lock Wealth Management cost?
- Planning is $250, $400, or $800 per month depending on the tier. Investment management is optional and billed separately as an asset-based fee on the accounts we manage.
