Retirement is a lofty goal -- and a financial advisor, much like a sherpa in the mountains, can help you reach it. Photo: Flickr user Ilker Ender.

If you haven't tapped the services of a financial advisor because you think the cost will be too high, you're only partly correct. Yes, some advisors will charge a significant amount of money, but others' fees are more reasonable. And better still, you may be able to access an advisor for free!

Why you need a financial advisor

Many people don't realize how much they could benefit from a financial advisor. Advisors can be especially useful during a major life change, such as when you get married, get divorced, have a child, buy or sell a home, face an expensive health crisis in your family, inherit money, have to care for elderly parents, become a widow or widower, or lose or change your job.

But financial advisors can be helpful at other times, too, helping you plan to more effectively meet your goals, such as funding a college education, developing an investment strategy, planning for retirement, estate planning, or starting a business.

Remember that while you might be reasonably financially savvy, and may be managing your own investment accounts, an advisor could help put you in an even stronger financial position. You might, for example, learn that your investments are not as diversified as they should be, or that you're not taking advantage of some tax strategies that could save you thousands, or that by taking certain actions now you might save money on your child's college education.

Don't get advice from unqualified sources. Photo: Flickr user Michael Glasgow.

What a financial advisor costs

Costs can vary widely when it comes to financial planners. Some are paid commissions on products they sell you, which can create conflicts of interest -- for example, when one investment is best for you but another option yields a better commission for the advisor.

Other financial advisors charge a flat fee that is a percentage of your assets that they oversee. The fee is typically between 0.5% and 2%. That might seem modest, but if we're talking about a $100,000 portfolio, then you're looking at forking over $500 to $2,000 per year -- every year. If you've done well for yourself and have a $500,000 portfolio, the annual fee might be $2,500 to $10,000. This can seem crazy, but there's a bit of logic in it, as the advisor has an incentive to grow your assets in order to improve his or her share. Still, the advisor might be happy settling for the fee without trying hard to grow your assets, and you can find good advisors who charge a lot less than thousands of dollars per year.

Another option is a fee-only advisor. Some, for example, charge by the hour, with a typical rate between $150 and $300. That can be costly, too. If, for example, you use six hours of an advisor's time at $200 per hour, you'll be charged $1,200. But you might rack up a lot of hours with a good advisor in the first year or two and then require only brief check-ins afterward. Other advisors charge fees by the job; for example, they might quote you a certain price to draw up an estate plan.

Even if an advisor is likely to cost you $1,000 or more per year, he or she might still be well worth it if you're receiving guidance that saves you more than that. The key here is to know exactly how the financial advisor will be compensated and whether there are any potential conflicts of interest.

Cheaper options

Meanwhile, you might have access to some surprisingly inexpensive financial advisors. Many employers, for example, offer workers access to financial advisors (such as for 401(k) planning purposes) either at a discounted rate or for free. Some offer access to financial-planning software. When Charles Schwab surveyed retirement plan participants who took advantage of financial planning services made available by their employers, it found that the workers who followed the advice saved almost twice as much money in their retirement accounts as those who didn't use advisors, diversifying their investments more effectively and enjoying better rates of return.

Your brokerage might also offer financial planning services, either via software on its website or through access to an advisor. This can be a free resource, sometimes depending on how much money you have invested through the brokerage. A 2011 Consumer Reports study found that higher-income customers tended to get more qualified advisors (such as certified financial planners), while some lower-income customers got brokers. The advice received from the many brokerages wasn't generally outstanding, but some was good -- especially considering the price.

Most of us would do well to occasionally consult with a financial advisor. Many offer a free initial consultation, which is another way to get some ideas of what kind of guidance is out there and how helpful it could be for you.

Don't make the mistake of assuming that all financial advice is unnecessary or too expensive.