Understanding Financial Advisor Fees With Bull Oak
Kimberly Green | 2025-04-06
Financial Advisor Fees: What You're Really Paying For I recently sat down with Ryan Hughes from Bull Oak , one of the financial advisors on Sam's List, to chat through some common questions I get from people who are curious about working with a financial advisor. I just wanted to understand what actually matters when you're evaluating advisors, especially if you're someone with growing wealth, a big career move ahead, or just a lot of financial decisions on your plate. We covered everything from fees to trust to why so many people hesitate to get help, even when they probably should. I'm sharing what I learned in case you're in that weird space of knowing you should talk to someone… but not knowing how to start or what to ask. The Three Main Financial Advisor Fee Models In the financial advisory world, there are three primary fee structures that you'll encounter: Fee-only advisors : Fiduciaries regulated by the SEC who charge either flat fees, hourly rates, or a percentage of assets under management (AUM). Fee-based advisors : Partnered with brokerages like Merrill Lynch or Morgan Stanley and receive commissions, regulated by FINRA. Dual-registered advisors : Registered with both FINRA and SEC, allowing them to operate under either model depending on the services provided. Each model has its strengths and serves different client needs. Bull Oak , Ryan's firm, operates under the fee-only model, which emphasizes transparency in how advisors are compensated. He explained that while the industry has traditionally been commission-based, there's been significant growth in fee-only advisory services over the past couple of decades, offering clients more options based on their preferences and circumstances. How Fee-Only Advisors Structure Their Fees Bull Oak uses a hybrid approach that's pretty interesting from a fee-only advisor: Annual flat financial planning fee : Starting at $12,350. This fee can include tax prep, filing, and planning. Optional annual asset management fee : 0.35% on assets above $1 million. To simplify things for my non-financial brain, Ryan walked me through a practical example. For a client with $5 million in assets, his firm would charge the financial planning fee (let's say $15,500) plus the asset management fee of 0.35% on the $4 million above the first million threshold. This calculation yields about $14,000 for portfolio management, bringing the total annual fee to $29,500. But what does that actually mean in terms of value? Ryan explained that he helps clients understand this by converting it back to a percentage of their...
