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If you're thinking about hiring a wealth manager, one of the first questions that might come to mind is, “How much is this going to cost me?”
Wealth management fees can vary a lot depending on how much money you have, the services you need, and the firm you choose. Some charge a flat annual fee, others take a percentage of your assets, and some mix it up.
This guide helps break down what these fees look like—and what you're actually paying for.
Wealth Management Fees: What You Need to Know
Wealth management fees aren’t always as simple as they seem. Some investors assume a flat rate, while others are surprised to find layered costs for different services.
Here’s how to decode the fee structures you’re likely to encounter—and what they mean for your bottom line.
1. Assets Under Management (AUM) Fees
The Assets Under Management (AUM) model is the most popular. Here, you pay a percentage of the assets your advisor manages, typically around 1% annually.
For example, if you have $1 million invested, that’s $10,000 a year in fees. Some firms offer tiered pricing: the first $500,000 might be charged at 1%, the next $500,000 at 0.75%, and so on.
This structure works well for investors who want continuous portfolio monitoring, rebalancing, and access to a team of experts.
2. Flat or Hourly Fees
Some investors prefer paying a fixed annual fee or an hourly rate, especially for specific services like estate planning or retirement projections.
For instance, a flat fee of $3,000 per year might cover regular meetings and financial planning without tying the cost to your portfolio size.
Hourly fees (e.g., $200/hour) are more common with fee-only advisors or one-time consults.
3. Fee-Only vs. Commission-Based Models
Lastly, commission-based models involve advisors earning money by selling products like mutual funds, annuities, or insurance. While these fees may seem invisible at first, they are built into the product's cost.
For example, buying a mutual fund through a commission-based broker could mean paying a 5.75% front-end load. That’s $575 on a $10,000 investment—before your money is even invested.
- The Smart Investor Tip
This structure can lead to biased recommendations—especially if a product earns them more than alternatives. Always ask how your advisor gets paid and whether their advice is truly independent.
Why AUM Is The Most Common Model?
There are three main reaosn to this:
It’s simple and scalable: You pay a percentage (often around 1% annually) based on how much money the advisor is managing for you.
It aligns the advisor’s incentives with your portfolio’s growth—if your investments grow, they earn more.
It works well for clients with large portfolios who want ongoing, hands-on service, like portfolio rebalancing, tax strategies, and retirement planning.
What Factors Influence the Cost of Wealth Management?
Not all wealth management clients pay the same amount. Fees vary widely depending on the complexity of your financial situation, the services you need, and the firm you choose.
Here are the main factors that shape what you’ll pay.
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Portfolio Size and Complexity
A client with $5 million and multiple business interests will likely pay more than someone with $250,000 in a simple brokerage account.
Higher-net-worth clients may receive custom tax strategies, estate planning, and more frequent touchpoints.
Portfolio Size | DIY Investing (0.10% ETF Fees) | Wealth Management (0.50% AUM Fee) | Annual Fee Difference |
|---|---|---|---|
$100,000 | $100 | $500 | $400 |
$250,000 | $250 | $1,250 | $1,000 |
$500,000 | $500 | $2,500 | $2,000 |
$1,000,000 | $1,000 | $5,000 | $4,000 |
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Service Level and Personalization
A basic investment management plan might be cheaper than a full-service wealth plan that includes retirement, tax, and estate strategies.
For instance, a firm that offers annual tax-loss harvesting, monthly check-ins, and a dedicated team may charge a premium compared to a robo-advisor.
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Type of Firm or Advisor
Large national firms often have standard pricing tiers, while independent advisors may offer more flexibility.
A digital platform like Betterment might charge 0.25% AUM, while a boutique wealth management firm could charge 1% or more, depending on the advisor’s credentials and experience.
Common Platforms and Banks for Wealth Management
Whether you're looking for personalized investment guidance or full-scale financial planning, there are several trusted platforms and banks offering wealth management services.
Wealth Management Plan | Fee Structure |
|---|---|
Fidelity Wealth Services | 0.50 – 1.50% |
Schwab Wealth Advisory
| 0.30% – 0.80% |
Vanguard Personal Advisor Services | 0.50 – 1.50% |
J.P. Morgan Personal Advisors | 0.5% – 0.6% |
Betterment Premium | 0.65% |
Merrill Lynch Wealth Management (Bank of America) | 0.85% |
These range from traditional firms with dedicated advisors to digital platforms that blend technology with human support. Here are some of the most popular options U.S. investors turn to:
Fidelity Wealth Services: Offers tiered advisory programs with dedicated advisors for portfolios starting at $250,000, plus access to estate planning and tax strategies.
Charles Schwab Private Client: Provides a team-based approach for portfolios over $1 million, with a flat annual advisory fee and access to Schwab’s wide investment options.
Vanguard Personal Advisor Services: Combines low-cost investing with personalized advice starting at $50,000, charging around 0.30% AUM.
J.P. Morgan Private Client: Tailored financial planning and investment services for high-net-worth clients, often bundled with exclusive banking perks.
Merrill Lynch Wealth Management (Bank of America): Offers personalized financial planning through licensed advisors, with integration into your broader banking relationship.
Betterment Premium: A robo-advisor with optional human advice for clients investing over $100,000, offering tax strategies and portfolio management for a 0.40% fee.
These platforms vary in cost, investment philosophy, and service level—so it’s worth comparing based on your needs and portfolio size.
