I was wondering on getting independent financial but have been quoted 3500 on a p/f of 200 thousand plus 0.7 % per year after. Is this the going rate?
04 February 2022
Question by Susan
I was wondering on getting independent financial advice but have been quoted 3500 on a p/f of 200 thousand plus 0.7 % per year after. Is this the going rate?
Answered by Simon Warne
Financial advice fees vary from firm to firm, depending on the services offered and even the location of the firm itself. Most financial advisers charge on a percentage basis, and typically initial fees range from 1% - 3% of the assets being advised on. In your case, the fee of £3,500 equates to 1.75%, so this would suggest it is within the going rate. Some firms charge a fixed fee instead of a percentage, and often advisers display their fees on their websites for you to compare.
In terms of ongoing fees, these typically range from 0.5% - 1.00% but can vary depending on the ongoing services being offered. These can differ from firm to firm, so it is very important to understand what is being provided. For instance, one company may provide annual reviews and charge 0.50% but another may meet clients twice a year, and charge 1.00%. You don't have to sign up for an ongoing service if you don't want to, but this is nearly always recommended to ensure a close eye is kept on your finances going forward.
When deciding whether to engage a financial adviser, cost is an important factor to consider but there are other points to take into account. For example, the services they are providing; does what they do meet your needs? their reputation; are they trustworthy / are they recommended? and ultimately your rapport towards the adviser themselves; did you feel comfortable talking to them about your finances? These are all important when deciding on which firm is right for you.
Although this was written in 2019, the following article from Which summarises things quite nicely about the benefits and general points to consider when thinking about seeking financial advice:
I hope this helps!
Since graduating from University in 2015, my whole working life has been in financial services. I started out as a paraplanner, providing support to other financial advisers up and down the country whilst gaining my qualifications. However, I always knew that my personality was better suited to being in front of clients and in 2018 I made the transition to Financial Planner.