Most financial advisors charge about 1% to 1.5% of your portfolio per year, depending on portfolio size. That's the short answer. But “about 1%” can mean very different dollar amounts depending on your portfolio size—and the range across firms is wider than most people expect. We pulled fee schedules from over 14,000 SEC-registered advisory firms to find out what advisors actually charge.
What the data shows
The median maximum published AUM fee across all firms is 1.75%. The middle 50% of firms publish rates between 1.3% and 2.0%. But those are the top-line rates in the fee schedule—the effective rate you actually pay is lower, because most advisors use tiered schedules that charge less on each additional dollar. Here's what those rates translate to in actual dollars at common portfolio sizes:
| Portfolio Size | 25th Percentile | Median | 75th Percentile |
|---|---|---|---|
| $250K | 1.00% | 1.50% | 1.55% |
| $500K | 1.00% | 1.38% | 1.50% |
| $1M | 0.96% | 1.25% | 1.50% |
| $2M | 0.88% | 1.19% | 1.26% |
At $500K, you're looking at roughly $5,000 to $7,500 a year, with a median of $6,875. At $1M, fees cluster around $9,625 to $15,000. That gap between the 25th and 75th percentile matters—at $2M, the difference between a cheaper and pricier firm is about $7,600 per year.
Why fees vary so much
Three things drive the spread. First, firm size. Solo practitioners tend to charge less than large firms with big teams and overhead. A solo advisor might charge 1.0% on a $500K portfolio ($5,000/year), while a large firm charges 1.5% ($7,500/year).
Second, services included. Some advisors bundle financial planning, tax preparation, and estate coordination into their AUM fee. Others charge for investment management only, with planning as an add-on. Bundled services explain why some firms charge more without being a worse deal.
Third, geography. Advisors in New York and San Francisco tend to charge higher rates than those in smaller markets. Cost of living affects advisory fees just like it affects everything else.
The sliding scale effect
Most advisors use tiered fee schedules—higher rates on the first chunk of your money, lower rates as your balance grows. This means the effective rate drops at larger portfolio sizes.
At $250K, the median fee works out to about 1.50%. At $1M, it drops to about 1.25%. At $2M, it's around 1.19%. The dollar amount goes up, but you're paying a smaller percentage. If you have $2M and your advisor quotes 1.5% with no breakpoints, that's above the 75th percentile—worth asking about.
| Portfolio Size | Median Effective Rate | Median Annual Cost |
|---|---|---|
| $250K | ~1.50% | $3,750 |
| $500K | ~1.38% | $6,875 |
| $1M | ~1.25% | $12,500 |
| $2M | ~1.19% | $23,750 |
What “1%” actually costs you
Advisory fees compound over time because every dollar paid in fees is a dollar that isn't growing in your portfolio. On a $500K portfolio earning 7% annually, a 1% fee doesn't just cost you $5,000 in year one—it costs you the future growth on that $5,000 too.
Over 10 years, that 1% fee on $500K adds up to roughly $70,000 in total fees and lost growth. Over 20 years, it's around $200,000. A 1.5% fee? About $300,000 over 20 years. The difference between a 1.0% and 1.5% advisor on that same $500K is roughly $100,000 over two decades.
That doesn't mean cheap is always better. A good advisor who keeps you from panic-selling in a downturn or helps you minimize taxes can easily be worth their fee. But it does mean you should know the real cost before signing up.
How to use this data
When you get a fee quote from an advisor, compare it against these benchmarks. If they're charging above the 75th percentile, ask what you're getting for the premium. If they're below the 25th percentile, find out what's not included.
A few things to keep in mind:
- These are published rates. Many advisors will negotiate, especially for larger portfolios.
- Fees aren't everything. A 1.5% advisor who does comprehensive planning may cost less than a 0.75% advisor plus a separate planner.
- Fund expenses are extra. The underlying ETFs and mutual funds charge their own fees (typically 0.03% to 0.75%), which aren't reflected in advisor fees.
Data source: Fee schedules from SEC Form ADV Part 2A filings for 14,000+ registered investment advisory firms. All data comes from official regulatory disclosures that advisors are legally required to keep accurate.