Wealth Management Fees in Canada: What You'll Actually Pay
Understand the cost. Evaluate the value. Make an informed decision.
Why Fees Matter More Than You Think
The fee you pay your wealth manager is one of the most consequential numbers in your financial life - not because it is large in any given year, but because of its compounding effect over decades. A difference of 0.50% per year in fees on a $1 million portfolio translates to approximately $150,000 in lost wealth over 20 years, assuming a 6% annual return. Understanding exactly what you are paying, what it includes, and whether it represents genuine value is not optional - it is essential.
This guide covers every fee structure used by wealth managers and financial advisors in Canada, the typical ranges for each, what is and is not included, and how to evaluate whether the fee you are paying is appropriate for the services you receive.
1. AUM-Based Advisory Fee (Most Common)
The most common fee structure for wealth management in Canada is a percentage of assets under management (AUM), charged annually. This fee covers investment management, financial planning, tax planning coordination, and ongoing advice - all bundled into a single, transparent annual charge.
| Portfolio Size | Typical AUM Fee Range |
|---|---|
| $250,000 - $499,999 | 1.25% - 1.50% |
| $500,000 - $999,999 | 1.00% - 1.25% |
| $1,000,000 - $2,499,999 | 0.85% - 1.00% |
| $2,500,000 - $4,999,999 | 0.75% - 0.90% |
| $5,000,000+ | 0.50% - 0.75% (negotiable) |
The AUM fee is typically charged quarterly and is disclosed on your account statements. It is important to confirm whether this fee is all-in - covering all investment vehicle costs - or whether it is charged in addition to the management expense ratios (MERs) of the funds held in your portfolio.
2. Mutual Fund MER (Often Misunderstood)
If your portfolio is invested in mutual funds, you are paying a management expense ratio (MER) - an annual fee embedded within the fund itself, deducted before the fund's returns are reported to you. Because MERs are not charged as a separate line item, many investors do not realize they are paying them.
| Fund Type | Typical MER Range |
|---|---|
| Canadian equity mutual funds | 1.50% - 2.50% |
| Balanced mutual funds | 1.75% - 2.25% |
| Fixed income mutual funds | 1.00% - 1.75% |
| ETFs (exchange-traded funds) | 0.10% - 0.50% |
| Segregated funds | 2.00% - 3.50% |
If your advisor charges an AUM fee and also holds mutual funds in your portfolio, you may be paying a combined fee of 1.50% to 2.50% per year. Always ask your advisor for the total cost of investing, including all embedded fund costs. For a comparison of mutual funds and ETFs, see our investment solutions guides.
3. Flat Fee / Retainer
Some wealth managers charge a flat annual retainer fee for their services, regardless of portfolio size. Flat fees for comprehensive financial planning in Canada typically range from $3,000 to $10,000 per year, depending on the complexity of the client's situation.
4. Hourly Fee
Hourly fees are charged for specific, defined engagements - such as a one-time retirement income plan or a tax review. Hourly rates in Canada typically range from $150 to $400 per hour.
5. Commission-Based (Declining)
Since the Canadian Securities Administrators (CSA) banned deferred sales charges (DSCs) in June 2022, commission-based compensation has become less common in the investment management space, though it remains prevalent in insurance. If your advisor is compensated through commissions, ask them to disclose the commissions they receive on any product they recommend.
What Should Be Included in Your Wealth Management Fee?
A comprehensive wealth management fee - typically in the 0.75% to 1.25% AUM range - should include all of the following:
| Service | Included in a Comprehensive Fee? |
|---|---|
| Investment portfolio management and rebalancing | Yes |
| Written financial plan | Yes |
| Annual financial plan review and update | Yes |
| Tax planning coordination | Yes |
| Retirement income planning | Yes |
| Estate planning coordination | Yes |
| Insurance needs review | Yes |
| Registered account optimization (RRSP, TFSA, RESP) | Yes |
| Access to your advisor for questions throughout the year | Yes |
| Quarterly or semi-annual portfolio reporting | Yes |
Are Wealth Management Fees Tax-Deductible in Canada?
Investment management fees paid on non-registered accounts are not tax-deductible in Canada, following the 2024 Federal Budget changes. However, for incorporated professionals and business owners, investment management fees paid by a corporation on corporate investment accounts may be deductible as a business expense. This is an area where corporate tax planning and wealth management intersect - and where working with an advisor who understands both is particularly valuable.
How to Evaluate Whether Your Fee Represents Good Value
Calculate Your Total Cost of Investing
Add your advisory fee to the weighted average MER of the funds in your portfolio. This is your true all-in cost of investing.
Identify All Services You Receive
Does your fee include a written financial plan, annual reviews, tax planning coordination, and estate planning coordination?
Assess the Quality of Advice
Has your advisor proactively identified tax savings opportunities? Have they reviewed your insurance coverage and estate plan?
Compare Alternatives
A robo-advisor charges 0.25% to 0.50% for automated portfolio management with no planning services. For clients with complex situations, the tax savings alone from a well-executed strategy typically far exceed the advisory fee.
Want to Understand Exactly What You Are Paying?
Book a complimentary consultation with an SG Wealth advisor today.
We will provide a clear, written breakdown of all fees so you can make an informed decision about your wealth management relationship.