What you pay a financial advisor depends on how they are paid: by the hour for a plan, by commission on what they sell, or by a percentage of the assets they manage. Most mutual fund companies pay the advisor’s firm a trailing commission, which the Ontario Securities Commission’s investor site says typically runs 0.25% to 1.5% of your investment a year, out of the fund’s management fee. In a fee-based account you pay the advisor a yearly fee instead, which the same site says is typically negotiated between 1% and 2%. A robo-advisor generally charges a percentage of the portfolio’s value. The funds themselves also carry costs: their management expense ratios (MERs) range from under 1% to over 3%, paid by the fund and taken out of its returns.
The kinds of advisor and how to check one are in how to choose a financial advisor, and planners paid by you for advice alone are described in fee-only financial advisors.
How are financial advisors paid, and what does each model cost?
| Pay model | How you pay | Typical cost |
|---|---|---|
| Trailing commission (mutual funds sold with advice) | The fund company pays the advisor’s firm each year you hold the fund | 0.25% to 1.5% a year, inside the MER |
| Front-end sales charge | A percentage of what you invest, paid to the firm when you buy | Up to 5%, negotiable |
| Commission or trading fee | Per trade, when the advisor buys a stock for you | Varies by firm |
| Fee-based account | A yearly advisory fee on the account, with no sales charges on funds | Typically 1% to 2% a year, plus fund costs |
| Hourly or flat fee for advice | A fee for a plan or a set of questions | See what a plan costs |
| Robo-advisor | A yearly fee on the portfolio, or a flat monthly fee | See robo-advisor fees compared |
The trailing commission is paid for as long as you hold the fund, and because it comes out of the management fee you don’t see it as a separate charge. A front-end load can be up to 5% of the amount invested, goes to the firm that sells you the fund, and can be negotiated. The FCAC lists a commission or trading fee when an advisor buys a stock for you, and an hourly fee for creating a plan. A fee-based account replaces sales charges with one yearly advisory fee, and one dealer’s published schedule starts its program fee at 1.5% with lower rates at higher asset levels. Robo-advisors generally charge a percentage of the portfolio, some charge a flat monthly fee, and trading or administrative fees may be added.
Two rules changed what you can be charged. Since June 1, 2022, funds can no longer be bought with a deferred sales charge (units bought that way before then are still subject to their redemption fee schedule), and funds that pay trailing commissions can’t be sold in self-directed accounts. “Fee-based” and “fee-only” sound alike: a fee-based account replaces sales charges with one yearly advisory fee, while advice-only planners, as their association’s directory describes them, take no commissions and sell no products; fee-only financial advisors compares the two.
What do you pay in total?
The FCAC’s list of what to know before hiring an advisor is the services they provide, what those cost and how you pay. The total is the advice fee plus what the investments themselves cost. A fund’s MER is charged inside the fund, so it reduces your return even though you don’t pay it directly. In a fee-based account you also pay your advisor a yearly advisory fee directly, instead of sales charges, and the fund series sold for such accounts generally pays no trailing commission and has a lower management fee.
You can find a fund’s fees in its Fund Facts and simplified prospectus. CIRO’s cost reporting rules require dealers’ annual fee and charges report to show the total fund expenses you paid in dollars, starting with the report for the year ending December 31, 2026. How to read an investment account statement shows where these appear.
On taxes, the CRA lets you claim, as carrying charges on line 22100 paid to earn income from investments, fees to manage or take care of your investments (but not fees for services connected with registered plans such as a TFSA, FHSA or RRIF) and fees for certain investment advice. Commissions paid to buy or sell securities aren’t deducted there; they go into the calculation of your capital gain or loss. The CRA’s list names fees to manage your investments and fees for certain investment advice; the CRA’s carrying charges page has the details.
What do the pay models cost over time?
A worked example with assumed costs, not any firm’s prices: a portfolio of $250,000 earning 5% a year before costs, held for 20 years with no new money. Each set-up’s yearly cost is taken off the return every year.
- A. Mutual funds sold on commission: all-in cost 2% a year, trailing commission included.
- B. Fee-based account: advisory fee 1% plus funds at 0.5%.
- C. A plan from an advice-only planner, carried out yourself: a $3,000 plan every 5 years, plus index ETFs at 0.2%. The plan fee is spread evenly over the years between plans, as a share of the starting balance.
- D. Robo-advisor: all-in cost 0.7% a year.
| Set-up | Yearly cost | First-year cost | Value after 20 years |
|---|---|---|---|
| A. Commission mutual funds | 2.00% | $5,000 | $451,528 |
| B. Fee-based account | 1.50% | $3,750 | $497,447 |
| C. Advice-only plan and ETFs | 0.44% | $1,100 | $609,890 |
| D. Robo-advisor | 0.70% | $1,750 | $580,265 |
Each value is the balance times (1 + return − yearly cost) to the power of the years. The gap between the rows grows each year, because a cost also removes the growth that money would have earned. The set-ups buy different things: ongoing advice and management in A and B, a plan you carry out yourself in C, automated management in D. The table compares costs, not what each is worth to you.
The MER calculator lets you try the same comparison with your own numbers.
How much does a financial plan cost on its own?
The FCAC says some independent financial planning companies or consultants charge a fee. For example, one advice-only firm lists $3,500 to $4,000 for a single person’s detailed retirement plan, and from $5,000 for a comprehensive plan. That firm also describes its fees as generally flat project fees or ongoing annual fees, with hourly options. Fee-only financial advisors explains what such an engagement covers.
What should you ask about fees?
Under the client focused reforms, your advisor must tell you about fees, costs and risks. Questions drawn from the FCAC and the Ontario Securities Commission’s investor site:
- How are you paid: salary, commission, a percentage of my assets, or a combination?
- What will I pay in total each year, in dollars, including the funds’ MERs?
- Do the funds you recommend pay you or your firm a trailing commission?
- Are there fees to switch funds, or to sell soon after buying?
Who can charge you, and how do you check them?
By law, people who sell mutual funds, stocks and bonds must complete training and register with a provincial or territorial securities regulator; the National Registration Search shows whether an advisor is registered, and the FCAC suggests asking whether any restrictions, terms or conditions have been placed on that registration.The kinds of advisor, what each may sell and how to check registration are in how to choose a financial advisor. This page is part of our financial planning guides.
Sources
The figures and rules on this page come from these sources, last checked against them between September 25, 2026 and October 1, 2026. How we check facts.
- bcsc.bc.ca: Notice and Request for Comment Template - 2021 02 10
- edwardjones.ca: Fees
- Financial Consumer Agency of Canada: Choosing a financial advisor
- GetSmarterAboutMoney.ca: Mutual fund fees | GetSmarterAboutMoney.ca
- GetSmarterAboutMoney.ca: How to choose a financial advisor
- objectivefinancialpartners.com: Fees