Is financial advice worth paying for? Investors share their perspectives

Financial advice can be a meaningful source of guidance and support for investors. That’s true whether you’re working toward a long-term goal like retirement or managing shorter-term issues like deciding whether to buy or lease a car. However, assessing the value of that advice can be challenging for investors. (See “Why is it so hard to measure the value of financial advice?”)

Research from T. Rowe Price shows that certain aspects of advice—including advice that goes beyond investment selection—may be particularly valuable. If you’re thinking about paying for financial advice, which often costs 0.5% to 1% of your assets under management in addition to any investment fees, it’s worth considering where other investors find value in that process. Doing so can help you gain clarity about whether advice might be valuable in your circumstances.

Why is it so hard to measure the value of financial advice?

Researchers estimating the value of advice have arrived at a range of numbers, from roughly 2.6% to over 4% of assets managed annually,¹ and they acknowledge that the value someone realizes depends on many factors. Here are a few reasons it is a challenging exercise:

• Some aspects of advice are relatively quantifiable (e.g., benefits of rebalancing), whereas others are difficult to measure (e.g., the value of peace of mind that ongoing advice provides).
• There is no industrywide consensus on how to categorize different aspects of advice. For example, some researchers use broad categories such as “financial planning,” whereas others break out services such as tax planning and retirement planning. In addition, there can be considerable overlap between categories, particularly with an aspect such as taxes that touches many other areas.
• The value of advice can vary widely by individual. Tax planning is an obvious example—the value depends heavily on income, wealth, and types of investments or accounts. The value of less quantifiable aspects such as goal setting or behavioral coaching might depend on personality, temperament, and other personal characteristics as much as on financial circumstances.
• Services provided by financial professionals also vary widely.

How investors value advice

In our Global Retirement Savers Study², we asked investors to assess the value of various aspects of advice, ranging from asset allocation and investment selection to tax planning, behavioral coaching, and estate planning.

Most of the advice aspects most valued by people who use advisors—namely, retirement planning, tax planning, investment selection, and asset allocation—were those that are more readily quantifiable than other aspects. However, since our previous study in 2021, aspects which are more behavioral in nature have become much more valued by workers. (See “How investors rank the value of advice aspects.”)

Key findings and insights

Investors’ perceptions of value tend to vary based on lifestage and circumstances. Retirees who rely on advisors overwhelmingly value investment selection over other aspects of advice. The gap between those who rely on advisors and those who don’t is by far the largest for investment selection (62% versus 11%, respectively, considering it very valuable).

By comparison, investors who are working tend to value retirement planning and prioritizing goals most highly. These findings may display some generational effect, since financial advice historically has been more focused on investments than financial planning.

The complexity of one’s circumstances also may have an influence on the perception of value. For example, people with higher balances in a taxable brokerage or investment account rely much more heavily on advisors than those with lower balances. They are also much more likely to say that each aspect of advice is very valuable.  A higher taxable account balance may indicate that an investor has a more complex financial situation that may particularly benefit from advice.

All told, people who rely on advisors rated more advice aspects as very valuable than those who did not. This result could suggest that finding value in more aspects causes people to pay for advice. However, the reverse could be true in some cases: using an advisor may reinforce the belief that the benefits are valuable.

Considering advice for your circumstances

To gauge the potential value of financial advice in your circumstances, consider the experiences of people like you. For example, if you are retired, you may appreciate the fact that older retirees are more likely to rely on advisors than younger people. Perhaps—like many retirees—you will want someone else to handle investment selection when you are retired. Likewise, if you have investments outside of retirement plans, there are compelling reasons to consider financial advice, according to the survey, including the value of tax planning and asset allocation.

It’s also worth bearing in mind that your situation might not be reflected in the survey results. For example, retirees value support for prioritizing goals and ongoing decision-making less than most other aspects of advice. Yet this type of advice can be a critical component of making, and sticking to, a long-term plan—which in turn can have a substantial effect on investment and financial outcomes. Take an honest look at yourself and think about whether you would benefit from help identifying potential blind spots in your own thinking. Even if you don’t usually make behavioral investment mistakes, if an advisor can save you from making just one every five to 10 years, that could be worthwhile. (See “Could you benefit from financial advice?”)

If you think a few aspects of advice are valuable, there is a good chance that financial advice will be worth the price. For the typical advice user who considers three aspects very valuable, an advisory fee of 0.5% to 1% of assets may be justified without making unrealistic assumptions about the value of any one aspect.

Tax and estate planning services are also highly valued by many people who pay for financial advice. T. Rowe Price generally recommends consulting with professionals in those specialties. A financial professional who offers a broader range of services can help connect you with these specialists and coordinate those areas with other aspects of your financial plan.

Paying for financial advice is not a necessity in every situation. However, our research reveals that investors in a variety of circumstances find advice a valuable addition to their financial planning. Think about what you would value from advice. You may especially want to consider the aspects of advice that go beyond investments, many of which are increasingly provided by financial professionals who can help you define and work toward your goals.

Could you benefit from financial advice?

A guide to determining whether your circumstances may warrant expert support

T. Rowe Price research has revealed the factors and circumstances that lead many investors to find value in paying for financial advice. Consult the following questions to determine whether the same may be true for you. If you answer yes to some of the following questions, you may want to consider paying for financial advice.

• Do you have assets in taxable accounts?
• Are you approaching retirement?
• Do you have a need for tax and estate planning services or help coordinating with those specialists?
• Do you typically find it helpful to talk about your financial goals and priorities?
• Are you concerned about making emotion-driven investing decisions?

Financial and retirement advice, centered on you.

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* An average net advisory fee of .5% for the service assumes the use of primary funds and neutral portfolio weightings. Your actual net advisory fees will vary depending on your recommended model portfolio, the specific mix of funds in your managed portfolio, and their fees and expenses. The estimated net advisory fees for the model portfolios ranged from 0.41% to 0.55% as of April 2025. You will also pay the fees and expenses of the funds held in your managed portfolio. The total cost you are expected to pay, including the net advisory fee and the underlying fund fees and expenses, is approximately .9% of assets under management. For additional information on fees and expenses of the service, please read the Fees and Compensation section of the Retirement Advisory Service ADV Brochure (PDF).

Investments in the T. Rowe Price Retirement Advisory Service^TM are subject to the risks associated with investing in mutual funds and exchange-traded funds, which may result in loss of principal. T. Rowe Price does not guarantee the results of our investment management, or that the objectives of the funds or portfolios will be met.

ETFs are bought and sold at market prices, not net asset value. Investors generally incur the cost of the spread between the prices at which shares are bought and sold and may incur additional transaction costs.

The T. Rowe Price Retirement Advisory Service™ is a nondiscretionary financial planning and retirement income planning service and a discretionary managed account program provided by T. Rowe Price Advisory Services, Inc., a registered investment adviser under the Investment Advisers Act of 1940. Brokerage accounts for the Retirement Advisory Service are provided by T. Rowe Price Investment Services, Inc., member FINRA/SIPC, and are carried by Pershing LLC, a BNY Mellon company, member NYSE/FINRA/SIPC, which acts as a clearing broker for T. Rowe Price Investment Services, Inc. T. Rowe Price Advisory Services, Inc. and T. Rowe Price Investment Services, Inc. are affiliated companies.

 

Full wording of advice aspects in the Global Retirement Savers Study:

• Retirement planning, including budgeting, withdrawal strategy, Social Security, health care expenses, and annuities.
• Prioritizing goals, setting saving targets, and monitoring progress
• Tax planning, including tax-efficient investments, accounts, and management of gains and losses.
• Asset allocation (the mix of categories such as stocks and bonds) and portfolio rebalancing
• Investment selection by the advisor
• Ongoing help with decision-making and behavioral coaching, including maintaining a strategy, encouraging saving, and handling setbacks such as market volatility.
• Estate planning and other non-investment guidance