Financial advice costs explained

When considering advice, you may be concerned about the cost. Money matters, but let's not forget that advice is more than just pounds and pence.

Here we discuss different charges you may need to consider prior to taking financial advice.

Charge structures and types

The amount a financial adviser will charge will vary dependent on the work you want them to do. The charges vary based on the complexity of the service, ranging from basic investment advice to specialized pension consultations. Here’s a few different ways you may be charged:

  • Percentage of your investment value
    Ongoing advice, is where your adviser looks after your assets and keeps an eye on them regularly, making any changes that may be needed along the way to help you achieve your financial goals. This is done most commonly by taking a percentage of the value of your assets so as the value of your investment portfolio changes so does the amount of advice charge paid.
  • Hourly charges
    For some advice, your adviser will charge you an hourly rate dependent on how long it takes them to do a piece of work for you. Whether it be fund research, finding lost pensions, speaking to providers, all of this takes time. They’ll always let you know if this is what they’re doing and will give you a rough idea as to how much this may cost.
  • Fixed charges
    This is where you and your adviser will agree upfront an amount for a specific piece of work to be done. This might be the setting up of a product, or generally any ‘one time’ sort of work.
  • Platform fees
    Platform fees are a charge by the online services that the financial adviser uses to build and manage your investment portfolio, these are usually taken directly from the fund itself. These aren’t necessarily a charge that is obvious and is usually taken directly from the fund itself.

A few other questions

Can I get free financial advice?

Sadly, no advice is free. Some firms will offer a free consultation to understand your needs and advice requirements before proceeding to paid financial advice. It provides you with the opportunity to consider whether the adviser is the right person for you, as it's likely you'll be in contact with them for potentially the rest of your life. You can, however, get free guidance on next steps by Pension Wise.

Can I get help with the cost of advice?

The short answer is sometimes. Some employers will offer access to financial advice as part of their benefit packages. In some cases, some providers allow you to withdraw up to £500 from your pension to pay for retirement advice, and this can be done for up to three tax years.

We hope you feel equipped with enough knowledge to continue your journey into researching financial advice. If you’re still scratching your head, we have plenty of other articles that may help you find that answer. Or if your journey is coming to an end and you’re ready to find that person, why not start here and book in a free, no obligation call to see if Aviva Financial Advice can help.

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