How Do Fiduciaries Get Paid? Advisers, Trustees and Executors

By Kevin Luu, Co-Founder and Chief Learning Officer. Reviewed on 2026-09-30.

A fiduciary gets paid in one of four ways: a percentage of the assets they manage, a flat or retainer fee, an hourly fee, or commissions on products they sell. A fee-only financial adviser is paid only by your family, never by a product provider. Trustees and executors are fiduciaries too, and they are paid either what the will or trust says or, by default, an amount set by state law or approved by a court.

So yes, fiduciaries get paid, and how they are paid shapes what they pay attention to. For a two-income household earning $1 million with RSUs, two 401(k)s and young kids, the pay model decides whether anyone is actually looking at the parts of your money that carry the most risk.

Which fiduciaries a high-income family deals with

“Fiduciary” is a legal duty, not a job title. It means acting in someone else’s best interest, putting their interests ahead of your own. A family with children under 12 usually has, or will have, three kinds:

• Investment adviser. An SEC- or state-registered adviser owes you a fiduciary duty under the Investment Advisers Act. The SEC describes it as a duty of care and a duty of loyalty, including full and fair disclosure of conflicts of interest (SEC Release IA-5248).
• Trustee. The person or company managing a trust for your kids if you die, or for yourselves while you are alive if you have a revocable living trust.
• Executor (personal representative). The person who settles an estate through probate.

A broker is a different case. Since June 30, 2020, broker-dealers must follow Regulation Best Interest, which requires them to act in your best interest when they make a recommendation. The SEC chose not to make that the same as the adviser fiduciary duty (SEC Release 34-86031). Many people hold both licenses, so the same person can act as a fiduciary on one account and as a salesperson on another.

The four ways financial advisers are paid

“Fee-only” means the first three only. “Fee-based” sounds similar but usually means fees plus commissions. That one word is the most common source of confusion, and it is where to start your questions.

Can a fiduciary receive commissions?

Yes, if the conflict is disclosed. A registered adviser that accepts commissions must say so in Item 5.E of its Form ADV Part 2A brochure, explain that it creates an incentive to recommend products based on the pay received, say whether advisory fees are reduced to offset commissions, and state when commissions are its primary pay (SEC Form ADV Part 2 instructions). Item 14 covers economic benefits the firm receives from anyone other than you for advising you, and payments it makes to others for referring people to it.

Disclosure is the legal standard, not proof that the conflict is harmless. If you want to remove the conflict rather than read about it, look for an adviser who states in writing that neither the firm nor anyone at it is paid by product sponsors.

Worked example: the same family under three pay models

Assumptions (illustrative, not a quote from any firm): a married couple in San Jose, one at a large tech company and one physician, $1.1 million of W-2 income, two children ages 4 and 7. They have $5 million in total: $2.4 million in a brokerage account (mostly vested RSUs), $1.8 million across two 401(k)s, and $800,000 in cash and a 529. More RSUs vest every quarter.

1. AUM at an assumed 1.00%, brokerage only. The 401(k)s stay at the employer plan, so the fee is on $2.4 million: $24,000 a year. The adviser is paid nothing for the $1.8 million in 401(k)s, the unvested RSUs, or the 529. If the account grows to $4 million, the fee becomes $40,000 for largely the same work.
2. AUM at an assumed 1.00%, everything rolled in. If the adviser asks to manage all $5 million, the fee is $50,000 a year. That also creates a quiet incentive to discourage using cash to prepay the mortgage or superfund a 529 held elsewhere, because both lower the fee.
3. Flat retainer at an assumed $30,000 a year. The fee does not change when the family moves money between accounts, so advice on the 401(k) mix, RSU sales, the mega backdoor Roth and the 529 carries no pay conflict. The price is visible on an invoice instead of a line on a quarterly statement.

None of these is right for every family. The point of the exercise is to know, in dollars, what you pay and which of your decisions the adviser is paid to care about. For a broader look at price ranges, see how much a wealth manager costs and how registered investment adviser fees work.

How trustees and executors get paid in California and Washington

This is the part young parents rarely look at, and it can be the larger number.

Trustees

If the trust document sets the trustee’s pay, that controls. If it is silent, California gives the trustee “reasonable compensation under the circumstances” (Cal. Probate Code §15681). A person who serves as trustee, guardian, conservator or executor for several unrelated people at once generally must be licensed by the California Professional Fiduciaries Bureau, with exceptions that include attorneys, CPAs, banks and trust companies (Cal. Bus. & Prof. Code §6501 and §6530). Corporate trustees such as trust companies follow their own published fee schedules.

Executors and probate attorneys in California

California sets executor pay by statute: 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9 million, and 0.5% of the next $15 million, with a court-set amount above $25 million (Cal. Probate Code §10800). The estate’s attorney is entitled to the same schedule (§10810). Both are calculated on the appraised value of the property, not the equity, so a mortgage does not reduce the base.

Example: suppose both parents in the family above die while a $2.5 million home with a $1.2 million mortgage and the $2.4 million brokerage account are in their own names, with no living trust. (At the first death, property left to the surviving spouse can generally pass without probate administration under Cal. Probate Code §13500.) The 401(k)s pass by beneficiary designation, and to keep the math simple the example leaves out the cash. The probate base is $4.9 million. The executor’s statutory fee is $4,000 + $3,000 + $16,000 + $39,000 (1% of the $3.9 million above $1 million) = $62,000, and the attorney’s is another $62,000. That is $124,000 before court costs, on an estate with $3.7 million of equity. Assets held in a funded revocable living trust are not part of that base, which is one reason many California families use one. Our estate planning page covers how that fits together.

Washington

Washington has no percentage schedule. If the will sets compensation, that is the executor’s full pay unless they renounce it before serving; otherwise the court awards what it “shall deem just and reasonable,” and it can reduce or deny pay if the executor does a poor job. Attorney fees are set the same way (RCW 11.48.210).

Can a fiduciary be a beneficiary?

Yes, and in families it is common. A spouse is often both trustee and beneficiary of the family trust, and a sibling named as executor is often also an heir. The duty still applies: they must treat every beneficiary fairly, including your children.

A family member who serves can usually take the fee or waive it. An executor’s fee is taxable income to them (IRS Publication 559), while an inheritance generally is not income to the heir (IRC §102). So a sibling who is also an equal heir may come out ahead by waiving the fee. Saying in the will or trust what you expect them to do avoids an awkward conversation later.

Questions to ask before you sign anything

• Are you a fiduciary on every account and at all times, and will you put that in writing?
• Do you or anyone at your firm receive commissions, revenue sharing or referral fees? (Check Items 5 and 14 of the ADV brochure.)
• What is the total I will pay in dollars this year, including fund expenses and custody costs?
• Which of my assets does your fee cover, and do you advise on the ones it does not, such as my 401(k) and unvested RSUs?
• If you are our trustee or executor, how will you be paid, and is there a published fee schedule?

You can look up any registered adviser’s ADV on adviserinfo.sec.gov. Roughly how often you will meet a true fiduciary is covered in what percentage of financial advisors are fiduciaries.

Common mistakes

• Reading “fee-based” as “fee-only.” Fee-based usually allows commissions.
• Comparing percentages instead of dollars. 1% sounds small. On $5 million it is $50,000 a year.
• Ignoring what the fee leaves out. For many tech and biotech families the biggest risk is a concentrated position in employer stock that an AUM-only adviser may not be paid to address. See our equity compensation page.
• Naming a professional trustee without reading the fee schedule, or skipping a living trust and leaving the estate to statutory probate fees.

What to write down for your kids

Your children will one day deal with advisers, trustees and executors themselves, possibly the ones you picked. Write a one-page note: who your fiduciaries are, how each is paid, why you chose that pay model, and what you would want your kids to ask. A trustee who reads that note knows what you intended, and a teenager who reads it learns how to judge an adviser. As Kevin Luu puts it: “Your kids don’t need to inherit your portfolio. They need to inherit your decision-making process.” That note belongs in your FamilyKnowledge® Library, alongside the rest of your family governance documents.

FAQ

Does a court-appointed fiduciary get paid?

Usually yes. Court-appointed guardians, conservators, trustees and executors are paid from the estate or trust, not by the court. In California, executor pay follows the Probate Code §10800 schedule, and other fiduciaries receive reasonable compensation that the court reviews. In Washington, the court sets a just and reasonable amount. A family member can choose to serve without pay.

Is a certified financial planner automatically a fiduciary?

Not in the legal sense. CFP Board’s standards require a CFP® professional to act as a fiduciary whenever they give financial advice, but CFP Board enforces that, not a regulator. The legal duty described above comes from acting as a registered investment adviser on that account. On brokerage accounts, Regulation Best Interest applies instead. Ask which role they are in for each account, and check adviserinfo.sec.gov and BrokerCheck.

Next step

Pull the Form ADV Part 2A for every adviser your family uses, read Items 5 and 14, and write down the total dollars you paid last year. If you want a second opinion on what that buys you, the Tax & Wealth Assessment is a place to start. This is general education, and the right choice depends on your family’s full picture.

Written by

Kevin Luu

Co-Founder and Chief Learning Officer, Bright Advisers

Kevin has advised high-income W-2 tech and biotech families since 2015, and leads the education-first Age Five Family Office from Brea, California.

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