My adviser is retiring and I don't want his junior to take over my portfolio. What are my options for advice?

11 October 2021

Got a question?We'll put your question to our panel of helpful advisers

Question by Darren

I’m after something new – my adviser is retiring and I don’t want his junior to take over my portfolio. I don’t think my affairs are particularly challenging but I’m not overly interested in doing things myself and I don’t like the high annual fees advisers charge these days. Where should I turn to or should I embrace the new blood? How may fees work if I don’t go with an adviser?


Answered by Tom Kimche

With relatively simple affairs, you may not receive value from paying a financial adviser a percentage-based fee to provide you with ongoing financial planning advice. The advice you receive may only amount to confirming your investment strategy remains appropriate and simple tax planning such as advising you to contribute to your ISAs each year. In cases like this, many advisers charge the same percentage fee for this advice as they would for far more complicated advice which means the client with straightforward affairs receives poor value.

The average financial adviser in the UK charges 0.8% a year and once you add in custody and fund charges, the average UK investor is paying 1.9% a year, according to FCA research that you can read here: https://www.fca.org.uk/publication/corporate/evaluation-of-the-impact-of-the-rdr-and-famr.pdf

You may instead choose to invest in a cost-effective way with a modern wealth manager. Here you would benefit from professional portfolio management and ongoing monitoring and rebalancing to help achieve your goals; however, you would not be required to pay for financial planning advice that you do not need.

At Netwealth, for example, total fees are between 0.65% per annum and 0.95% per annum which includes everything other than financial planning advice. Advice can be chosen separately, and paid for by the hour, if you decided this was necessary at some stage.

Should you have any questions, or if you would like to discuss further, please let me know.

Best regards,
Tom

Answered by

Tom Kimche

Chartered Financial Planner

I continue to help clients meet a wide range of financial objectives. People come to us to be reassured and to find meaningful solutions to their financial challenges. As an adviser, I like the fact that our modern technology can help bring the topic to life, while also helping us keep fees low.