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Financial Advisor Fees Explained: 1% AUM vs Flat Fee vs Commission
How financial advisors charge — AUM fees, hourly, flat fee, and whether you need one.
July 9, 20267 min readBy MyWealthForge
Key Takeaways
- 1Typical AUM fee: 0.75–1.25% of assets annually.
- 21% on $500k = $5,000/year — compounds to $100k+ over 20 years.
- 3Fee-only fiduciaries are legally required to act in your interest.
- 4DIY index investing costs 0.03–0.10% — consider before hiring.
A 1% advisor fee sounds small but erodes compound growth dramatically over decades. Know what you pay and what you get.
Compare robo-advisor vs DIY.
Fee Types
AUM: % of portfolio. Flat fee: $2,000–$7,500/year. Hourly: $200–$400/hr. Commission: paid by product sales (conflict of interest).
When Advisors Help
Complex situations: business sale, inheritance, retirement transition, estate planning.
Simple index portfolio? DIY investing likely wins.
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