More Work, More Pay: Advisor Retainer Fees Surge 52%

They’re charging how much?!

We remember a time when there was no pain at the pump, a dollar slice of pizza actually cost a dollar and taking the family to Disney World didn’t feel like making a down payment on a Lamborghini.

Price increases have hit every industry, including wealth management. Financial advisors now charge an average retainer fee of roughly $6,800, a 52% increase from three years ago, according to a report from Envestnet and Datos Insights. It’s not simply that advisors are charging more for the sake of it. The profession has evolved from primarily investment management to financial planning, with firms of all sizes trying to offer the kind of white-glove service once associated mainly with family offices.

“Advisors are offering deeper, more comprehensive and more ongoing services, especially around tax strategies, retirement distribution, legacy planning and behavioral coaching,” said Matt Wilson, head of business strategy at Envestnet.

The AI Threat

Part of the shift to planning services is the growing influence of artificial intelligence. Nearly 70% of advisors cited AI and machine learning as a threat this year, up from 29% in 2023. “AI has moved from abstract to client-facing,” said Wally Okby, strategic advisor at Datos and author of the study. “Advisors are now sitting across from clients who’ve already run their own analysis, for better or for worse.”

The study also found that since 2023:

• Flat fees are up 15%, subscription fees have nearly tripled from $215 per month to $595 and asset under management bundled fees have actually ticked lower.

• RIAs are charging more in absolute terms, charging more clients and raising prices more aggressively than their non-RIA peers. The average RIA retainer fee is $7,550 compared to $5,237 for non-RIAs.

For the Kids. One major growth area is younger clients. The share of advisors with substantial millennial client allocations has nearly doubled in the past three years, with newer advisors leading the trend. Meanwhile, the percentage of advisors actively engaging clients’ children has jumped from 32% to 55%. It’s a segment that’s becoming increasingly important to advisors even if it means different fee models and a willingness to invest time in relationships that won’t be profitable for years, Okby told Advisor Upside.

“That’s an extremely hard ask for advisors already running full books,” he said. “But with the largest wealth transfer in history underway, the advisors who haven’t made that pivot are carrying real practice continuity risk.”