Flat Fees, Commissions, and Percentages: Decoding How Advisors Really Get Paid

Hiring a financial advisor is one of the smartest moves an athlete can make in the NIL era. But before you trust anyone with your money, you need to understand one critical thing: how they get paid.

An advisor’s fee structure doesn’t just affect your wallet — it can also influence the advice you receive. Some models create potential conflicts of interest, while others are more transparent and client-focused. Here’s a breakdown of the most common ways financial advisors get compensated, and what each means for you.

1. Flat Fees

How it works:
You pay a set amount for the advisor’s services, regardless of how much money you have invested. This could be an annual fee, a quarterly subscription, or even a one-time flat fee for a specific project.

Pros:

• Transparent and predictable.

• Advisor isn’t incentivized to push specific products.

• Works well if you want comprehensive planning but don’t yet have large investments.

Cons:

• Can feel expensive upfront.

• Scope of services may be limited unless you’re paying for a full package.

Best for:
Athletes who want ongoing financial guidance, tax coordination, or NIL-specific planning without tying costs to their investment account balance.

2. Commissions

How it works:
The advisor earns money when you buy certain financial products — like insurance policies, annuities, or investment funds.

Pros:

• You might pay less in planning fees upfront.

• Can make sense if you truly need the product being recommended.

Cons:

• Creates potential conflicts of interest (they may push products that earn them higher commissions).

• Less emphasis on ongoing financial planning.

• Harder to know the true cost unless you ask directly.

Best for:
Athletes who primarily need specific insurance or financial products — but only if the advisor is transparent about costs and alternatives.

3. Percentage of Assets Under Management (AUM%)

How it works:
The advisor charges a percentage (often between 0.25% and 1%) of the assets they manage for you. For example, if they manage $100,000 and charge 1%, you’ll pay $1,000 annually — usually deducted directly from your account.

Pros:

• Advisor’s pay rises as your investments grow — interests are somewhat aligned.

• Ongoing monitoring and portfolio management included.

• Often comes with comprehensive planning and review meetings.

Cons:

• If you don’t yet have significant assets, this model may be unavailable or expensive.

• Advisors may encourage you to keep assets under management instead of using cash for other goals (like paying down debt).

Best for:
Athletes with growing NIL earnings who want professional portfolio management and ongoing planning.

4. Hybrid Models

How it works:
Some advisors use a mix — charging a flat fee for planning, plus commissions for insurance, or a percentage of assets under management along with project-based fees.

Pros:

• Flexibility — you can get different types of support.

• Useful for athletes with multiple needs (investing, insurance, taxes).

Cons:

• Can be hard to track your true total costs.

• Transparency depends on the advisor.

Questions to Ask About Fees

Before hiring any advisor, always ask:

• How do you get paid?

• What’s my total annual cost in dollars, not just percentages?

• Are you compensated differently if I buy certain products?

• Are you a fiduciary 100% of the time?

The Bottom Line

The way a financial advisor gets paid matters just as much as their experience. Whether it’s flat fees, commissions, or percentages of assets, make sure you know exactly what you’re paying for and whether the model creates conflicts of interest.

Smart athletes don’t just sign with the first advisor they meet — they ask questions, compare options, and choose someone whose pay structure aligns with their best interests.

Ready to find transparent, NIL-focused professionals? Start your search with the NIL Financial Advisor Directory today.