Here are the going rates. A UK financial adviser typically charges 1–3% of your money upfront to take you on — the average is around 1.8% — then about 0.8% a year, every year, for ongoing advice. Add the fund charges and platform fees that come with the package and the all-in cost of being an advised client averages 1.8% a year.
On a £200,000 pension, that’s roughly £3,600 to walk in the door, then £3,600 a year for as long as you stay.
Those figures aren’t mine — they’re from this year’s industry benchmarking of 545 UK advice firms. The industry knows exactly what it charges. It just prefers percentages to pounds, because percentages sound small.
The three layers of charges
An advised setup carries three separate costs, and the quote usually leads with only one of them.
The advice fee is the adviser’s own charge — the 0.8% a year. The product and platform charge is the cost of the machinery your money sits in, often another 0.3–0.4%. The fund charges are what the investments themselves cost, and advised portfolios tend to use funds costing far more than a simple tracker. Stack the three and you arrive at that 1.8% a year all-in.
Some advisers charge differently — £150 to £300 an hour, or a fixed £1,000 to £5,000 for a one-off plan. Hold that thought, because it matters later.
The number nobody quotes
Fees are quoted as a percentage of your money. But your money isn’t what the fee comes out of — your growth is.
The market’s long-run average is around 7% a year. An all-in cost of 1.8% is a quarter of that. Quoted as a sliver of your pot, it’s really a quarter of your growth — taken every year, up years and down.
And it compounds against you. Take £200,000, growing at 7% before costs, over 25 years. As an advised client netting 5.2%, you end with about £710,000. Running it yourself at 0.25% all-in — a tracker on a flat-fee platform — you end with about £1,024,000. Same money, same market, £313,000 apart. I’ve run the year-by-year version of this maths here if you want to see where the difference hides.
Assumptions on the table: 7% is the long-run average, not a promise, and the gap scales with whatever the market actually does. The costs, though, are the one part of investing that’s guaranteed.
When paying it makes sense
Some situations genuinely earn an adviser their fee: a defined-benefit pension transfer, serious inheritance-tax planning, a divorce settlement, a business sale. Complexity is what advice is for — and for a moment like that, a fixed £1,000–£5,000 plan or an hourly rate buys you expertise without signing over a slice of your wealth forever.
What rarely earns its keep is the ongoing percentage for keeping ordinary money in ordinary funds. That’s the arrangement the industry’s own £47,000 value claim tries to defend — and the version I paid for myself, until I asked what the fee actually bought.
If you decide to stop paying
You’re not locked in, and it’s less admin than you think — here’s exactly how to leave, from someone who’s done it.
Advice is worth paying for by the hour or by the job. It’s rarely worth paying for by the year, forever, as a percentage of everything you own.
This is what I write about every week — managing your own money without paying someone 1–2% a year to do it worse. The letter is free.
I am not a financial adviser. Nothing here is personal financial advice. This is my own experience and opinion, shared for information and education. Investing involves risk — the value of investments can fall as well as rise, and you may get back less than you put in. Please do your own research before acting.