If you've ever thought about working with a financial planner, you probably noticed that it's tough to find their fees or pricing - and some of them don't even list it on their website.

This is crazy to me.

Why?

Because working with a financial planner is a big personal decision and I believe it's important to have all of the information available so you can make the best decision for yourself.

And there are so many different kinds of financial planners and pricing models out there - which makes it even more confusing - and they all have their pros and cons.

So we're diving into 5 of the most common ways financial planners are paid by clients and how much each typically costs:

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Asset Under Management (AUM) Fee

This is the most common way that financial advisors charge for their services. Historically, advisors have had minimum net worth requirements to work with them because the fee paid depends on how much money you have invested with them, so they want to ensure the fee is worth their time.

A common net worth minimum requirement is $250,000.

AUM fees are typically billed as a percentage of assets:

For example, if you had $500,000 invested with an advisor and they charged 1% AUM, the annual fee would be $5,000.

Also read: The Real Cost of Investment Fees

Also read: How a 1% Fee Could Cost Millennials $590,000 in Retirement Savings

Typical cost: 0.3%-1% annual fee

What you (generally) receive: Investment management, custom portfolio(s)

Monthly Subscription

A popular pricing model as of late, the monthly subscription makes financial advice more accessible. This model makes sense for many young professionals as the monthly subscription can be offered to anyone, regardless of net worth or investable assets (like the AUM model).

Typical cost: $100-$500+/month

What you (generally) receive: Comprehensive financial planning (cash flow/budgeting help, debt management, insurance reviews, goal setting, life planning, investment management)

Commission-based

If you've ever been offered or sold a product by a "financial advisor", they were most likely commission-based. Commission-based advisors are not necessarily required to act in your best interest and may offer products that provide them with a higher commission, which may not the best solution for your situation.

If working with a commission-based advisor, ensure that you understand their incentives and the pros and cons of what's being offered to you.

Typical cost: Varies based on product

What you (generally) receive: Insurance policies, investment products

Project-based

Project-based financial planning is designed to solve a few of your most pressing financial concerns. Popular with DIY investors, these are typically one-time engagements and can be used for a second opinion on current strategies, a tax review, or a creation of a debt pay off plan.

Typical cost: $250-$1,500+

What you (generally) receive: One-time assistance in resolving your most pressing problems​

Flat-fee

The flat-fee model is preferred by many investors as it offers a transparent, simple fee. The fee can be billed monthly, quarterly, or annually and provides investors with a clear understanding of what they're paying.

A flat-fee service may consist of building a full, one-time financial plan - or it may be an on-going relationship that's simply billed annually.

Typical cost: $1,500-$3,000+

What you (generally) receive: Comprehensive financial planning (cash flow/budgeting help, debt management, insurance reviews, goal setting, life planning, investment management)​

Overall, the most important thing to do if you aren't sure how an advisor is getting paid is ask questions.

I created a guide that highlights 7 important questions to ask when meeting with a financial advisor - no email required:

Free Download: 7 Questions to Ask When Meeting With a Financial Planner​

And if you want to make sure you aren't being sold products that you don't need, look for a fee-only financial planner. The only compensation they receive is the fee that you pay them. Here are 3 websites that feature databases of fee-only financial planners:

​XY Planning Network​

​Fee-Only Network​

​Advice-Only Financial​