Choosing the Right Advisor
Choosing the Right Financial Advisor Starts with Understanding the Model — Not Just the Person
“Show me the incentive, and I’ll show you the outcome.”
— Charlie Munger – Longtime partner of Warren Buffett
Before You Choose an Advisor, Understand How They’re Paid
When it comes to financial advice, few things matter more than understanding how an advisor is compensated. It often tells you more about what to expect than any sales pitch, planning process, or credentials.
Hiring a financial advisor is a big decision—especially as you approach retirement. But it doesn’t have to mean interviewing a dozen firms or trying to decode industry jargon. Most advisors are great communicators—they have to be. Whether they call themselves planners, consultants, or wealth managers, their answers often sound reassuring, and their websites emphasize trust, relationships, and customization.
But behind every polished pitch is a business model. That model quietly shapes how advice is delivered, how often you’ll hear from the advisor, and what it ultimately costs.
This guide is designed to save you time and frustration. By understanding how an advisor gets paid—and what that means in practice—you can quickly place them into one of a few clear categories. From there, it’s easier to spot trade-offs, identify what kind of relationship you’re actually signing up for, and decide whether their structure fits your needs.
“Are you a fiduciary?” is a popular question to ask—on the surface, it sounds like the gold standard. And while the term has meaning, it’s not always as helpful as people think.
These days, nearly every advisor calls themselves a fiduciary. But the reality is this:
- An advisor who charges a percentage of your assets may be a fiduciary—but that doesn’t stop their fee from growing as your wealth does, regardless of how much work they’re doing.
- A commission-based advisor can still technically be a fiduciary at certain times, as long as they disclose conflicts.
- Some advisors are fiduciaries when delivering a financial plan—but not when recommending investment or insurance products.
In short, the term “fiduciary” has been stretched to fit just about any business model. That makes it nearly meaningless without understanding how the advisor is paid and when fiduciary duty applies.
Better Questions to Ask
- How are you compensated?
- Do your fees change based on my portfolio size or the products I use?
- Are there any commissions, referral payments, or other incentives involved?
- Will you continue to work with me after the plan is delivered, or is it one-time advice?
The Two Core Services Advisors Provide
Most financial advisors offer one or both of the following:
Investment Management
- Portfolio design and asset allocation
- Rebalancing and ongoing oversight
- Tax-loss harvesting and trading
- Adjusting strategy based on life stage and risk tolerance
Financial Planning
- Retirement income and withdrawal strategies
- Social Security and Medicare decisions
- Tax minimization (e.g., Roth conversions)
- Estate and legacy planning
- Insurance analysis
- Education and gifting strategies
- Cash flow and budget planning
- Coordination with your CPA or attorney
Some advisors primarily focus on investment management, often including a level of financial planning—though the depth, frequency, and whether it’s charged separately can vary widely. Others may offer planning only, with no ongoing investment management.
Common Advisor Business Models (That We Don’t Use)
AUM (Assets Under Management)
Commission-Based / “Fee-Based”
Hourly or Project-Based
AUM (Assets Under Management)
Fee Model Summary:
Percentage-based,
typically 1% of assets
What to Expect:
- Investment Management: Fully included
- Financial Planning: Deep, ongoing, and integrated
Advisor Perspective:
- Fees are typically based on a percentage of assets under management — as your portfolio grows, so does the advisor’s compensation
- Service models vary widely: some advisors work solo, while others offer access to a full team of specialists
- Incentivizes advisors to seek out the largest net worth clients
Best For:
- Investors seeking a relationship-driven experience with access to ongoing planning and investment management
- High-net-worth individuals who want coordination with in-house specialists like estate attorneys, CPAs, or insurance professionals
- Clients who value simplicity and are comfortable with fees that scale as their wealth grows
- Smaller accounts may receive more limited service depending on how the firm prioritizes time and resources
Final Thoughts:
The AUM (Assets Under Management) model is the most common in the industry and can work well for many investors. It typically offers a bundled experience that may include investment management, financial planning, and—in some firms—access to a broader team of professionals.
However, it’s important to understand how much the client experience and level of service can vary from one firm to the next. A key drawback of this model is fee disparity: two clients receiving similar service may pay dramatically different fees simply because their portfolios are different sizes.
Another consideration is investment philosophy. If the advisor is primarily using diversified, low-cost index funds to target market-level returns, it raises a fair question: is a 1% annual fee on your total investment balance justified when the strategy itself is designed to track the market? If they say this is justified by ancillary services, make sure those services align with what YOU need.
For some investors, the bundled support and ongoing relationship are worth the premium. For others—especially those who want their fees to reflect complexity and service rather than portfolio size—a flat-fee model may offer stronger long-term alignment.
Commission-Based / “Fee-Based”
Fee Model Summary:
Paid via product commissions, sometimes visible, sometimes embedded in product costs
What to Expect:
- Investment Management: Often tied to products sold
- Financial Planning: Rarely included, or presented as a sales tool for a product
Advisor Perspective:
- Incentivized to sell commissionable products like insurance and annuities
- Advice may be influenced by compensation, not objective planning
Best For:
- Clients seeking specific insurance or annuity solutions
- Those comfortable with a transactional, sales-oriented relationship
Hourly or Project-Based
Fee Model Summary:
$150–$500/hour or
$1,500–$5,000 per plan
What to Expect:
- Investment Management: Not included
Note: Some advisors may provide a portfolio “prescription,” but implementation is typically left to the client - Financial Planning: Available through one-time or project-based engagements
Advisor Perspective:
- Incentivized to be rehired periodically
- Not responsible for implementation or ongoing results
- Typically provides static, point-in-time advice that doesn’t evolve with your life
Best For:
- DIY investors who want occasional feedback or validation
- Clients looking for a one-time “launch plan” or second opinion
- Those who want to control when and how they pay for advice
- Ideal for investors who want full confidence that the advice is conflict-free and not tied to any product sales or ongoing commitments.
Not Ideal For:
- Investors seeking long-term accountability and oversight
- Clients who want their portfolio and plan actively monitored through market cycles
Final Thoughts:
The hourly or project-based model is refreshingly transparent. It avoids percentage-based pricing, which many view as a more ethical and cost-conscious structure. You only pay for what you use.
It’s especially helpful for investors who’ve been managing their own finances and want a way to dip their toe in the water with professional advice — without committing to an ongoing relationship. If they later decide they want more support, transitioning to an AUM or flat-fee model becomes the logical next step.
That said, this model falls short for those who want year-round strategy, tax oversight, and investment execution. It’s best for confident, self-directed investors — not those seeking a financial partner throughout retirement.
Flat-Fee (Evergreen Model)
Fee Model Summary:
$525/month — no AUM fees, no commissions
What to Expect:
- Investment Management: Fully included
- Financial Planning: Deep, ongoing, and integrated
Advisor Perspective:
- Incentivized to build a long-term, trust-based relationship
- All clients pay the same clear fee — whether they have $500k or $5M
- Support is consistent, proactive, and not based on how much you “generate” for the firm
- Evergreen, like any firm, has its own incentives. Our flat-fee model is built around long-term relationships, so those seeking one-time advice or short-term help may be better served by a different type of advisor.
Best For:
- Pre-retirees and retirees seeking comprehensive, ongoing guidance
- Households that want investment management across all accounts — including tax-sensitive, non-retirement assets
- Clients looking for proactive planning without being treated differently based on net worth
- People who want a trusted advisor already onboarded before major financial decisions arise
Final Thoughts:
Evergreen is especially cost-effective for households with $1M to $5M in assets.
Our flat-fee model often saves clients $3,000 to $40,000 per year
compared to traditional AUM fees — for the same quality of service.
Unlike large firms with rotating teams, Evergreen is a boutique practice. You work directly with Nick — a CFP® and former large-firm advisor — who limits client volume to ensure high-touch service.
Our flat-fee model is built around long-term relationships, so those seeking one-time advice or short-term help may be better served by a different type of advisor.