If you’ve ever searched for a financial advisor in Johnson City, Oak Ridge, or anywhere in East Tennessee, you’ve probably noticed that pricing is rarely straightforward. 

Some advisors charge a percentage of your assets. Others charge flat fees, hourly rates, or nothing upfront — earning their income through commissions instead. For East Tennessee families trying to make a smart decision about who to trust with their retirement savings, understanding how advisors get paid isn’t just helpful. It’s essential.

This guide breaks down every major fee structure you’ll encounter, what they actually cost, and why the model your advisor uses matters just as much as the number on the invoice.

Why advisor fees matter more than most people realize

Most people focus on finding an advisor they like and trust — which is important. But how that advisor gets paid determines whose interests they’re actually serving when they make recommendations. An advisor compensated through commissions has a financial incentive to recommend certain products. An advisor paid through fees alone has no such conflict.

That distinction can have a real impact on your retirement. Research consistently shows that conflicted advice — recommendations driven by compensation rather than client outcomes — costs investors an estimated 1% of returns per year. On a $700,000 portfolio over 20 years, that’s a significant amount of wealth quietly eroding in the background.

Tennessee families deserve to understand exactly what they’re paying for and why. Here’s what you need to know.

The Four Main Fee Structures

1. Assets under management (AUM)

This is the most common fee structure among full-service financial advisors. The advisor charges an annual percentage of the total assets they manage on your behalf, typically between 0.50% and 1.25% depending on portfolio size and the scope of services provided.

For example, if you have $800,000 invested and your advisor charges 1%, you’re paying $8,000 per year. As your portfolio grows, so does the fee — which aligns the advisor’s financial interest with yours. When your portfolio performs well, they earn more. When it declines, they earn less.

AUM fees are common among fee-only advisors, meaning the fee itself is the only compensation — there are no hidden commissions or product incentives layered underneath. This transparency is one reason many East Tennessee families prefer this structure.

At Roan Capital Partners, our fees are structured as a flat fee based on assets under management, fully transparent and clearly documented in your statements.

2. Flat fee or retainer

Some advisors charge a fixed annual or monthly fee for a defined scope of services, regardless of how much you have invested. This model is common for comprehensive financial planning that goes beyond investment management — covering retirement income planning, tax strategy, estate planning coordination, and more.

Flat fees can range widely depending on the complexity of your situation and the depth of services provided. A straightforward retirement planning engagement might run $2,000 to $5,000 per year, while a more complex arrangement for a business owner or high-net-worth family could be significantly higher. The key advantage is predictability — you know exactly what you’re paying, and the advisor has no incentive to grow your assets simply to grow their own fee.

3. Hourly fees

Hourly financial planning is less common but worth understanding. Some advisors charge for their time on a project or consultation basis, typically ranging from $150 to $400 per hour depending on experience and credentials. This model works well for people who need specific guidance on a single decision — reviewing a pension payout option, evaluating a job offer with complex benefits, or getting a second opinion on an existing plan.

The limitation is that hourly advisors often don’t provide ongoing monitoring or a long-term relationship. For someone approaching retirement or managing a significant portfolio, a one-time consultation rarely replaces the value of a comprehensive, ongoing planning relationship.

4. Commission-based compensation

Commission-based advisors do not charge you a direct fee. Instead, they earn compensation from the financial products they sell — mutual funds, annuities, life insurance policies, and similar instruments. When they recommend a product, a portion of your investment goes back to them as a commission, often without you ever seeing it as a line item.

This doesn’t mean commission-based advisors are dishonest. Many genuinely care about their clients. But the structure creates an inherent conflict of interest: the advisor may be inclined — even unconsciously — to recommend products that pay higher commissions over those that would serve you better. In Tennessee, commission-based advisors are only held to a suitability standard, meaning they’re required to recommend products that are suitable for you, not necessarily the best option available.

This is the key distinction from a fiduciary. A fiduciary advisor is legally and ethically required to act in your best interest at all times. Not every advisor in Tennessee is a fiduciary, and the difference can have a lasting impact on your financial outcomes.

Fee-only vs. Fee-based: A Distinction Worth Understanding

These two terms sound nearly identical, but they describe very different models. A fee-only advisor is compensated exclusively by client fees — no commissions, no referral payments, no product incentives of any kind. A fee-based advisor charges client fees but also accepts commissions on certain products, which reintroduces potential conflicts of interest.

When you’re evaluating advisors in Tennessee, asking “Are you fee-only?” is one of the most important questions you can ask. A straightforward “yes” means their only financial incentive is to serve you well.

What Should You Expect to Pay in Tennessee?

Based on industry data and current market rates, here’s a general guide to what Tennessee families can expect across fee structures:

For AUM-based advisors, annual fees typically range from 0.50% to 1.25% of assets managed. On a $600,000 portfolio, that translates to roughly $3,000 to $7,500 per year. Most full-service advisors in the Johnson City and Oak Ridge markets fall within the 0.75% to 1% range for portfolios of this size.

For flat fee arrangements, annual retainers generally range from $2,000 to $10,000 depending on the complexity of services and the advisor’s credentials and experience.

For hourly planning, expect rates of $150 to $400 per hour, with most comprehensive planning projects requiring several hours of work.

Commission-based advisors may appear to cost nothing upfront, but the embedded costs in commission-based products are real — they’re simply less visible.

One important note for Tennessee residents: because the state has no income tax, your take-home income and retirement distributions are not taxed at the state level. This gives East Tennessee families a structural advantage when it comes to affording comprehensive financial planning, and it also makes tax-efficient withdrawal strategies particularly valuable in retirement.

Questions to Ask Any Tennessee Financial Advisor about Their Fees

Before engaging a financial advisor in Johnson City, Oak Ridge, Crossville, or anywhere in East Tennessee, you deserve clear answers to the following:

• How are you compensated? 
• Are you a fiduciary at all times, or only in certain situations? 
• Do you earn commissions or referral fees from any products you recommend? 
• What services are included in your fee, and what costs extra? 
• How will you communicate with me, and how often?

If an advisor is unwilling or unable to answer these questions clearly, that itself is useful information. For a full list of questions to bring to your first meeting, check out our comprehensive guide.