A 1% fee on a $1.7 million portfolio would cost $17,000 a year
SmartAsset says the fee falls within commonly cited portfolio-management ranges, but value depends on the services and performance delivered.
A 1% annual advisory fee on a $1.7 million investment portfolio would cost $17,000, according to an analysis by SmartAsset published by Yahoo Finance.
The fee is within the commonly cited range for portfolio management. The article references an AdvisoryHQ analysis that put average fees at between 0.59% and 1.18% of assets under management.
SmartAsset cautioned that the rate alone does not establish whether an adviser is offering good value. The assessment depends on the adviser’s expertise, investment performance and the services included in the fee.
Those services can include investment management, tax planning, cash-flow management, retirement planning and education funding. An adviser providing only passive investment management may offer less value than one delivering a broader financial plan, the analysis said.
Fees can be charged hourly, as a fixed amount, as a percentage of assets under management, or through commissions and performance-based arrangements. Asset-based fees are commonly billed annually or quarterly and may be reduced for larger portfolios.
Robo-advisers generally charge less, but typically provide fewer personalised planning and tax services. The article said investors should assess what they receive for the fee, while noting that the cited ranges are estimates rather than universal benchmarks.
