Money and trust go hand in hand, which is why the question “what does financial advice cost?” can feel awkward to ask. Yet it is one of the most important questions you can raise.
In the UK, advice fees can vary widely. What matters is not just the cost, but what you get for it.
How advisers charge
There are three main ways advisers charge for their services:
1. Percentage-based fees
A percentage of the money you invest, often around 1% a year.
The problem is that the more you have, the more you pay, even if the work involved does not increase.
2. Fixed or flat fees
A set fee for a piece of work, such as creating a retirement plan or reviewing investments.
This is usually more transparent and often better value for larger portfolios.
3. Hourly or time-based fees
Charged for the actual time spent on your case.
Less common for ongoing work, but useful for one-off advice or second opinions.
None of these methods are inherently right or wrong, but the key is alignment — you should feel that your adviser is being paid for their expertise, not your loyalty.
Understanding what you are paying for
Good financial advice is not just about investment returns.
You are paying for:
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Strategic planning, understanding your goals, and building a path to achieve them
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Expertise across pensions, tax, and estate planning
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Behavioural coaching, helping you avoid costly emotional decisions
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Ongoing accountability, reviews, and course corrections over time
If your adviser cannot explain these things clearly, or if they focus more on products than planning, it is worth asking why.
The hidden layers of cost
It is easy to focus only on the adviser’s fee, but that is only one part of the total.
Also check:
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Platform charges, for hosting your investments
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Fund costs, for managing the underlying investments
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Product fees, if you are in a structured or insured arrangement
When you add everything up, the total can be anywhere between 1% and 2% a year.
Over a decade, that can mean hundreds of thousands of pounds in costs, which is why transparency matters more than small percentage differences.
Value versus price
The cheapest advice is not necessarily the best, but the most expensive advice is rarely the best either.
Value comes from outcomes, not appearances.
A good adviser should help you:
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Make confident financial decisions
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Avoid unnecessary tax
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Protect your wealth
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Build a plan that fits your life, not theirs
The goal is clarity, confidence, and control, not just performance figures.
Red flags to watch for
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You are charged without understanding what you are paying for
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The firm receives commissions or uses restricted products without disclosing it
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There is no written breakdown of costs
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Your adviser focuses more on investments than your goals
Transparency is a sign of integrity. If an adviser hesitates when asked about fees, that tells you more than the number itself.
A simple example
Imagine two clients, both investing £1 million.
One pays 1.5% all-in with a restricted firm that manages money in-house.
The other pays a fixed £5,000 a year for planning and uses low-cost, evidence-based funds.
The second client pays less, but also receives advice that is aligned with their interests, not their adviser’s profit targets. Over time, that difference compounds into real money.
Bringing it together
Good financial advice pays for itself many times over.
It helps you avoid costly mistakes, use tax allowances efficiently, and feel confident about your direction.
The key is to measure value by the quality of thinking, not the gloss of presentation.
Before signing anything, ask your adviser to show you exactly how they are paid and what you receive in return.
If they cannot explain it clearly, you already have your answer.
If you would like an independent, transparent review of what you are paying for advice, book a 20-minute second-opinion meeting.
Nic Round is a Chartered Financial Planner and Chartered Wealth Manager, authorised and regulated by the Financial Conduct Authority.