Choose an advice-only planner if you’re comfortable placing your own trades and want advice on your whole financial life for a set price. Choose a full-service planner, one who also manages your investments, if you want the investing handled for you. US fee-only firms that list no percentage-of-assets fee charge a median $5,000 a year for ongoing planning, $1,950 for a one-time plan or $300 an hour. A full-service planner usually charges 1% of the assets they manage, which costs more than $5,000 a year once your investments pass $500,000.
“Full-service” has no legal definition. Here it means a planner who gives advice and also runs your investment accounts. For the detail on advice-only planning on its own, see our advice-only guide.
The two side by side
| Advice-only | Full-service | |
|---|---|---|
| What the planner does | Advises; you carry it out | Advises and manages your investments |
| Access to your accounts | None | Discretionary authority to trade the accounts they manage, which stay at a brokerage in your name |
| Typical price (US median) | $5,000 a year ongoing, $1,950 for a plan, $300 an hour | 1% of assets a year on the first tier, middle half 0.95% to 1% |
| Your time | Trades, rebalancing, withdrawals | Little beyond meetings |
| What the planner gains if you invest more with them | Nothing | A bigger fee |
| How common | 37% of US fee-only firms, 83% in Canada, list no asset-based fee | 62% of fee-only firms offer a percentage of assets |
Some firms sit in between: they manage investments for a flat fee, or offer planning-only clients a lower price. Ask any firm which of its services you’d actually be buying.
What each costs at your balance
Yearly cost by balance, using the median ongoing fee at US fee-only firms with no asset-based fee
Source: Wellspent fee report data
Data
| Assets | 1% of assets | $5,000 flat fee |
|---|---|---|
| $0 | $0 | $5,000 |
| $50K | $500 | $5,000 |
| $100K | $1,000 | $5,000 |
| $150K | $1,500 | $5,000 |
| $200K | $2,000 | $5,000 |
| $250K | $2,500 | $5,000 |
| $300K | $3,000 | $5,000 |
| $350K | $3,500 | $5,000 |
| $400K | $4,000 | $5,000 |
| $450K | $4,500 | $5,000 |
| $500K | $5,000 | $5,000 |
| $550K | $5,500 | $5,000 |
| $600K | $6,000 | $5,000 |
| $650K | $6,500 | $5,000 |
| $700K | $7,000 | $5,000 |
| $750K | $7,500 | $5,000 |
| $800K | $8,000 | $5,000 |
| $850K | $8,500 | $5,000 |
| $900K | $9,000 | $5,000 |
| $950K | $9,500 | $5,000 |
| $1M | $10,000 | $5,000 |
| $1.1M | $10,500 | $5,000 |
| $1.1M | $11,000 | $5,000 |
| $1.1M | $11,500 | $5,000 |
| $1.2M | $12,000 | $5,000 |
| $1.3M | $12,500 | $5,000 |
| $1.3M | $13,000 | $5,000 |
| $1.4M | $13,500 | $5,000 |
| $1.4M | $14,000 | $5,000 |
| $1.4M | $14,500 | $5,000 |
| $1.5M | $15,000 | $5,000 |
| $1.6M | $15,500 | $5,000 |
| $1.6M | $16,000 | $5,000 |
| $1.6M | $16,500 | $5,000 |
| $1.7M | $17,000 | $5,000 |
| $1.8M | $17,500 | $5,000 |
| $1.8M | $18,000 | $5,000 |
| $1.9M | $18,500 | $5,000 |
| $1.9M | $19,000 | $5,000 |
| $1.9M | $19,500 | $5,000 |
| $2M | $20,000 | $5,000 |
| $2M | $20,500 | $5,000 |
| $2.1M | $21,000 | $5,000 |
| $2.1M | $21,500 | $5,000 |
| $2.2M | $22,000 | $5,000 |
| $2.3M | $22,500 | $5,000 |
| $2.3M | $23,000 | $5,000 |
| $2.4M | $23,500 | $5,000 |
| $2.4M | $24,000 | $5,000 |
| $2.5M | $24,500 | $5,000 |
| $2.5M | $25,000 | $5,000 |
| $2.5M | $25,500 | $5,000 |
| $2.6M | $26,000 | $5,000 |
| $2.6M | $26,500 | $5,000 |
| $2.7M | $27,000 | $5,000 |
| $2.8M | $27,500 | $5,000 |
| $2.8M | $28,000 | $5,000 |
| $2.9M | $28,500 | $5,000 |
| $2.9M | $29,000 | $5,000 |
| $3M | $29,500 | $5,000 |
| $3M | $30,000 | $5,000 |
At $300,000, a full-service planner at 1% costs $3,000 a year, less than the advice-only median. At $1 million it’s $10,000, double. Many firms lower the rate on larger balances, which narrows the gap without closing it; see whether 1% is too much for a worked schedule.
Two things sit outside both prices. You pay the costs of the funds you hold either way (their expense ratios), so compare advice fees with advice fees. And with advice-only, the investing is your job, so your own time and follow-through are part of the cost.
One pattern in the data is worth knowing. Ongoing planning costs more at firms with no asset-based fee, a median $5,000 a year, than at firms that also charge a percentage, $3,600. At an advice-only firm, the planning fee is all the firm earns from you.
What the percentage pays for
Before you decide you don’t need management, list what it covers and ask which of these you’d do yourself:
- choosing funds and setting the mix of stocks and bonds
- rebalancing when markets move
- harvesting losses to offset taxes on gains
- placing investments in the accounts where they’re taxed least
- setting up retirement withdrawals and required minimum distributions
- holding steady, and keeping you steady, in a bad year
If you’d do most of these yourself with a few index funds, an advice-only planner covers the rest. If you know you’d skip them, the percentage buys real work.
When advice-only is the better choice
- Your investments are large and simple. On $1.5 million in a few index funds, paying 1% means $15,000 a year, mostly for upkeep you could do yourself in a few hours a year.
- Much of your money can’t be moved to an advisor. A workplace 401(k), a pension, a business, rental property. An advice-only planner advises on all of it for one price.
- You want advice with no pull toward keeping money invested. The SEC suggests firms with asset-based fees tell clients they may have an incentive to encourage you to increase the assets in your account. That matters when the question is paying off a mortgage, buying an annuity or funding a business.
- You’re still building savings and below many firms’ asset minimums.
When full-service is the better choice
- You don’t want to place trades, rebalance or plan withdrawals, and won’t.
- You’re retiring and drawing down savings. Turning a portfolio into a paycheck, year after year, is detailed work that suits someone who has trading access.
- You’ve sold in a downturn before. Handing over the investing removes the temptation to time the market.
- Your balance is below the crossing point. Under about $500,000, 1% can cost less than advice-only ongoing planning and includes the management.
- Someone in your household may need to take over. A full-service firm keeps the accounts running if the person who manages money can’t.
A middle path
Plenty of people mix the two:
- Advice-only planner plus simple investing. One target-date fund or a low-cost robo-advisor handles rebalancing, and the planner handles everything else.
- Full-service for part of your money. Have a firm manage the IRA you’ll draw from first, and run the rest yourself. You pay the percentage only on what they manage.
- Start advice-only, add management later. When you’re close to retirement or tired of doing it, move to a firm that manages money.
In Canada, where advice-only is the norm, planners who don’t recommend specific investments may not be registered with a securities regulator, so check their planning credential. The advice-only guide explains how.
Questions to ask before you choose
- Will you hold, manage or trade any of my accounts?
- If you don’t manage investments, will you recommend specific funds and help me place the trades?
- If you do, which accounts would the fee apply to, and what would I pay this year in dollars?
- Do you offer planning without management, and at what price?
- Do you or your firm earn anything from the products you recommend?
A fee-only planner answers no to the last one. Look the firm up on the SEC’s adviser search, where Form ADV shows how it’s paid and whether it manages assets. Read the glossary entries for advice-only planning and an AUM fee, and compare a flat fee with a percentage of assets. Then browse flat-fee advisors, advisors for retirees or fee-only advisors in Ontario in the public graph.