How Are Fiduciary Advisers Paid?

How to Determine Your Adviser's Fee Structure

Understanding how your fiduciary adviser is paid helps ensure the relationship aligns with your unique goals and needs.

Fiduciary investment advisers must provide full and fair disclosure of all fees, costs, and compensation (direct or indirect) associated with their services—including disclosing any conflicts of interest resulting from compensation structures. Fee details must be included both in a written contract with the client and through regulatory disclosures, primarily on Form ADV (Parts 1, 2A and 3 (Form CRS))—explaining the services offered, the fee structure, how fees are calculated and assessed, and how and when they will be paid.

One of the most effective ways to understand the fees you are paying is to review the disclosures (i.e. ADV Parts 1, 2A and 3) and agreements provided by your adviser. These documents should outline the fee structure, whether it is a flat fee, hourly rate, or a percentage of the assets under management. Don’t hesitate to ask your adviser for a detailed explanation of how the fees are calculated and what services are included. Additionally, regularly reviewing your account statements can help you identify any charges or deductions. Clear and open communication with your fiduciary adviser is key to ensuring you fully understand the costs associated with your financial planning and avoid unexpected surprises.

Adviser fees are only one of many costs to plan for in retirement. To visualize what your overall finances might look like once you retire and determine how much you should save now to get the retirement you want, try our Retirement Calculator.