Did you know that the average cost of hiring a financial advisor in Australia is around $3,500 per year?
Understanding how much does a financial advisor cost is essential before making this important investment in your financial future.
This article breaks down the various fee structures, from fixed fees and asset-based pricing to hourly rates, helping you navigate the costs involved in hiring a financial advisor in 2025.
Whether you’re seeking comprehensive advice or specific financial planning services, we’ll guide you through what to expect and how to choose the right financial advisor for your needs.
Read on to gain practical insights and make informed decisions about your financial affairs.
Key Takeaways
- Financial advisors charge various fees, including fixed fees that range from $2,000 to $20,000 annually, asset-based fees that can reach up to $20,000 per year depending on the portfolio size, and hourly rates between $275 and $550 per hour. These fees collectively influence the overall cost of financial planning.
- Comprehensive financial advice typically costs between $5,000 and $8,000 per year.
- Payment models for financial advice are now primarily fee-only, as commission-based payment structures have been banned.
- Hybrid fee models, which combine asset-based fees with fixed fees, have gained popularity due to their flexibility and cost-effectiveness, particularly for investors with large and growing portfolios.
Understanding How Much a Financial Advisor Costs: Unpacking Financial Advisor Fees
The cost of a financial advisor is determined by many factors, including the fee arrangement.
Financial advisors charge their clients either through fixed fees or a percentage of assets under management, commonly referred to as percentage-based fees.
These models vary in price and transparency, but all play a part in your financial journey.
The range for financial advisors who charge flat fees is $2,000 to $10,000 per year, some advisors have more bespoke fee structures.
Advisory fees, based on assets under management, can range from $3,000 to $20,000 per year and increase as your investment portfolio grows and the level of complexity of the work undertaken increases.
In 2025, approximately 20% of Australians are willing to invest between $2,500 and $5,000 annually in financial advice.
Below is a summary table outlining the common types of financial advisor fee structures, their typical cost ranges, and the methods by which these fees are generally calculated. This overview will help you understand the different payment options available when hiring a financial advisor.
| Type of Fee | Cost Range | Percentage | How They Are Generally Calculated |
|---|---|---|---|
| Fixed Fee | $2,000 to $20,000 per year | N/A | A set flat fee charged annually or per particular service |
| Asset-Based Fee | Varies with portfolio size | 0.5% to 1% of managed assets | Calculated as a percentage of total assets under management |
| Hourly Consultation | $100 to $550 per hour | N/A | Charged based on the number of hours worked or consulted |
Fixed Fee Arrangements
A fixed fee arrangement is a popular choice for those who want transparency and control over costs. Under this model, financial advisors charge a flat annual fee, typically ranging from $2,000 to $20,000, for their services.
This financial advisor’s cost covers a comprehensive financial plan that doesn’t require ongoing management or oversight, also known as financial advice fees.
If you want a straightforward financial plan with no ongoing management or if you’re looking to make a one-off financial decision, the fixed fee can be a lower cost than for a comprehensive plan, but your financial planner should clearly scope the advice and undertake a thorough analysis of your current situation to ensure that the advice is appropriate.
Comprehensive financial planning involves a detailed approach covering investment, retirement planning, and tax minimisation.
Asset-Based Pricing
Asset-based pricing is another fee structure in financial advice. Under this model, financial advisors charge a percentage fee based on the total assets they manage on your behalf.
These fees generally range from 0.5% to 1% of managed assets. Asset-based fees may apply to both ordinary investments and more complex portfolios, impacting how advisors structure commissions and tax planning strategies.
This aligns the advisor’s success with your success, as they have a vested interest in growing your investment portfolio.
However, the asset-based fee structure is not without its downsides.
Larger investment balances can pay much higher fees than smaller ones for the same services. For example, a $2 million balance could pay 10 times more than a $200,000 balance.
Hourly Consultation Costs
Finally, some financial advisors charge by the hour for their services. This setup works well if you need advice on a specific issue or just a one-time consultation.
If you’re facing financial difficulties, you might want to consider financial counselling, which offers free, independent support tailored to your situation.
When it comes to personal financial advice, experienced advisors usually charge between $275 and $550 per hour. However, hourly rates in Australia can range anywhere from $100 to $550, depending on the advisor’s expertise and how complex your needs are.
This flexible fee structure can be perfect if you’re looking for guidance on a particular topic or want to make a one-off financial decision.
Just keep in mind, while hourly fees might seem affordable at first, they can add up quickly if you need ongoing advice or support over time.
Types of Financial Advisory Services
Financial advisory services cover a wide range, from managing your assets to handling comprehensive wealth management. Financial professionals are experts who provide you with thorough advice and support for managing your money and navigating complex financial situations.
Each type of service comes with its own fees and levels of complexity, which can impact the amount you’ll pay.
Knowing the full range of services that financial advisors offer is essential to making an informed choice.
Whether you want a financial adviser to:
- Manage your investments
- Help you plan your financial future
- Provide tax planning and preparation
- Offer retirement planning advice
- Assist with estate planning
- Provide insurance advice and planning
Understanding what to expect will help you choose the right advisor and plan your budget with confidence.
Investment Management
Investment management is a service that financial advisors offer to help you manage your investments, whether actively or passively.
Each approach comes with its own fee structure. A good financial advisor will also take the time to educate you, helping you make informed financial decisions and become more resourceful. They stay up to date with market trends and regulatory changes related to purchasing investments, ensuring the advice they provide is always current and relevant.
If you choose an actively managed portfolio, expect higher fees, as a team constantly adjusts your investments to respond to market changes.
On the other hand, passively managed portfolios usually come with lower fees because they involve less buying and selling, focusing on a long-term investment strategy.
In addition to these fees, you may also encounter a fixed investment platform fee, which covers the cost of managing your investments separately from the performance of your portfolio.
Personal Financial Planning
Personalised financial planning is another common service offered by financial advisors. This service is tailored to include meetings for:
- Retirement savings
- Planning education costs for children
- Budget creation
- A complete financial plan
However, personalised financial planning services can incur additional fees for regular reviews and adjustments to keep them aligned with the client’s changing goals.
Be sure to consider these ongoing costs when selecting your financial advisor and planning your budget.
Wealth Management and Estate Planning
Wealth management and estate planning services are usually sought by individuals who have:
- A high income
- A significant portfolio
- An inheritance
- A large insurance payout
- Investment property as part of their financial strategy, seeking professional advice to help grow wealth and plan for retirement
These services involve more complex and comprehensive financial planning, which means higher fees.
However, while these services may be more expensive, they can be a significant help to individuals with complex financial needs.
By taking the complexity and stress off your shoulders, these services enable you to focus on other important aspects of your life.
Comparing Payment Models: Which Is Right for You?
When it comes to financial advisory services, one size doesn’t fit all.
Different payment models suit different client needs, and understanding these will help you find the right one.
Traditional human financial advisors employ three primary payment structures: fee-only, asset-based, and a hybrid model. In the past, some advisors also earned commissions from recommending financial products, but commission-based payment structures are now largely banned.
Each has its pros and cons, and the right one for you will depend on your individual financial goals and preferences.
Let’s take a look at each to help you decide.
Fee-Only Versus Commission-Based Advisors
Fee-only advisors are paid directly through AUM or directly from your bank account or credit card and aim to have fewer conflicts of interest.
They charge an AUM fee for investment management or a flat fee for financial planning services.
Ultimately, the choice comes down to your comfort level and your personal financial goals.
Robo-Advisors Versus Human Advisors
In the digital age, robo-advisors have emerged in the financial advisory landscape. These automated software platforms simplify the investment process by using online quizzes to match an investment strategy to your risk tolerance.
Generally, robo-advisors are designed to offer straightforward investment advice.
Robo-advisors charge assets under management (AUM) fees of 0.25% to 0.50%, which is lower than the 1% fee typically charged by traditional in-person financial advisors.
But while robo-advisors may be good for beginners and those with simple portfolios, they may not provide the personalised financial plans that individuals with complex and detailed financial needs require.
Hybrid Fee Structures
In today’s ever-changing financial world, hybrid fee structures are becoming more popular. This approach combines an ongoing fee with a percentage-based fee, so you pay a lower percentage fee while your portfolio is growing and then switch to a flat fee once your investments reach a certain size.
This flexible setup can be a great fit if you have a large portfolio that’s expanding quickly. But, like with any fee model, it’s important to think about factors like:
- Your investment goals
- The size of your portfolio
- How much you expect it to grow
- The risks in the market
The Value Proposition of Professional Financial Advice
Justifying the cost of a financial advisor can be tough, especially for those with simple financial needs.
However, for those with complex financial situations or significant asset growth potential, the value of professional advice can often exceed the cost.
Most financial advisors can add significant value to a client’s wealth by managing cash flow and investments.
So before you dismiss the idea of hiring a financial advisor based on cost alone, think about the return on investment their expertise and planning could deliver.
Studies have shown that financial advisors can add between 1.5% and 4% in financial returns over the long term due to their expertise and planning.
If you are facing complex financial decisions or challenges, don’t hesitate to seek advice from a qualified professional.
How to Find and Choose a Financial Advisor
Knowing how much a financial advisor costs is only half the battle.
Finding and choosing the right financial advisor is equally, if not more, important.
This process involves understanding professional qualifications, assessing the advisor’s experience and reading the Statement of Advice (SOA).
Begin your search by asking friends or family, checking professional associations, and consulting online directories.
These resources will provide you with valuable information and guidance. Make sure to check the advisor’s reputation, their specialties and the type of clients they work with.
Professional Associations
Professional associations, such as the Financial Advice Association Australia (FAAA), can be a valuable resource in your search for a financial advisor.
They have high professional and ethical standards, enabling you to distinguish between the good and the bad.
By using directories from the FAAA, you can find financial planners that meet your criteria and have more confidence in the qualifications and experience of the advisors you are considering.
Assessing Qualifications and Experience
Qualifications and experience are a key part of the selection process.
Professional associations and the Financial Advisers Register can provide insight into a financial advisor’s qualifications, such as the FAAA’s Certified Financial Planner (CFP) certification, which is a global standard for professionalism and ethics.
Also note that the cost of financial advice can be influenced by:
- The type of advice
- The complexity of your financial situation
- The experience level of the advisor
- Their chosen fee method.
Understanding the Statement of Advice (SOA)
Before you sign on the dotted line, you must read the Statement of Advice (SOA). This document outlines the services, fees and the advisor’s understanding of your situation.
A personal financial plan may have a specific fee called a Statement of Advice fee, with the average cost of an SOA around $6,500.
By reading the SOA, you can make sure the services delivered align with your financial planning needs.
Navigating Tax Deductions and Financial Advice
When considering the cost of financial advice, note that tax deductions are available for investment advice and financial planning services.
The Australian Taxation Office (ATO) in Australia allows specific deductions for investment advice and financial planning services. This can be a tax benefit for individuals who seek professional advice.
These deductions are for income-generating investments, so fees for investment advice may be tax-deductible. This doesn’t mean the cost of financial advice goes away, but it can help offset it.
Summary
In today’s busy financial world, it’s important for you to understand how much a financial advisor might cost. Financial advice comes in different shapes—fixed fees, asset-based pricing, and hourly rates—each fitting different needs and preferences.
Whether you’re looking for help with managing your investments, planning your personal finances, or handling your wealth, knowing the costs upfront will help you make smarter decisions.
The key is finding an advisor who truly understands your financial goals and offers value that makes their fees worthwhile.
Remember, the aim isn’t just to spend money on advice but to invest in your future with confidence.
Understanding how much a financial advisor costs can help you make an informed choice that benefits your long-term financial health.
Ready to get started? Book a consultation call with an experienced financial advisor in Melbourne today.
Frequently Asked Questions
What are the main types of fee structures for financial advisors?
The different fee structures for financial advisors include fixed fees, asset-based pricing, and hourly rates. Fixed fees are a set amount for specific services, asset-based pricing is a percentage of the assets under management, and hourly rates are based on time spent with the advisor.
What factors can affect the cost of a financial advisor?
The cost of a financial advisor can be influenced by the fee arrangement, the complexity of the client’s situation, and the advisor’s experience. Consider these when evaluating financial advisors.
What is a Statement of Advice (SOA)?
A Statement of Advice (SOA) is a document that outlines the services, fees and the advisor’s understanding of your situation.
Can I get a tax deduction for financial advice fees in Australia?
Yes you can claim tax deduction for financial advice fees in Australia if they are related to specific income-generating investments, according to the ATO.
What is the value proposition of using a professional financial advisor?
Employing the services of a professional financial advisor offers the benefit of expertise in managing complex financial situations and the potential for significant asset growth, ultimately helping to build wealth and potentially exceeding the cost of their services.
