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How Much Does a Financial Adviser cost?

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If you would like to speak to an Independent Financial Adviser (IFA) then book your free initial consultation.

Here we look at the typical fees involved in seeking financial advice

15th February 2023

If you’re looking to secure your financial future and achieve your financial goals, you may consider using a financial adviser. But, before you take the plunge, you must consider one crucial factor – the cost. In this article, we’ll explore the cost of hiring a financial adviser in the UK and the various factors that influence the fees.

Types of Financial Advisers

The first step to understanding the cost of a financial adviser is to know the different types of financial advisers. In the UK, there are two types of financial advisers – Independent Financial Advisers (IFAs) and Restricted Financial Advisers.

Independent Financial Advisers: IFAs are professionals who offer unbiased financial advice across a range of products and providers. They have access to the whole market and are not tied to any specific product provider.

Restricted Financial Advisers: on the other hand, are professionals who offer advice on a limited range of products and providers. They may be tied to specific product providers, and as a result, their advice may not be as impartial as that of an IFA.

Initial fees for independent advice are cheaper than restricted advice, according to Financial Conduct Authority (FCA) data (Financial Advice Market Review Baseline Report, June 2017), which raises the question why would you pay more for a more limited service?

Other factors

Other factors impacting the cost of advise include:

  1. Expertise and Experience: The level of expertise and experience of the financial adviser can influence the cost. Financial advisers with a wealth of experience and a proven track record typically charge a higher fee.
  2. Services Offered: The cost of a financial adviser also depends on the services offered. Some financial advisers offer a comprehensive range of services, including investment advice, tax planning, estate planning, and retirement planning. Others may offer only basic financial advice.
  3. Location: The location of the financial adviser can also influence the cost. Financial advisers based in London and other major cities typically charge higher fees compared to those based in smaller towns and rural areas.

What is the normal fee for a financial adviser?

The cost of advice can vary greatly depending on the factors mentioned above however, according to the FCA, the average cost is 2.4% of the amount invested for the initial advice and 0.8% per annum for ongoing advice.

What do Select Wealth charge for financial advice?

Our golden rule

We carefully select our clients to ensure that the value we bring to the table far outweighs the cost of our services. We only partner with clients where we are confident we can make a substantial, positive impact.

Clear & transparent

We maintain simplicity in all that we do. Our charges are fully disclosed, ensuring that you are aware of every payment you make. With transparency as our top priority, there are no undisclosed costs and no surprises in the form of additional bills.

No long-term contract

We believe in giving our clients the freedom of choice. That’s why we don’t lock you into lengthy contracts – you can discontinue our services at any moment, without any penalties. The burden of earning your trust and satisfaction lies solely on us. No exit barriers, no termination fees, just flexibility and control in your hands.

We offer a complimentary initial consultation to discuss your financial situation in greater detail and assess if our financial advice would be of benefit to you. There’s no cost to you, and no pressure to continue beyond this meeting. It’s simply a chance for us to understand your needs and see if we’re the right fit for each other.

Following this, we operate a tier-based charging structure, so the higher the amount being invested, the lower the fee is as a percentage.

Below is a fee calculator where you can see what our charges would be (for retirement advice we base the fee on the amount to be invested after any tax-free cash has been taken):

Fee Calculator

Initial Fee: £ (% of investment amount)

Ongoing Fee: £ (% of investment amount)

Do banks offer free financial advice?

No. Prior to 2012, financial advisers were often paid through commission, leading some people to believe that their services were free. However, since commission on investment products was banned in 2012, all financial advisers now charge a fee for their services.

Is it worth paying for a financial adviser?

In general, yes. The results of several studies indicate that individuals who seek financial advice tend to be better off in the long run compared to those who don’t.

If you are considering relatively straightforward cash products such as savings accounts or Cash ISAs, it may not be necessary to pay for financial advice, especially with so much information readily available online.

Consulting with a financial adviser is almost a necessity when it comes to accessing your pension. The decisions you make when accessing your pension will have a lasting impact not only on the rest of your life, but also on any funds you may want to leave behind for your family. With the increasing complexity of this area, seeking the expertise of a financial adviser can be vital. They can provide expert advice and guidance on which provider and investment funds to use and also offer practical tips on maximising your retirement income while minimising tax liabilities.

Related Articles:
How to choose a financial adviser

Is my money safe with a financial adviser?

Financial adviser vs. financial planner – is there a difference?

Is financial advice worth it?

This information is based on our current understanding and is subject to change without notice. This article is for general information only and does not constitute advice.  Whilst information is considered to be true and correct at the date of publication, changes in circumstances, regulation and legislation after the time of publication may impact on the accuracy of the article.

The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

We have local offices in Edinburgh, Falkirk, Glasgow, Livingston and Stirling and provide Financial Advice throughout Scotland. If you would like to speak to an Independent Financial Adviser (IFA) then book your free initial consultation.

Ready to get started? Book your free initial consultation today.


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