How much are independent financial adviser fees?

How much does a financial adviser cost? The answer will depend very much on what kind of help you’re looking for. Independent financial adviser fees vary from around £500 for investment advice, to £5,000 (and more) for some kinds of specialist pension advice.

If you’re seeking general guidance on budgeting and/or debt management, free advice can be obtained from reputable sources such as the Money Advice Service, Citizens Advice Bureau or (if you’re over 50), the government’s Pension Wise service.

How are financial adviser fees charged?

Independent financial advisers charge for their fees in a variety of ways:

  • Hourly charge. Hourly fees can vary from around £75 per hour to £350 with the national average at around £150 per hour.
  • Fixed fee. IFAs who charge in this way usually do so from a set menu (i.e. a fixed fee for setting out a financial plan, another for pension transfers etc).
  • Monthly fee. This can be charged as a fixed rate or a percentage of the sum invested.
  • Percentage charge. This is the most popular charging method among IFAs. The better your investments perform, the higher the earnings for your IFA.
  • Ongoing charge. This can only be charged if your IFA is providing ongoing management of your investments.

Typical financial adviser costs

The table below shows some typical IFA costs - please note, these are guidelines only.

Investment advice
Advice and set up of £11,000 investment ISA £450
Investment strategy for a £50,000 inheritance (for a 50-year-old seeking medium-term growth) £1,500
Retirement planning advice
Advice on an £80 per month pension contribution £500
Advice on a £200 per month pension contribution £580
Advice on transferring a £30,000 pension with guaranteed annuity rates £900
Advice on transferring a £100,000 pension with guaranteed annuity rates £2,000
Advice on defined benefit transfer £1,500
At-retirement advice
Converting a £30,000 pension fund into a lump sum and annuity £825
Full advice on a £100,000 pension pot £2,000
Advice on a £200,000 pension pot (execution only) £1,100
Set up of a drawdown scheme on a £300,000 pension pot £3,500
At retirement advice where the client has a £200,000 Sipp, some DB income, £100,000 of investments and a £250,000 investment property, incorporating estate planning £5,000

Factors affecting independent financial adviser fees

There are a number of factors that can affect the cost of a financial adviser, including:

  • Location. Some areas in the UK are more expensive than others. This means your IFA might have higher office costs than those elsewhere.
  • Qualifications. Some IFAs are more qualified than others. If you’re looking for more specialised advice, you may have to pay a premium for an IFA with higher qualifications.
  • Your Finances. Having your paperwork in good order will give you a clearer understanding of the type of financial advice you need. This will help you keep your IFA charges to a minimum.
  • Who does the work? Some of the work done on your behalf might be performed by a support worker (and signed off by your IFA). This will be charged at a lower rate than work done by your IFA.

Financial adviser fees vs commission

Financial advisers can still be paid a commission for advising on mortgages, equity release and insurance products. These include home, travel and term life insurance.

However, for advice on pensions, investments and retirement income products, advisers cannot be paid a commission and must charge you a fee for their services.

Choosing an independent financial adviser

This can be made much easier using online comparison sites such as: