Financial adviser fees can be fixed, hourly, percentage-based or combined. The charging method affects how the cost changes, but it does not by itself determine whether the service is good value. Consumers need the cash amount, scope and total related charges.
Quick answer
Ask the adviser to separate planning, recommendation, implementation and ongoing service. Convert percentage fees into pounds, identify minimums and tiers, and add platform, product, fund and investment-management charges before comparing firms.
Key points
- A fixed fee gives price certainty only when the scope is clear.
- Hourly charging needs an estimate, rate schedule and approval process for overruns.
- Percentage fees should show the cash amount and explain how it can change.
- Tiered rates may apply marginally to bands or to the whole portfolio; ask which.
- Payment from a product is still a cost borne by the client.
- New pension and investment advice is generally paid through agreed adviser charges rather than provider commission.
- Legacy trail commission and commission in other advice markets require separate treatment.
Fixed financial adviser fees
A fixed fee is a stated price for defined work. Examples include a retirement plan, an investment review or advice on consolidating several pensions.
The advantage is predictability. The client knows the price if the work remains within scope. The risk is that the scope may be narrower than expected or additional work may trigger a new charge.
The agreement should identify the meetings, research, report, implementation and follow-up included. It should also explain whether the fee is payable if the recommendation is to make no change.
A fixed fee is not necessarily unrelated to asset value. A firm may use asset value or complexity to set the fixed quote internally.
Hourly adviser fees
Hourly charging can suit a consultation or work where the time can be estimated. MoneyHelper currently says typical hourly advice fees are often between £100 and £350, although firms can charge outside that range.
Ask for the hourly rate of each person involved. An adviser, paraplanner and administrator may have different rates. The firm should explain which tasks are delegated and who signs off the recommendation.
Request an estimate or cap. The agreement can require the firm to obtain approval before exceeding the estimate. Ask how calls, emails, travel and waiting for provider information are recorded.
Hourly fees can reward efficient narrow work, but a poorly defined project can become expensive. A clear written brief is essential.
Percentage-based adviser fees
A percentage fee is calculated from a stated asset base. It may apply to the amount invested, the amount transferred or assets under ongoing advice.
The disclosure should identify the percentage and cash equivalent. Where an ongoing percentage applies, the cash charge may increase as the fund grows.
Ask which assets are included. Cash held for short-term spending, legacy products and assets not actively reviewed may or may not form part of the charging base.
Percentage fees can make initial payment easier to understand, but the long-term cost should be modelled. A 0.75% annual fee on £400,000 is £3,000 before other charges.
Tiered, minimum and capped fees
A tiered fee uses different rates at different asset levels. The calculation can work in two ways. A marginal structure applies each rate only to the corresponding band. A cliff structure may apply a new rate to the whole amount after a threshold.
For example, 1% on the first £200,000 and 0.5% above it produces £3,000 on £400,000 using marginal bands. A simple 0.75% on the whole amount also produces £3,000, but the outcomes differ at other values.
A minimum sets a floor. A cap limits the maximum cash fee. Both should be shown in the quotation.
Combined fee structures
A firm may combine a fixed planning fee with a percentage implementation fee and a recurring ongoing fee. Another may charge hourly for complex preliminary work and then a fixed recommendation fee.
Combined structures can match the cost to different stages, but they can also make comparison difficult. Request a single summary showing the first-year total and expected later-year total.
Confirm whether one charge is conditional on another. A firm may offer planning only if the client uses its implementation or ongoing service. That commercial model should be clear before work begins.
Planning, recommendation, implementation and ongoing service
Planning or diagnostic work may organise information and identify issues. It might not include a regulated personal recommendation.
Advice involves the analysis and recommendation within the agreed scope.
Implementation involves arranging products, transfers or transactions. It may be included in the advice fee or charged separately.
Ongoing service covers future work. It should not be assumed to start automatically or to be necessary for every client.
Separating these stages helps a consumer decide which parts are needed and prevents the phrase “advice fee” from hiding several distinct charges.
Paying adviser charges through a pension or investment
A provider or platform may facilitate an adviser charge by deducting the agreed amount from the client’s product. The adviser and client should agree the charge and the payment method.
The deduction reduces the product. If investments must be sold to create cash, the timing and transaction consequences should be understood.
Ask whether stopping the adviser service automatically stops product deductions and how long cancellation takes. Check statements to confirm deductions match the agreement.
Do not describe a facilitated charge as provider-paid. It is paid from the client’s assets.
Commission and trail commission
For new investment products bought after 31 December 2012, financial advisers cannot charge provider commission for personal investment advice in the old way; the adviser must explain and agree the advice cost with the client.
Some older products can still contain trail commission. The FCA describes trail commission as an annual percentage paid over the life of certain products. A client may be paying it even when little or no ongoing advice is received.
Commission can still apply to areas including mortgages, insurance, protection, equity release and certain life products. The adviser should disclose the payment and explain why the recommended product is suitable.
Consumers with legacy arrangements should not cancel or switch solely to remove commission without checking penalties, guarantees, tax and replacement costs.
VAT, expenses and additional work
VAT treatment can depend on the nature and structure of the service. A quotation should state whether VAT is included or may be added.
Ask about travel, specialist reports, legal or accounting work, provider charges and work requested after the original scope. The adviser should obtain agreement before carrying out material additional work.
A fixed fee that excludes several foreseeable items can be less certain than it appears. The quotation should be read with the service agreement.
Disclosure and client agreement
The FCA tells adviser firms to disclose the total client-specific adviser charge before the client incurs it, in cash terms and in writing. The client’s agreement to the amount and payment method should be recorded.
For ongoing services, the firm should clearly confirm the service, associated charges and cancellation method. A percentage disclosure should explain that the cash amount may rise with the fund.
Consumers should not sign a blank payment authority or rely on an oral estimate. Ask for a durable written record and keep it with future statements.
Common misunderstandings
“Fixed” does not always mean all-inclusive. “Percentage” does not necessarily mean the adviser manages the assets. “Paid from the pension” does not mean free. “No upfront charge” may indicate commission or a cost embedded elsewhere.
The charging label is therefore only the first question. Scope, cash amount, total package and delivery matter more.
Frequently asked questions
What is the most common adviser fee method?
Firms use fixed, hourly, percentage and combined methods. The appropriate comparison depends on the service.
Can an adviser charge both a fixed fee and a percentage?
Yes. The firm should explain each component and the total first-year and ongoing cost.
What is a minimum adviser fee?
It is the lowest cash amount the firm will charge even if a percentage calculation would be lower.
Are adviser fees tax deductible?
Tax treatment depends on circumstances and the nature of the expense. Consumers should not assume deductibility and may need tax advice.
Can I pay an adviser from my pension?
Some providers can facilitate agreed adviser charges from a pension. This reduces the pension value and should be authorised clearly.
Why am I still paying trail commission?
Some pre-2013 investment arrangements can retain trail commission. Check the product, service and consequences before changing it.
Worked examples of tiered fees
Consider a tiered annual fee of 0.9% on the first £200,000 and 0.5% on the balance. On £500,000, the marginal calculation is £1,800 plus £1,500, giving £3,300. A flat 0.7% fee would be £3,500. The smaller headline rate is not always the smaller fee.
Now consider a 0.6% fee with a £2,000 minimum. On £200,000 the percentage produces £1,200, so the minimum applies and the effective rate is 1%. On £500,000 the percentage produces £3,000.
These examples show why consumers should ask for the exact cash calculation at their own asset value and for an explanation of how it will be recalculated.
Fees when advice recommends no change
Advice is payment for professional analysis, not for the purchase of a product. A firm may reasonably charge even when the recommendation is to retain an existing pension or investment.
The agreement should make this clear. A fee that is only payable when a transaction occurs can create different incentives from a fee for the advice process itself. Consumers can ask how the firm manages that conflict.
A “no change” recommendation should still be supported by reasoning and documentation appropriate to the service.
Refunds, cancellation and incomplete work
The service agreement should explain the client’s cancellation rights, any cooling-off period that applies, and what is payable for work already completed. These details can differ from the cancellation rights of a financial product.
If the client stops part-way through, the firm may charge for work performed under the agreement. A staged quote makes this easier to understand.
If a charge is taken incorrectly or a promised ongoing service is not delivered, the client should raise the matter with the firm. Any refund or redress depends on the contract, regulatory obligations and facts.
How charges appear on statements
Adviser charges may appear as separate entries on platform or pension statements. The wording may identify an initial, ad hoc or ongoing adviser charge.
Clients should reconcile statement deductions with the agreed amount. A percentage charge can vary because the underlying value changes, but the rate and frequency should match the authority.
If the entry is unclear, ask both the provider and adviser for an explanation. Do not assume every annual deduction is an adviser fee; fund and platform charges can be shown differently.
Checking charges before implementation
Before authorising a transaction, compare the final adviser charge with the earlier quotation. Confirm whether the recommended product has changed the amount, whether provider deductions are correctly set up and whether any ongoing authority begins immediately.
Ask for a single schedule showing every expected charge. Keep it with the suitability report and first provider statement so that later deductions can be checked.
Sources and further reading
Important: This guide is for general education only. It does not provide personal financial advice, a quotation or a recommendation to use a particular adviser, firm, product or charging method.
Reviewed by: Financial Adviser Hub Editorial Team. Last reviewed: June 2026.