Advisor Selection

How Physician Financial Advisors Actually Get Paid

By the Attend Wealth team · Updated August 2026 · 8 min read

There are only five ways an advisor can be paid, and every one of them creates an incentive. Understanding which incentive you are living with is more useful than looking for a model with none.

Quick answer

Advisors are paid through assets under management fees (typically around 1% annually, often scaling down at higher balances), flat annual retainers, hourly rates, per-plan project fees, and commissions on products such as insurance and annuities. Most firms use some combination. Each model creates a different conflict: AUM discourages advice that reduces investable assets, flat fees can under-serve complex clients, and commissions incentivize product sales.

Assets under management

The dominant model. The advisor charges an annual percentage of the portfolio they manage, commonly around 1% at moderate balances and stepping down as assets grow. It is convenient, it scales with the client, and it aligns the advisor with portfolio growth.

Its conflict is specific and often unspoken: an AUM advisor is paid less when you do things that reduce investable assets. Paying off student loans aggressively, buying a practice, making a large charitable gift, or funding a real estate purchase all shrink the fee base. That does not mean AUM advisors give bad advice on these questions. It means you should notice the incentive when the advice consistently points toward keeping money in the portfolio.

Flat annual retainer

A fixed dollar fee, often somewhere between a few thousand and twenty thousand dollars a year depending on complexity, unrelated to portfolio size. This is increasingly popular among physician-focused planners and it removes the AUM conflict entirely.

The trade-off is that a flat fee can look expensive to a physician with a small portfolio and cheap to one with a large portfolio, and firms have an incentive to take on clients whose complexity is lower than the fee implies. It is a strong model for high-income physicians with large loan balances and modest invested assets, which describes most new attendings.

Hourly and project fees

Pay for the hours or the deliverable. Best suited to physicians who want a second opinion, a one-time plan, or help with a specific decision such as a contract review or a refinance analysis, and who intend to implement it themselves.

The conflict is mild but real: hourly billing rewards time spent, and project work rewards closing the project rather than the outcome six years later. For residents and fellows who need answers rather than ongoing management, this is often the cheapest correct choice, and any advisor who tells you otherwise should be questioned.

Commissions

Paid by the product issuer, not billed to you directly, which is why they are easy to overlook. Insurance is the main category for physicians. First-year commissions on individual disability and permanent life policies are a substantial share of premium, and renewal commissions continue in smaller amounts for years.

The conflict here is the most direct of the five: the advisor earns nothing if you buy nothing. Attend Wealth is fee-based and earns commissions on insurance placed through our carriers. We think that is defensible because insurance implementation requires a license someone has to hold, but we also think you should ask for the dollar figure before you sign, and we will give it to you.

Revenue sharing and soft dollars

The least visible category. Some firms receive payments from fund companies, custodians, or platforms tied to where client assets are held or which products are used. Twelve b-1 fees on mutual funds are the classic example.

This is the one to ask about explicitly, because it rarely appears in a fee conversation and it is disclosed in Form ADV in language most people skim. Ask whether the firm receives any compensation from any source other than you, in any form, and ask for it in writing.

How to compare two firms honestly

Ask both for total compensation in dollars, from all sources, in year one and again in year five, assuming your actual situation. Not percentages. Dollars. Then compare the two numbers against what each firm is actually going to do for you.

A physician who runs this exercise usually discovers that the models are closer in cost than the marketing suggests, and that the real difference is scope of work. That is the right thing to be choosing on.

Related physician planning questions

How much does a financial advisor cost for a physician?

AUM fees commonly run around 1% annually at moderate balances, scaling down as assets grow. Flat annual retainers for physician-focused planning typically range from a few thousand to roughly twenty thousand dollars depending on complexity. Hourly rates vary widely by market. Insurance commissions are paid by the carrier out of premium rather than billed to you.

Which advisor fee model is best for physicians?

It depends on career stage. Residents and fellows with high debt and low investable assets are usually served best by hourly or flat-fee arrangements. Mid-career physicians with substantial portfolios often find AUM or flat-fee comparable in cost. Physicians with significant insurance needs should understand how implementation will be handled and paid for under either model.

What conflict does an AUM fee create?

An AUM advisor earns less when assets leave the portfolio, which means paying down debt, buying into a practice, making large gifts, or purchasing real estate all reduce their compensation. It does not make the advice wrong, but it is worth noticing if recommendations consistently favor keeping money invested.

Are advisor commissions disclosed?

Registered investment advisers must disclose material conflicts of interest, including commission compensation, in Form ADV Part 2A and Form CRS. Broker-dealers disclose through Form CRS and transaction confirmations. You can also simply ask for the dollar amount before purchasing, and a straight answer should be forthcoming.

Related insights

See how this fits into a physician-focused plan.

Attend Wealth helps physicians connect planning, taxes, investing, insurance, and retirement decisions into one strategy. If you want help applying this topic to your own loans, taxes, investments, or retirement plan, schedule a complimentary conversation.

This article is for educational purposes only and is not personalized financial, tax, or legal advice. Attend Wealth is a registered investment adviser and acts as a fiduciary to its advisory clients. Attend Wealth is fee-based: in addition to advisory fees, our advisors are licensed insurance professionals and may receive commissions on insurance policies placed through carriers including Guardian, MassMutual, Ameritas, Principal, The Standard, and Lloyd's. That compensation creates a conflict of interest. We describe it, and how we address it, in our Form ADV Part 2A and Form CRS, available at adviserinfo.sec.gov or on request. Please consult a qualified professional about your specific situation.