What does a financial advisor for small business owners do?

A financial advisor for small business owners can help connect business decisions with the owner’s personal financial plan. Depending on the engagement, that may include cash flow planning, tax planning coordination, retirement planning, investing outside the business, risk management, and preparing financially for a future business sale or transition.

How is a business owner financial planner different from a traditional financial advisor?

A business owner financial planner looks beyond an investment portfolio and considers how the business affects the owner’s overall financial life. Business income, owner compensation, taxes, reinvestment decisions, retirement benefits, business value, and personal investments may all need to work together rather than being planned separately.

When should a business owner consider hiring a financial advisor?

A business owner may consider hiring an advisor when financial decisions become more complex or begin overlapping. Common examples include increasing profits, unpredictable cash flow, significant tax liabilities, hiring employees, choosing a retirement plan, building wealth outside the company, buying out a partner, or preparing for an eventual exit.

How can business owners build wealth outside of their business?

Business owners can potentially build wealth outside their companies through cash reserves, retirement accounts, taxable investment accounts, real estate, and other investments. The appropriate strategy depends on the owner’s goals, cash flow needs, risk tolerance, and the potential return from continuing to reinvest money back into the business.

What should I look for when choosing a financial advisor for my business?

Look for an advisor who understands both business and personal financial planning and can clearly explain how they are compensated. Consider asking whether they are a fiduciary, how often they work with business owners, whether they coordinate with CPAs and attorneys, and whether their services include areas such as tax planning, business cash flow, retirement planning, investing, and exit planning.

How Much Does a Financial Advisor for Business Owners Cost?

Kendall Maccagnan

Oct 14

7 min read

By Kendall Maccagnan, CPA, CFP® and Financial Advisor in Tampa, Florida

Most financial advisors charge in one of four ways: a percentage of the investments they manage (a median of about 1% per year on portfolios up to $1 million), an hourly rate (about $300 per hour), a one-time financial plan (about $3,000), or an ongoing retainer (about $4,500 per year), according to 2024 Kitces Research. These figures are based on 2024 research, so treat them as industry reference points rather than exact current prices.

For business owners, the more important question is what that fee actually covers, because much of your wealth may sit inside your business, not in an investment account.

When I talk with business owners, one of the first questions is usually some version of “What is this going to cost me?” It’s a fair question, and one that a lot of advisory firms make surprisingly hard to answer. Many don’t publish their prices at all.

So, let’s walk through how advisors actually charge, what each pricing model typically costs, and what a business owner should expect to get for the money.

Key Takeaways

Advisors typically charge a percentage of assets, an hourly rate, a one-time project fee, or an ongoing retainer, and many combine more than one.
2024 industry medians are about 1% of assets per year (up to $1 million), $300 per hour, $3,000 for a one-time plan, and $4,500 per year for a retainer.
A percentage-of-assets fee is based on your investment accounts, which may not reflect the planning a business owner needs around cash flow, taxes, and the business itself.
Compare quotes by what’s included, not just the price. Ask whether business finances, tax planning, and exit planning are part of the fee.

How Do Financial Advisors Charge for Their Services?

There are five common ways financial advisors are paid. Many advisors use more than one, like a planning fee plus an ongoing asset-based fee, so it’s worth asking for your total annual cost.

Pricing model	How it works	Typical cost (2024 median)	Often a fit for
Percentage of assets (AUM)	A percentage of the investments the advisor manages, charged every year	About 1% per year on portfolios up to $1 million, often lower on larger balances	People who mainly want ongoing investment management
Hourly	You pay for the advisor's time	About $300 per hour	A specific question or a single decision
One-time plan (project fee)	A flat fee for a written financial plan	About $3,000	People who want a plan and will carry it out on their own
Retainer or subscription	A flat fee paid monthly, quarterly, or annually for ongoing advice	About $4,500 per year	Ongoing advice that isn't tied to investment account size
Commissions	The advisor is paid by a product company when you buy a product	Varies, and is built into the product's cost	Product purchases, like certain insurance or annuities

Source: The Kitces Report, “How Financial Planners Actually Do Financial Planning” (2024). Commission amounts were not part of the study.

Keep in mind that these are medians. Fees vary widely based on where the advisor is located, their credentials, and how complex your situation is.

What Would the Same Owner Pay Under Each Model?

Using 2024 median fees, here's what an individual with $300,000 in investment accounts, might pay in a year under each model:

Model	Illustrative annual cost
Hourly (10 hours of planning)	About $3,000
One-time financial plan	About $3,000, once
Retainer	About $4,500
Percentage of assets (1%)	About $3,000, rising as investments grow

The totals look similar, but what's included can be very different. That's why comparing scope matters more than comparing price.

Costs Beyond the Advisory Fee

Depending on how an advisor works, your total cost may also include:

Expense ratios on mutual funds and ETFs
Custodian, platform, or transaction fees
Commissions built into insurance or annuity products
Separate fees for services like tax preparation

Ask for your all in annual cost, not just the advisory fee.

Why Percentage-of-Assets Fees Work Differently for Business Owners

The most common way advisors charge is a percentage of the investments they manage, and for many people it works well. For business owners, though, it can leave a gap.

Here’s an example. Maria owns a Tampa business worth an estimated $2.5 million. She also has $300,000 in retirement and investment accounts. At 1%, an asset-based fee on her investments would be about $3,000 per year.

The question is whether the advice covers the $2.5 million part of her balance sheet: how she pays herself, what she owes in taxes, how much cash the business needs to keep, and what happens when she eventually sells. Those decisions may have a bigger impact on her financial future than her investment portfolio does.

That doesn’t make asset-based pricing wrong. If you already have a large investment portfolio and mainly want someone to manage it, it may be a good fit. But if most of your financial complexity lives inside your business, it’s worth making sure the fee you’re paying covers that part of your life too.

What Should a Financial Advisor’s Fee Include for a Business Owner?

When you compare quotes, use this checklist to see what’s actually included:

Reviewing your business financial statements and bookkeeping, so your plan is built on accurate numbers
How much to pay yourself, including your salary and distribution split if you’re an S corp
Business cash flow and how much cash your business should keep in reserve
Tracking profitability and the key numbers that drive your business
Tax planning throughout the year, including quarterly estimated taxes
Choosing a retirement plan for your business
Investing outside your business
Insurance for you and your business
Planning for a future sale or exit
Coordination with your CPA, bookkeeper, and attorney

What Does It Cost to Hire a Separate Advisor for Each Piece?

Many business owners already pay several professionals: a CPA to prepare their tax returns, a bookkeeper each month, an advisor for their investments, and sometimes a fractional CFO. Each of those fees may be perfectly reasonable on its own.

The challenge is that each professional may be focused on a different piece of the picture, and it isn't always clear who is responsible for connecting them. When you're comparing costs, add up what you pay across all of them and consider whether any important decisions are falling through the cracks.

For example, an S Corp salary might not get revisited as the business grows, or the owner may reach year-end without having adequately planned for the tax bill.

For a deeper look at the differences, read how to choose a financial advisor for business owners.

If you'd like an example of how a flat-fee firm prices these services, you can see ours on our Plans & Pricing page.

Questions to Ask About an Advisor’s Fees

Before you hire an advisor, ask:

What is my total annual cost, including any fund, platform, or account fees?
What’s included in that fee, and what costs extra?
Are you paid in any other way, like commissions or referral fees?
Is the fee negotiable, and how will it change over time?
How do I end the relationship, and are unearned fees refunded?

An advisor should be able to answer each of these clearly.

Finding the Right Fit for Your Business

The right fee depends on what you need. If you have one question, paying by the hour may be all you need. If you want a full plan, a one-time project fee may fit. And if your business and personal finances are closely connected, an ongoing relationship that covers both sides may be worth considering.

If you’re a business owner in Tampa Bay or elsewhere in Florida, you can explore our financial planning services for business owners or book a consultation to talk through what kind of help makes sense for you.

Frequently Asked Questions About Financial Advisor Costs

How much does a financial advisor cost per year?

It depends on how the advisor charges. According to 2024 Kitces Research, the median asset-based fee is about 1% per year on portfolios up to $1 million, and the median retainer is about $4,500 per year. Hourly advisors charge a median of about $300 per hour, and a one-time financial plan costs a median of about $3,000. These figures are based on 2024 research, so treat them as industry reference points rather than exact current prices.

Is a financial advisor worth the cost for a small business owner?

It depends on how complex your situation is and how much help you need. Owners with irregular income, S corp payroll decisions, growing tax bills, or plans to sell their business often have more decisions where coordinated advice can help. Weigh the cost against the scope of help you’re getting, not just the price.

Are financial advisor fees tax-deductible?

Under current federal law, personal investment advisory and financial planning fees are generally not deductible by individuals. Certain professional fees that are ordinary and necessary expenses directly related to operating a trade or business may be deductible, depending on the nature of the services and who incurred the expense. Talk with your tax professional about how the rules apply to your specific situation.

What is a fee-only financial advisor?

A fee-only financial advisor is paid only by their clients, through fees like an hourly rate, a flat retainer, or a percentage of assets. They don’t earn commissions for selling financial products.

Do flat-fee advisors cost less than percentage-based advisors?

Not always. For someone with a smaller investment portfolio, a percentage-based fee may cost less. For someone with larger investments, or whose planning needs are mostly about their business, a flat fee may cost less or cover more. The best comparison is your total annual cost and what’s included.

This content is provided for educational and informational purposes only and should not be construed as investment, tax, or legal advice. It is not intended as a solicitation or offer to provide advisory services in any jurisdiction where Off the Bay Wealth, LLC is not properly registered or otherwise permitted to operate. Information presented is based on sources believed to be reliable; however, accuracy and completeness are not guaranteed. This material is not intended to be a comprehensive analysis of all topics discussed. IRS provisions are subject to ongoing guidance and regulatory updates. Any financial decisions should be made in consideration of your individual circumstances, including your goals, risk tolerance, and time horizon. Investing involves risk, including the potential loss of principal.