Question: “I have assets under management of approximately $20 million. I’m paying a ‘platform fee’ of 45 basis points with an additional 18 basis points to two bond managers. This translates to a lot of money per year. The change in circumstances has been sudden and I’m feeling out of my depth. I get that setting the initial structure up might have taken some thought, but the asset allocation hasn’t changed since the initial set up. Where can I go to get some coaching and education on how to handle this situation?”

Answer: As with the costs for many things, whether you’re paying too much hinges on what you’re getting for your money. Indeed, “It depends exactly what they’re charging for. If that includes financial planning and management, that’s a steal. If that’s on top of other fees like asset management fees, it’s a huge ripoff,” says Robert Persichitte, certified financial planner and affiliate professor at Metropolitan State University. (Looking for a new adviser? You can use this free tool to get matched with fiduciary advisers, from our ad partner SmartAsset, as well as sites like CFP Board and NAPFA.)

Michael Palmer, certified financial planner at Ark Royal Wealth Management says the effective fee rate for a sole investment of $20 million seems pricey on the surface. “[But] if you’re getting comprehensive wealth management like yearly tax planning, charitable gifting guidance and estate planning, then that fee is competitive. I looked at some industry benchmarking data and effective fee rate on $20 million across the industry is about 44 basis points,” says Palmer.

Have an issue with your financial adviser or looking for a new one? Email questions or concerns to picks@marketwatch.com.

When you break down what you’re paying, you’re actually well below the 1% industry average that AUM advisers use. “Forty-five basis points is equal to 0.45% of the portfolio. Eighteen basis points equals 0.18% of the portfolio. That equals a total of 0.63% of the portfolio which equals $126,000 in fees. Typically, the higher the portfolio value, the lower the potential fees are for the client,” says Farrel Liger, chartered life underwriter, chartered financial consultant and wealth adviser at Farrel Liger, Inc.

When working with a wealth manager, it’s important for an investor to understand the total fees and how they are broken out. “A family with $20 million in investable assets may pay 0.45% of the assets under management to the financial advisory firm and then pay an additional fee to money managers,” says certified financial planner Jack Gunn at Ullmann Wealth Partners. “While some may think these fees overlap or are duplicative, they are actually very far apart from each other.”

To summarize the different layers, advisory fees cover your wealth manager’s planning and oversight while the additional fees pay the investment managers who run the actual funds and strategies, which are two entirely different services.

Investors have many options when it comes to investing. “They can pick individual stocks or bonds, invest in relatively inexpensive index mutual funds or exchange-traded funds, or hire a professional money manager to manage a portfolio of stocks or bonds actively. The internal expenses charged by these active managers typically range from 0.15% to 1%, but can be higher,” says Gunn.

The key to getting comfortable with these fees is having confidence that the manager is adding value. “A fixed-income money manager charging 0.18% should be able to make up that fee through security selection, execution and portfolio management,” says Gunn.

The fee to the adviser, which is sometimes called a platform fee, is typically based on a percentage of assets under management, but encompasses more than investment management. “The wealth adviser’s primary job is to ensure the clients’ near- and long-term needs and goals are met. When done correctly, the platform fee includes several necessary services for the client such as building customized financial plans, forming investment policies, constructing investment portfolios, financial education, debt management, risk management and more,” says Gunn.

Fortunately, the SEC requires Registered Investment Advisors to submit a Form ADV each year that describes their business, any disciplinary actions and discloses their fee. “You can compare fee schedules from multiple advisers to help frame the fee discussion with your adviser,” says Gunn. (Looking for a new adviser? You can use this free tool to get matched with fiduciary advisers, from our ad partner SmartAsset, as well as sites like CFP Board and NAPFA.)

Have an issue with your financial adviser or looking for a new one? Email questions or concerns to picks@marketwatch.com.

Questions edited for brevity and clarity. By emailing your questions to The Advicer, you agree to have them published anonymously on MarketWatch; they may appear anonymously in other media and platforms.