What financial advice costs — and how to compare fees

01The three charging models

Since 2013, UK advisers can't take sales commission on investments and pensions — you pay fees directly (commission still exists for some mortgage and protection business, which the adviser must disclose).

02Percentages hide the pounds

"1% initial and 0.75% ongoing" sounds tiny. On a £300,000 pension it's £3,000 up front and roughly £2,250 every year — rising as the pot grows. Over a decade that ongoing charge alone can exceed £25,000. None of which means it's bad value: a good planner can be worth multiples of that around big decisions. It means you should always do the conversion before signing.

03What to ask before you sign

1. "What will my first year cost, in pounds?" Insist on a cash figure covering initial and ongoing charges.
2. "What's included in ongoing service — and what triggers extra fees?" Reviews, rebalancing, ad-hoc questions, tax-year-end planning.
3. "What are the total costs including platform and fund charges?" Adviser fees sit on top of product costs; ask for the all-in figure (advisers must disclose aggregated costs).
4. "Can I take the initial advice without committing to ongoing service?" The answer tells you a lot about the business model.
5. "How do I cancel, and what happens to my money if I do?"

04Is ongoing advice worth it?

It depends on what you're getting. Ongoing percentage fees are good value when your situation genuinely changes year to year — drawing retirement income, managing tax across multiple wrappers, family changes. They're poor value if the "annual review" is a templated letter while your money sits in an unchanged portfolio. The honest test: list what the adviser actually did for you in the last twelve months, price it at an hourly rate, and compare. The wider version of that question has its own guide: do I need a financial adviser?

05Cheaper and free alternatives

• Free guidance: MoneyHelper (general), Pension Wise (pension options at 50+), Citizens Advice (debt).
• One-off advice: a growing number of firms sell fixed-fee, single-project advice without ongoing commitment.
• Education: for straightforward situations, understanding the system — what this site is for — may be all you need before executing yourself.

06Common questions