In a world of robo-advisors, free budgeting apps and endless social media investment advice, some people begin to wonder if hiring a financial advisor is worth the cost. This is a valid question, as annual advisory fees can range from 0.5% to 2% of assets under management (AUM). For a household with $1 million in investable assets, that could result in $10,000 to $20,0000 in fees per year, not an insignificant amount!

However, many clients are surprised to learn that an experienced financial advisor can actually save you money in the long run. Let’s consider how hiring a financial advisor may be worth the cost.

What You’re Paying For

A financial advisor who takes a comprehensive approach does far more than pick stocks or encourage you to save more for the future. Comprehensive advisors provide:

• Holistic financial planning services – Retirement projections, cash-flow analysis, debt management strategies, large purchase planning, goal setting and more

• Investment management – Portfolio construction, risk management, tax-loss harvesting, asset location, periodic rebalancing¹

• Retirement planning – Tax-diversified retirement savings strategies, tax-efficient retirement withdrawal strategies, retirement income planning, Social Security and Medicare timing

• Tax planning – Roth conversions, tax-loss harvesting, charitable giving, credit and deduction optimization²

• Estate and legacy planning – Wills, trusts, beneficiary coordination, estate tax minimization, special needs planning³

• Behavioral support – Preventing costly emotion-driven decisions during periods of market volatility

• Life transition support – Guidance to help navigate significant milestones such as marriage, birth of a child, divorce, inheritance or other sudden wealth, death of a spouse, career change, retirement, business sale, etc.

Potential Cost Benefit

Several recent studies have shown there’s significant value in working with a financial advisor, including:

• Russell Investments’ 2026 Value of an Advisor study found the potential added value of an advisor in the United States to be 4.92%.

• TIAA Institute’s 2026 research found that professional advice delivers the equivalent of 1.4% to 2.4% higher annual returns without the need to save more, thanks to better asset allocation, tax-efficient strategies and optimized investor behavior.⁴

• SmartAsset reports that investors who work with an advisor achieve a 2.39% to 2.78% performance premium over those without advisors (after accounting for 2.56% annual inflation and 0.75% or 1% in AUM-based fees).

Following are just a few examples of the long-term benefits of working with an advisor.

• Tax savings – Tax savings alone can significantly offset much of your advisory fee, as a proactive tax planning strategy can save you thousands of dollars in taxes each year.

• Informed decision making – A financial advisor can help you establish an investment portfolio that can withstand volatility and help you avoid making fear- or greed-driven investment decisions.

• Retirement income optimization – Your advisor can help optimize your retirement income and tax savings opportunities through Social Security timing, tax-efficient withdrawal strategies, pension optimization, etc.

Who Benefits Most?

The benefits of working with a qualified financial advisor are generally greatest for the following types of clients.

• Pre-retirees and retirees who qualify as “mass affluent” (generally between $300,000 and $3 million in assets)

• Business owners preparing for an exit

• Families with complex situations such as blended families, those with special needs loved ones, etc.

• Corporate executives with complex compensation arrangements (restricted stock units, stock options, etc.)

• High earners who lack the time or interest in managing their finances

• People looking for the confidence a financial advisor can provide

Bottom Line

Hiring a financial advisor is an investment, not an expense. A financial advisor serves as the quarterback of your financial life, coordinating the various aspects of your finances and enlisting the support of other experienced professionals, such as an estate planning attorney, accountant, insurance professional and more. The right advisor can help streamline your financial life, with a goal of achieving better results with less effort and fewer mistakes. The “cost” of this advice often pays for itself as a result of more informed decisions, tax savings, optimized investments and avoided mistakes.

If your financial life feels too complex to manage on your own or you’re approaching a major life transition and want to get it right, the real question is not, “Can I afford an advisor?” but, “Can I afford not to have one?”

For more information about how an experienced financial advisor can support your financial life, please reach out to schedule a call with a member of our team.

¹Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. (28-LPL)

²Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA. (22-LPL)

³LPL Financial representatives offer access to Trust Services through The Private Trust Company N.A. an affiliate of LPL Financial. (154-LPL)

⁴Asset allocation does not ensure a profit or protect against a loss. (34-LPL)