Definitive Guide: How Financial Advisers Charge

Introduction

Many people believe financial advice is only for the wealthy; but in reality, it can benefit anyone looking to make smarter decisions with their money. Whether you’re planning your retirement, buying a home, or investing for the future a financial adviser can help you make informed choices.

One of the most frequent questions people ask is “How much will it cost?.” Understanding how financial advisers charge is essential to enable you to not only compare costs but also to assess value. Advice fees can vary widely depending on the adviser’s business model, the services you need and how those services are delivered.

This guide breaks down the different ways advisers charge in the UK, helping you understand what you’re paying for, how fees are structured and how to evaluate whether you’re getting good value for money. Whether you are new to financial advice of reviewing your current arrangements, this guide is designed to give you clarity and confidence.

Read on to learn more.

Or, download your copy here: ‘How financial advisers charge‘.

Financial adviser status

Before delving into common financial advice fee structures, it is important to understand the two types of financial advice.

The commonly perceived best standard is an independent financial adviser. This used to be called “whole of market” because an independent adviser can use solutions from the entire market. This can result in more personalised solutions to match you and your needs.

On the other hand, restricted financial advisers are usually limited to one, or very few, product providers. This may improve their efficiency which may translate into lower costs, though this is not guaranteed.

Independent advisers will usually have in place structures, such as centralised investment policies, to help streamline their processes for their core clients. They can still operate outside of this, but by streamlining they enable better efficiencies. They would usually review this sort of policy at least annually.

Financial adviser or planner

If you’re looking for a financial adviser, you might come across some financial planners too – and vice versa!

Generally speaking, a financial adviser will focus on reviewing your existing arrangements, this could be a pension review alongside arranging some income protection for example. They advise on regulated products and look to optimise them for you moving forward. Any discussion of goals or longer-term plans is usually fairly light touch.

A financial planner will usually start with a deep dive into your goals, short and long term. They’ll aim to understand you as a person and may discuss your relationship with money for example.

They’ll produce forecasts that take into account all of your finances and review if you’re on track for your personal goals. That could be a house move, early retirement or a once in a lifetime trip. Balancing these with enjoying life now is also usually a focus.

Once you’ve got a plan in place a financial planner will then also provide advice on optimising your finances which will all be linked back to your personal objectives.

Financial advisers and planners can both be independent or restricted. The more involved process that a financial planner offers may result in additional costs, though in terms of value you may feel it is well worth it.

How do you pay

When it comes to paying for financial advice there are generally two main options:

Via your products

This is the most common method and involves signing paperwork to confirm you are happy for your adviser to deduct fees from your pension, for example.

In the case of percentage based ongoing advice fees the provider would typically calculate the fee on a daily basis, total it up and deduct it at the end of the month. For percentage based initial advice fees they would calculate a percentage of the value of the pot or new top up and deduct it.

For fixed fee advice, the provider would deduct the agreed fixed fee at the outset, or in the case of ongoing advice at the end of the month and deduct it.

By standing order

You may be able to agree to pay your advice fee by standing order direct to the financial advice company. For fixed-fee advice business this is very straightforward to set up.

For percentage-based fees this may be more complicated. As the fee is usually calculated each day, they may suggest a regular monthly fee based on current values that will either need to be topped up or refunded depending on how the market moves throughout the year. If going down this route, make sure you are clear on the process.

Percentage based fees

These are the most popular and the financial adviser will charge you a percentage of your assets under management (AUM), typically ranging from 0.50% to 1.00%. It is commonly seen as having “skin in the game,” where the adviser will be remunerated more for good investment performance and less for poor performance.

Pros:

• Alignment of interests for clients who are looking to grow their wealth.
• Potentially cheaper for those starting out with lower assets levels.

Cons:

• Potential conflicts of interest where advisers may be incentivised to encourage additional investment or discourage potential portfolio withdrawals.
• Cross subsidies arise where wealthier clients may receive the same service as clients with lower value assets despite paying considerably more.
• Markets generally rise faster than inflation resulting in fees rising faster than inflation.
• Your service may include parts which you do not need.
• For advisers, they have limited impact on market returns but will suffer from reduced revenue during market downturns.

Some advice firms will apply both a minimum fee and a maximum fee. This means your effective percentage fee could be higher or lower.

Typical ongoing fees

Ongoing percentage-based advice fees are most commonly in the range of 0.91% to 1.00%. [1]

Fixed fee structures

Fixed fee models charge a set amount for specific services. Generally, after an adviser has spoken to you, they will provide a customised quote for you and your needs.

Pros:

• Fees are transparent and clear which means you will know exactly what you are paying.
• Simply having a large portfolio value doesn’t automatically result in a higher fee.
• You may be able to add or remove certain services as your needs evolve – e.g. additional regular meetings.

Cons:

• For those with lower asset levels they can be more expensive as there is no cross-subsidy from higher AUM clients.
• If your needs increase additional services may result in additional fees.

Due to their nature, you may find you have more conversations with your adviser about fees. This could be because unforeseen complexities arise creating an additional workload for the adviser, thereby increasing fees. Whilst these conversations may feel tricky it does generate a more open discussion about fees, ensuring you always know what you’re paying and why.

Hybrid models

Hybrid models are found as well. An adviser may charge a fixed initial fee and then charge a percentage of assets as the ongoing fee.

Hourly rate models

Whilst less common, some advisers will charge based on an hourly rate. This can suit those needing one-off or occasional advice.

Whilst they are transparent and easy to understand there is always the risk that the total cost estimate increases if the scope of work changes. This unpredictability can be a drawback though you may find an agreed cap is put in place with work stopping if it appears the cap will be exceeded.

Most firms will also have an hourly rate for any ad-hoc services that don’t fit elsewhere.

Factors Influencing Adviser Fees

As with all businesses there is, at the core of it, a simple equation of costs plus profit when it comes to choosing their fee levels. However, those costs are influenced by some common factors that it’s important to understand.

Regulatory and compliance costs

Financial advice is a highly regulated service and that regulation is constantly evolving. In recent years that has, generally speaking, resulted in increasing time burdens on firms to comply with such regulation. Those increased operational costs ultimately pass on to clients via their fee structures. For example, the average ongoing percentage fee has increased by 0.09% since 2023 [1]

Complexity of your needs

Fees often reflect the complexity of the advice being provided, particularly fixed fee structures. For example:

• A simple ISA review may incur a lower fee.
• A retirement plan involving multiple pensions, trusts or tax considerations may command a higher fee.

Adviser business model

Different firms adopt different pricing strategies. Financial planners may offer more in-depth plans to accompany their advice which could increase costs. Independent advisers may offer more bespoke services that are more expensive than restricted advisers.

Technology use

Remote firms may offer lower fees due to decreased travel time or office rental costs versus a more traditional financial adviser who may operate out of an office and also drive to your home to meet you.

Competition

As with all products and services, good competition can help keep costs down for you, the client. Taking time to research several options prior to engaging a financial planner is sensible to make sure you find the best service for you.

Average fees

The mean average ongoing advice fee is 0.77%, with the most common ongoing advice fee being 1.00%.[2] In comparison, Wholesome Financial Planning’s average ongoing advice fee as of 21^st July 2025 is, when calculated as a percentage, 0.38%.

Initial advice fees

When you first engage with an adviser or planner there will be an initial fee discussed and agreed. Usually, you will be offered an initial meeting for free in order for you to establish if you get on well with the adviser. A good working relationship is vital to ensure you receive advice that you are able to understand and that works for you.

The free initial meeting is generally a discovery meeting of some kind; you shouldn’t expect tailored financial advice at this meeting. To provide advice there are requirements such as fact-finding and risk-profiling that will come later.

The initial advice fee will cover various items such as a review of your existing financial arrangements, building of a financial plan where offered, and implementation of any recommended products.

Some advisers, particularly fixed fee advisers, will separate their initial fee into two parts: one for the initial planning and advice and the second for the implementation of any recommendations. Given the implementation is typically an administrative exercise this is usually the smaller part.

All advisers should provide you with a written client agreement detailing their services as well as a fee agreement covering the costs.

Ongoing advice fees

For most the initial advice isn’t a one-off exercise. Regularly reviewing and adapting your products and plan to your changing circumstances is important.

An ongoing service is a refresh of the initial advice process each year. As the onboarding process has been completed and you will likely be in a more streamlined overall position the costs are lower than the initial fees.

Ongoing services typically include:

• Annual suitability reviews of your products.
• Annual meeting with your financial adviser or planner.
• Additional meetings, with or without formal suitability reviews.
• Performance reporting of your products.
• Cash flow forecast updates for your changing circumstances.
• Progress or review pack with key information.
• General access to your adviser for queries or life events.

With 76% of clients in a recent survey by NextWealth believing they receive good value for money for their ongoing service there is work to be done [1].

Be sure to ask appropriate questions of your potential new adviser or planner. You may also want to ask for demo copies of any annual documentation you might expect to receive. Such copies will give you a feel for how they communicate with you. If it’s small fonts and tables squashed onto pages, perhaps you want to consider an alternative.

Ad-hoc fees

It’s a rare occurrence that an ongoing advice service will cover every eventuality for your needs, which means there may be additional costs to consider. These can vary depending on what they cover, but by means of example the following scenarios may attract additional fees:

• New lump sum contributions
• Moving to pension drawdown
• Purchasing an annuity
• Inheritance tax calculations and planning
• Complex investments – e.g. VCTs

These will attract different fees at different firms. A new ISA contribution may attract a fixed rate to cover the additional analysis and administration. Inheritance tax calculations and planning can be wide and varied and so might attract an agreed hourly rate.

Or, for example, moving to drawdown might increase your annual fee at a fixed fee firm to reflect additional tax calculations. At a percentage-based fee, they may charge a percentage on the amount moving to drawdown and then continue to apply their regular percentage fee.

Watch out

If an advice firm covers everything within their ongoing advice fee you may want to consider that you could be paying for a number of services which you do not in fact need all the time.

Value for money

Whilst the fee and its exact mechanics are important, it is more important to ensure you are receiving value for money. In a recent survey by NextWealth the top factors clients valued were:

• Trust in the adviser
• Quality of financial planning
• Investment performance

Alongside those, regular communication and good use of technology were highlighted.

A regular financial planning or advice service will be more expensive than your product provider or fund manager fees in most cases. This should be expected and makes sense – your adviser or planner has a more varied role that provides a personalised service to you. A platform provider on the other hand is, at its core, a technology stack.

Whether or not you feel you receive value for money is a personal thing. But it’s worth considering how confident you feel in your adviser and your financial plans alongside how the fees stack up to the averages and alternatives.

Fixed fees vs percentage-based fees

The report also highlighted that clients paying fixed fees were more likely to say they represented good value and 19% more like than those paying percentage-based fees to say they receive excellent value for money.

Comparing advice fees

Comparing advice fees isn’t always a simple comparison. Comparing pound for pound fees without looking at the big picture would lead to an unfair comparison.

To ensure a fair comparison, here are a few things to consider:

• What are the costs? Both initial and ongoing?
• What do those include?
• Will you receive financial planning or just advice?
• Can you contact your adviser throughout?
• What ad-hoc fees might be charged and in what circumstances? Are you likely to need them?
• Is the adviser independent or restricted?
• What are the adviser’s qualifications and experience?
• Are there reviews of the business, and the adviser?

And after all of that, don’t forget to trust your gut. Do you feel comfortable with the adviser? Do they listen to you and explain things in a way that you understand?

Choosing an adviser or planner

Prior to working with an adviser, it’s important to look at a few options. When doing this the following checklist could provide a uniform way to compare them.

• Are they independent or restricted?
• Do the offer financial planning or just advice?
• What are their initial fees?
• What are their ongoing fees?
• Are ad-hoc fees clearly explained?
• How does the initial advice / planning process work?
• What is included in the ongoing advice / planning service?
• Can they provide sample documentation?
• What are their qualifications and experience?
• Are there client reviews or testimonials for the adviser and business?
• Do you feel comfortable with them?

About Wholesome Financial Planning

Wholesome Financial Planning is an evidence-based and fixed fee independent financial planning and advice firm situated in Reading, Berkshire. As an independent financial planning business, we can help with a range of financial services, including financial advice, pension advice, retirement planning, inheritance tax planning and investment advice.

Our financial plans are based on responsible investment solutions that consider future generations and sustainability. They are delivered entirely remotely in line with our values which keeps costs down for you too.

If you’d like to learn more about our services schedule a free call with Wholesome Financial Planning today.

References

[1] 2025.07.21 https://www.ftadviser.com/advice-fees/2025/3/25/average-ongoing-advice-fees-rise-by-9-bps/

[2] The Lang Cat, (2025). State of the Advice Nation.

The value of investments can fall as well as rise, you may not get back all of your original investment. Your capital may be at risk.

A pension is a long term investment and your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

Tax treatment is dependant on individual circumstances and may be subject to change in the future.

Tax planning, including Inheritance Tax Planning, and Trusts are not regulated by the Financial Conduct Authority.

Approved by In Partnership FRN 192638 August 2025.