Financial advisors can help people make the most of their money and grow their wealth, but this technology comes at an increasing cost. Two new studies find that the financial benefits of working with a counselor are significant, but the costs of that expertise are rising.
A new survey of nearly 2,000 investors from the TIAA Institute finds that households that hire financial advisors have a net worth of more than twice as much as households that don’t use professional help to manage their finances.
The study revealed that the average family with a financial advisor had a net worth of $800,000, while those without an advisor had an average of $388,000. Notably, this inequality holds true even after controlling for differences in income and other demographic factors.
“We found that those households with advisors exhibited better financial practices,” said Surya Kolluri, head of the TIAA Institute. Working with an advisor improves a variety of financial behaviors. For example, more than 90% of people who work with a counselor save regularly, 15 percent more than people who don’t seek professional help. They’re also more confident about their financial decisions, he adds — a finding that holds true regardless of people’s wealth.
Getting guidance from an expert helps people do a better job of figuring out how much to save, allocate their assets across portfolios and make the most of tax-advantaged accounts, research has found. Even more surprising: These benefits exist no matter how much you start with, Kolluri says.
“We clearly show that it is not the price level it has,” he said. “At any level of wealth, advisors have a positive impact.”
Professional help comes at a premium
While the TIAA Institute makes a compelling case for seeking professional financial guidance, a second study finds that finding this help has become more difficult: According to the 2026 Financial Planning Fees from Envestnet MoneyGuide, more than half of financial advisors increased their fees last year.
The final average annual fee paid to advisors has increased by 52% since 2023, from about $4,500 to more than $6,800. Subscription-based advisory services nearly tripled over the same period, with monthly fees jumping from $215 to $595. Base costs rose 15% compared to just over $2,900.
One area where fees dipped was in assets under management, or AUM. That average fell from 1.05% to 0.96%.
A little background: AUM is a common compensation model for financial advisors. Typically, clients pay an annual fee of about 1% of the total value of their portfolio, deducted quarterly or monthly. Paying your portfolio manager a percentage of your nest egg has advantages. It’s a simple formula, and it encourages your advisor to make good investment decisions, as portfolio growth for you means a big payday for them. But the model has other important drawbacks, too, which is why consultants today are looking for other ways to get and keep clients.
First and foremost, you need to start with a lot of money. A minimum of $100,000, $250,000 or more is typical – a framework that excludes a significant percentage of people, especially young and low-income people, from accessing high-quality financial advice.
Another drawback, according to Matt Wilson, head of business strategy at Envestnet MoneyGuide, is that investment wisdom isn’t the only type of financial advice people need. Now it can be integrated with tax planning, estate planning and longevity planning, too.
This will shake up the way the industry charges, he says. “The advisers have tried different ways of how to charge,” he said.
‘Do-it-yourself’ advice is an entry point for many
Another trend that has changed the financial advisory landscape is the growing adoption of DIY investment platforms and robo-advisors, which many people use as a gateway to the world of professional money management.
“Consumers or families with complex investment needs and limited wealth can often be a perfect fit [with] services offered online or a digital first experience, not dealing with a financial advisor,” Wilson said.
As a result, many consultants today embrace a pricing model that is ubiquitous in every industry 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 expand the growing use of DIY investment tools, such as subscriptions or one-on-one consultations.
“It gives the consumer more choice,” Wilson said, and improves visibility. “It’s more clear that the cost is related to that service,” he adds.
Especially among 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 said.
“As their wealth continues to grow, that’s where the trend becomes apparent. They want to talk to someone, and getting professional advice costs money.”
Even if you’re not in a position to pay for advice yet, Kolluri says “a lot of companies are offering 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 find is, if you reach out for that advice, it will help you,” he said.
