Working with a financial advisor who earns a commission might be suitable if you make only occasional portfolio changes or need assistance only with specific investment products. Commission-based fees (typically 1% to 2% of the total transaction value) are generally more budget friendly than ongoing advisory services, as you’re charged only when you complete a transaction. Some financial advisors assess fees based on the total amount of your financial holdings and investments, known as assets under management (AUM). An AUM-based fee is calculated as a percentage of your portfolio’s total value and is typically collected annually. A financial advisor may use a tiered fee structure, decreasing the fee’s percentage as the value of your portfolio rises.
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