Fees

It can sometimes be difficult to understand the fees you would pay should you engage a financial adviser. The fee structure may appear overly convoluted (they often are!).

Below, we outline the fees our clients pay.

There are broadly three types of fees that a client will pay when working with a financial adviser:

Financial adviser fees.
Platform fees.
Investment management fees.

We've written a blog which goes into more detail, and we believe the fees our clients pay are:

Clear.
Competitive.
Not complicated.
Not conflicted.

More details below.

Initial fee (one-off)

Financial Adviser fees.

This covers the following five stages of our retirement planning process:

Stage One: Expenditure analysis.
Stage Two: Creation of a financial plan.
Stage Three: Creation of an investment “engine” (portfolio).
Stage Four: Advice (Suitability Report).
Stage Five: Implementation of recommendations as required.

The initial fee is based on several parameters and ranges from £3,500 to £5,500. The fee is only due once the above five stages are complete and you are happy that you have a robust retirement plan in place.

Platform fees: £0
Investment management fees: £0

Ongoing fees (annually)

Financial adviser fees: As above, these are based on several parameters and typically range from £3,000 to £7,200.
Platform fees: These range from around 0.05% to 0.3% and are often capped.
Investment management fees: These typically range from 0.25% to 0.3%.

We don't:

Charge exit fees.
Charge fees for topping up investments (for example, annual ISA contributions).

Example client One:

Our first example is a couple with a £1.45m investment portfolio that we onboarded in 2024, who paid an initial fee of £5,000 (0.34%) and total ongoing fees (financial adviser, platform, and investment management) of around £12,345 (0.85%) per annum.

Fee comparisons

Below, we compare the total fees our first example client above pays with alternative offerings:

Wealth Manager

We estimate that typical wealth management fees for a portfolio of £1.45m split equally between ISAs and pensions (£725,000 each) would be:

Initial fees (one-off): £36,250 (2.5%) (this assumes the full initial fee of 5% is charged on the ISAs).
Ongoing fees (annually): £25,000 (1.73%). These fees are often quoted as a single fee rather than being broken down into the three categories above.

FCA research

The above wealth manager fees are broadly in line with research from the FCA, which estimated initial fees to be 2.4% (£34,800) and total ongoing fees of 1.9% (£27,550).

Example client Two:

Our second example is a client we are currently onboarding. They have £500,000 cash to invest after receiving an inheritance. Once onboarded, they will pay an initial financial adviser fee of £3,000, and their total ongoing fees will be around £5,150 (1.03%) per annum.

As with Client One, below we estimate the typical fees that may be applicable if you engage with another adviser for retirement planning.

For the wealth manager, we will assume that, as the client has retired and therefore cannot contribute significantly to a pension, 50% of the funds will instead be invested in an investment bond, which carries a similar charging structure. Similarly, the client cannot place all their money in an ISA this tax year, and we will instead assume a general investment account (GIA) is used for the remainder of the money (£250,000), which has a similar charging structure to the ISA.

Of course, our fee structure may not be suitable for everyone seeking retirement planning and advice. For example, we would find it difficult to justify our fees for a client with a £200,000 retirement pot. However, for those with more substantial funds, we have demonstrated above that our fees are highly competitive compared to the industry average, often saving them a five-figure sum each year.

The fees vs value tradeoff

However, fees are just one side of the question. What you are getting for the fees you are paying is arguably an even more important consideration.

In an ideal world, individuals planning for retirement would be able to:

Undertake a life planning exercise to understand the cost of their ideal lifestyle, both now and in the future.
Create and maintain a financial plan designed to deliver their life planning goals, iterating where required.
Create a suitable investment portfolio with sufficient diversification that balances the risk (volatility) required to deliver the financial plan against the risk (volatility) they were happy to accept.
Construct a withdrawal strategy that provides the desired income in retirement, whilst giving sufficient confidence that the investment portfolio will not be exhausted. Withdrawals are adjusted as necessary depending on market conditions.
Ensure lifetime taxation is optimised.
Generate returns in line with broad market indices and not succumb to investor pressures. (e.g., buying high, selling low, etc.).
Pay no fees.

Realistically, this utopia is very unlikely. For example, being objective enough to undertake your own financial planning exercise can be challenging. Indeed, many financial planners hire a financial planner for this very reason (something we also plan to do when we retire). Funds and platforms charge fees. The general public does not widely use cash flow and retirement planning tools, and many investors are subject to biases that impact their returns and, therefore, their retirement plans.

When considering the cost of financial advice, we believe you should view it not through the lens of an ideal implementation, but with real-world pragmatism. There is no escaping the reality that costs, all else being equal, have an impact.

Only you can decide whether the fees the financial adviser will charge are worth paying.

Comparisons are tricky

If you decide that the fees are worth paying, it's important to understand what you are getting for your money. We believe that investment management is commoditised, and those paying for financial advice should demand more for their fees than just the creation of a portfolio. The focus should be on what you are trying to achieve and building a plan of how best to achieve these objectives before discussing investments and portfolios. We estimate that we spend 90% of our time with clients on activities unrelated to investing!

We have created a handy checklist to help you choose your adviser.