What charges do you pay for financial advice?

The simple answer is – it depends on what you need and the amount of work your Certified Financial Planner needs to do.

But, there are different fees and charges for different parts of the advice process, as follows:

Initial Advice Fees

With most Independent Financial Advisers, the first initial meeting is free. At that meeting your Financial Adviser will talk to you about what you want to achieve, and your circumstances and will also go through their charges and how the process works. If you want to proceed, you will sign a Client Agreement and the fees will be agreed and documented.

Ongoing Service Fees

We will then agree an additional fee for our ongoing service. This is a fee which is paid annually and covers further meetings at which we review your circumstances and the performance of your investments and make recommendations for any changes which may be required. The cost of our ongoing service fees depends on the number of review meetings you would like to have, this varies from our Bronze Service, which provides you with a review once a year, through to our Gold Service, which provides you with reviews every quarter.

In addition to face to face reviews, as part of our ongoing service package, you can also access details about your investments at any time online, through our website. We provide you with a log in and passwords to get you set up.

Not all firms of Independent Financial Advisers have this kind of online facility. In fact, less than 35% of firms have online facilities like ours.

Product Charges

In addition to our fees for advice and ongoing service, you will also pay fees to your product provider. These fees will vary by provider, but are all disclosed to you before make the decision to invest. Part of our advice process, is to search the whole of the market to find the best product provider for your requirements, which takes into account a comparison of product performance over time and the level of fees charged.

Exit Charges

Some product providers will charge an exit fee if you want to access or move your money around. We DO NOT use product providers with exit charges, so you should be very careful to check that there are no exit charges before you make a decision to invest.

How do you pay our fees?

There are two ways to pay our initial advice fees, either by giving us a cheque, or by the product provider deducting the fee from your initial investment. For example, your £200,000 Pension Transfer would become £195,000 after the deduction of our £5,000 fee.

Ongoing service fees are usually deducted on an ongoing basis from the value of your investments by the product provider and paid to us, although you can pay our ongoing service fees either by cheque in a lump sum, or monthly by direct debit.

So how do our fees compare?

It can be hard to get clear comparisons with other advisers charges because they are often not publicised. But looking at two recent articles in the FT Adviser (the advice industry’s No#1 publication – owned by the Financial Times), research by Bancroft Wealth (13/1/20) suggested that the average initial advice charge was 3%. Some “big name” advice firms were quoted as charging up to 5%.

Our tiered charges mean that our percentage charges change according to the amount of investments under advice, but for comparison our charge for advice on £150,000 would be 3.0%, on £300,000 it would be 2.5% and on £750,000 for example it would be 1.8%, most of which are well below the 3% average market charge.

Tips for checking Adviser Charges

1. Ask whether they work on a fixed fee or a percentage
2. Check their website for information about fees – they should be transparent and published
3. Make sure the fees agreed are documented in writing
4. Make sure you have a clear understanding of when the fees are payable and how they are paid
5. Ask about hidden charges and exit fees

Remember – using a Certified Financial Planner will make you more money in the long run
The latest research shows that using a Certified Financial Planner will make clients on average £40,000.