Financial advisors can help people make the most of their money and grow their wealth, but this expertise comes at a rising cost. A pair of new studies finds that the financial benefits of working with an advisor are significant, but the cost of that expertise is rising.
A new survey of nearly 2,000 investors from the TIAA Institute finds that households that hire financial advisors have an average net worth more than twice that of households who don’t use professional help for managing their finances.
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The research reveals that the average family with a financial advisor had a net worth of $800,000, while those without advisors had an average net worth of $388,000. Notably, this disparity holds true even after controlling for differences in income and other demographic factors.
"We found that those households with advisors demonstrated better financial habits," says Surya Kolluri, head of the TIAA Institute. Working with an advisor improves a variety of financial behaviors. For instance, more than 90% of people who work with an advisor save consistently, a 15-percentage-point increase over people who don't seek professional help. They're also more confident about their financial decisions, he adds — findings that hold true regardless of people's wealth.
Getting guidance from a pro helps people do a better job figuring out how much to save, allocate their assets across a portfolio and make more efficient use of tax-advantaged accounts, the research found. More striking: These benefits exist regardless of how much money you start out with, Kolluri says.
"We clearly show it’s not the level of net worth that you have," he says. "At any level of wealth, advisors have a positive impact."
Professional help is getting pricier
While the TIAA Institute makes a compelling case for seeking out professional financial guidance, a second study finds that obtaining this help has become more costly: According to the 2026 State of Financial Planning Fees from Envestnet MoneyGuide, over half of financial advisors raised their fees last year.
The average annual retainer charged by advisors rose 52% since 2023, jumping from nearly $4,500 to more than $6,800. Subscription-based advisory services nearly tripled over the same time period, with monthly fees jumping from $215 to $595. Flat fees rose by a comparatively more modest 15% to just over $2,900.
The single area where fees dipped was for assets under management, or AUM. That average fee fell from 1.05% to 0.96%.
Where People Are Investing Right Now
A little background: AUM is the traditional compensation model for financial advisors. Typically, customers pay an annual fee of about 1% of the total value of their portfolio, deducted quarterly or monthly. Paying the person who manages your portfolio a percentage of your nest egg has advantages. It is a simple formula, and it incentivizes your advisor to make good investment decisions, since portfolio growth for you means a bigger payday for them. But the model has some significant drawbacks, too, which is why advisors today are looking for alternative ways to get and keep clients.
First and foremost, you need to start out with a lot of money. Minimums of $100,000, $250,000 or even more are typical — a framework that locks out a significant percentage of people, especially younger and lower-income people, from having access to high-quality financial advice.
Another drawback, according to Matt Wilson, head of business strategy at Envestnet MoneyGuide, is that investment expertise isn’t the only kind of financial advice people need. It’s now more likely to be intertwined with tax planning, estate planning and longevity planning, as well.
This is shaking up the industry's approach to pricing, he says. "Advisors have experimented with different approaches on how they should be charging," he says.
'Self-serve' advice is an entry point for many
Another trend that has shifted the financial advisory landscape is the growing adoption of DIY investing platforms and robo-advisors, which many people use as an on-ramp to the world of professional money management.
“Consumers or households who have less complex investment needs and less wealth in general may be completely fine [with] services provided through an online or digital-first experience, not engaging a financial advisor," Wilson says.
As a result, more advisors today are embracing the pricing model that’s become ubiquitous across industries ranging from fast food to airlines to cable TV: unbundling. Rather than a long-term, full-time commitment, a growing share of advisors now offer tools that augment the growing use of DIY investing tools, such as subscriptions or one-off consultations.
"It’s giving the consumer more choice,” Wilson says, and it improves transparency. “It’s more clear what the cost is associated with that service,” he adds.
Especially for younger generations of investors who are more comfortable interacting digitally than over the phone, self-education and research is often the first step before people hire an advisor, Wilson says.
"As their wealth continues to grow, that’s where the trend becomes clear. They want to talk to somebody, and getting professional advice costs money."
Even if you aren’t in a position to pay for advice just yet, Kolluri says "many companies offer digital tools” to help people start and maintain good money habits.
Your company's 401(k) plan is a good place to start, he suggests. In its research, the TIAA Institute found that people benefit from this advice regardless of their financial circumstances. “What we're finding is, if you access that advice, it’s going to help you," he says.
