Paying for regulated financial advice can save you time and money in the long run and help you meet your needs and goals. Find out how much financial advisers usually charge so you can understand what you’re paying for and compare costs.
How much will I pay for financial advice?
Financial advisers can decide how much to charge, as long as their fees are clear and fair.
The total amount you’ll pay for financial advice normally depends on the type of advice you need – and how complex your needs are.
Typical hourly fees for financial advice are often between £100 to £350 an hour, but you might pay a fixed or percentage fee for advice about certain financial products.
| Type of advice | Typical advice cost |
|---|---|
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1-3% of the value for initial advice. 0.5%-1% for ongoing advice. For example, if you were investing £100,000, this means you'd pay between £1,000 to £3,000 initially and £500 to £1,000 for ongoing advice. |
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No up-front cost if the adviser receives commission, £300 to £1,000 or 0.35% to 1% of the mortgage amount. For example, if your mortgage was £200,000, this means you'd pay between £700 to £2,000. |
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£500-£2,000. |
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No up-front cost as the adviser usually receives commission. |
What affects the cost of financial advice?
How much an adviser charges can depend on many factors, including:
- Where they’re based – advisers might have higher costs if they’re based in more expensive areas of the UK.
- How the advice is given – advisers might have lower costs if they only offer advice online or over the phone.
- Who does the work – advisers might have lower costs if they use support staff to do some of the work before being signed off by a qualified adviser.
- How complex your situation is – advisers might charge more if they need to sort through paperwork or other information before they can give you advice.
- How investments are managed – advisers will usually charge more if they’re actively managing your investments for you, rather than using ready-made funds or other types of investments that are managed elsewhere.
For more information about financial advice, see our guide Do I need a financial adviser?
How do I pay for financial advice?
There are three main ways to pay for financial advice:
- You pay advice fees to the adviser.
- Advice fees are paid by the provider of the product you were sold, called commission.
- Advice fees are added to the cost of the product.
The adviser must explain how advice fees will be paid.
How financial adviser fees work
If you pay fees for financial advice, advisers will usually either charge:
- a fixed, one-off fee
- an hourly rate, or
- a fee based on a percentage of the money you’re investing.
Some advisers might also use a combination of these fees. For example, a one-off fee for advising what’s best for you and a percentage fee if you ask them to manage your money on an ongoing basis.
How commission works
The cost of your advice might be covered for you if your adviser:
- sets up certain financial products for you, including mortgages and insurance
- is paid commission from the provider for selling the product.
Financial advisers cannot get commission for advice about pensions or investments – they must charge you a fee.
How adding advice fees to the product works
If you don’t pay for advice directly or through commission, it can be part of the product’s cost.
For example, the cost of getting mortgage advice might be added to your monthly repayments.
You must be told how much the advice costs before you commit
Many financial advisers offer a free initial meeting to:
- understand your situation
- work out the advice you might need
- explain how much the advice will cost
- answer any questions you might have.
You must be told how much the advice will cost before you sign up and if you’re paying for:
- one-off advice to meet a certain need
- ongoing advice and management, including regular reviews and updates to your plan.
Can I get help paying for financial advice?
You usually need to pay for financial advice yourself. But, if you have an employer or belong to a union or similar organisation, it’s worth asking if they offer access to a financial adviser for free or at a reduced cost.
The pensions advice allowance
If you want retirement advice and have a defined contribution pension, check if your pension provider allows you to use the pensions advice allowance.
The pensions advice allowance lets you take up to £500 tax-free from your pension to pay for retirement advice. You can do this once per tax year (6 April to 5 April), up to three times in total.
You can find out your pension type using our tool or ask your provider.
How do I compare financial adviser fees?
Many financial advisers do not publish their fees online, so it’s best to get a few quotes to compare costs and service.
Find out how in our guide Choosing a financial adviser.
If you’re considering paying for ongoing advice, always compare the total cost each year rather than just the initial fee. Even small differences in ongoing charges can add up significantly.
Check if the adviser can search the whole market
Always check if your adviser has searched the entire market to recommend any product, or if they’re restricted to only using a certain number of providers.
Getting a product recommendation from the whole-of-market might mean you get lower management charges and higher returns, helping you grow your money faster.
Check the costs of products and services you take out
Whichever way you choose to pay for advice, it’s important to look at the performance of a product and how much annual charges or fees will be.
These can have a big impact on how much money you’ll get from your investment or pension in the long term.
If you use a mortgage or insurance broker, always compare any advice fee with:
- how much interest you’ll pay in total
- how long you’ll be locked into the product.
This can help you compare the cost of financial advice with your financial goals.
