Everything You Need to Know About Wealth Management Fees

Everything You Need to Know About Wealth Management Fees

June 09, 2016

When you hire a wealth manager, you don’t pay him an hourly amount. Most wealth managers charge an annual fee based on a percentage of your assets. This annual fee ranges from 0.25%-2% of your account. You must understand what wealth management is and how payment works before you hire a wealth manager. Continue reading to learn what you need to know about wealth management fees, so you can ensure you spend your money wisely.

Wealth Management Fees Depend on the Size of the Account

You’ll hear that wealth management fees are typically around 1%, and while that is true, the exact percentage depends on the size of your account. Wealth managers will charge a lower percentage for clients with big accounts. The largest accounts can have a fee as small as 0.25%. Those who have a smaller account pay more than 1%, up to 2%.

If You’re Paying 1%, Get Your Money’s Worth

A wealth manager provides many services all in one. If you solely use your manager for investment advice, then you aren’t getting your money’s worth. Investment firms are often cheaper than wealth management because they focus on investments, whereas wealth managers take a well-rounded approach as long as the client has various financial goals. Think about all of your financial goals, including retiring, sending your kids to college, going on a nice vacation, hitting a certain number in your savings, etc.

When you don’t have time or motivation to research and learn about investments on your own, then paying a 1% fee to a wealth manager is a good deal. You can spend time on activities you enjoy rather than tackle a steep learning curve. There is a lot to learn to become a good investor and not all of it is down to the textbook. A core aspect of investing is mental. You mustn’t let fear or greed control you. Therefore, most people who are interested in investing are better off consulting with an expert, whether that’s an investment adviser or a wealth manager.

Questions You Should Ask Before Choosing a Wealth Management Firm

Choosing the right wealth manager for you shouldn’t come down to the fee they’re charging. What really matters is how trustworthy they are, what they can do for you, and whether or not the two of you can maintain a fulfilling client/customer relationship in the long-term. As we explained in a previous blog post, wealth managers strive to stay by your side for life. Here are some questions you should ask yourself before choosing a wealth management company:

  • Do I trust him to be honest with me even when it’s something I wouldn’t want to hear?
  • What are my financial needs, and can this person fulfill them?
  • Do I know how he gets paid and what potential conflicts of interest would be?

That last question may need some elaboration for you to understand. Some wealth managers receive bonuses if they successfully encourage clients to make a particular investment. You must be aware of this fact in order to make an informed decision. That doesn’t mean you should cross someone off your list for it, but keep it in mind if you choose to hire him. Some wealth managers are still objective despite incentives, but it’s up to you to decide whether or not you can trust the individual.


The value you receive from wealth management makes the fees worth it. What percentage a wealth manager charges you depends on the size of your account. Those with larger sums to work with are charged as little as 0.25% annual assets. Clients with small accounts could have up to 2% in annual wealth management fees. Typically, you can expect a wealth management fee of 1%. Rather than get hung up on percentages, focus on the value you’ll receive from wealth management. A wealth manager is there to help you increase and maintain your wealth.

Schedule a chat with us to determine what fee we will charge you if you hire us as your wealth manager and what we can do to help you achieve your financial goals.