Pension Information

Pension Advice Costs

How much does Financial Advice cost?

With anything in life the cost of a service should be proportionate the value it brings. This is no different to good financial advice. Good financial advice should lead you to a better financial outcome than if you did not take advice while considering the cost of the advice and it’s clear that the potential benefits that advice can bring can lead you to a much for prosperous future.

How will I be paying for financial advice?

The charges of advice usually vary between advisers and firms; however, the cost of advice is usually addressed in the first meeting with an adviser. There are several different ways advisers charge for their time.

Some advisers may charge a fixed fee; the adviser will perform a specific service (such as setting up an annuity) for a set price in advice. You should ask for written confirmation of what is included in the fee.

Percentage of assets; an adviser who is managing your investment portfolio over a period of time may change a percentage of the portfolio’s total value, rather than a fixed fee.

Hourly rate; some advisers may charge an hourly rate for certain services (£150 per hour is the UK average). Make sure the adviser gives you an estimate of how long the work is likely to take.

Many advisers offer an ongoing advice service, so in addition to an initial advice change there will often be an ongoing advice charge that covers the costs of an adviser analysing your investments regularly, discussing them with you and ensuring you objectives remain in line with your investments.

Why can financial advice seem so expensive?

Financial advice can be argued is expensive and many could question is this justified? Well this depends on your views of what is good value for money. A financial adviser can offer you advice that puts you in a strong financial position, alternately you may not take advice and be worse of financially and you may never achieve that pension fund which will allow you to have a comfortable retirement, so the benefits can clearly be life changing.

On top of this, advisers have to hold responsibility for making these big decisions, often many advisers spend years in the industry building up experience so they can make the best financial decisions, when you pay the fees you are paying for their time and years of experience.

Advisers have to pay the financial conduct authority, advisers have to pay large sums of money to remain active in the industry; these fees can sometimes costs up to tens of thousands of pounds. These fees are collected by the FCA who give pay outs to those who have unfortunately received bad advice, so in effect advisers are paying these fees to ensure the financial security of their clients.

Overall, the value of financial advice is dependent of what your views of good value for money; the options good financial advice can bring could change your financial circumstances and lead you to a life of financial prosperity. It is worth talking to adviser to see how they can help you improve your financial situation, many advisers offer a free consultation and within this meeting, you can usually decide if financial advice is a valuable service to pay for.

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