A guide to fees for independent financial advice

It can be difficult to find a suitable financial advisor, especially one you trust. But whoever you choose, there will always be a cost for the service. Here’s a guide to the way fees are charged for financial advice.

 

There are three main ways:

1. Fees
   Fees are charged either at an hourly rate or at a flat rate for the entire job. This is known as fees only advice.
   
   
2. Commission
   You could pay your advisor indirectly through commission. This is deducted by the product provider from any products you buy.
   
   
3. Fees and commission
   You could pay a combination of fees and commission.

Most independent financial consultancies work on a commission only basis. So if you don’t buy products, they won’t get paid. Everyone can choose to pay by fee rather than commission if they want to.

 

The argument against commission is that it may encourage the sale of financial products rather than sensible, balanced financial advice. And there’s also the danger that the advisor may be tempted to recommend products that pay the highest commission.

 

Download COS (cost of services document)