Can you negotiate financial adviser fees? 

Financial advice can be invaluable whether you are planning a well-deserved retirement, starting your investing journey, or buying your first home. 

A financial adviser can help you put in place the plans you need to achieve your goals and steer you clear of any pitfalls.

They can also be priceless when you are going through difficult life events and your financial circumstances change - for example, your partner dies or you go through a divorce.

Here we look at how much you’ll need to pay for advice and whether you can negotiate.

What does a financial adviser do? 

If you’re not sure what to do with your money to ensure you reach your goals, a financial adviser can help.

A qualified financial adviser can help you with everything from home buying and investing to pension saving and retirement finances. They can also help with estate planning, including inheritance tax.  

All financial advisers, whether they are restricted or independent, must be qualified and regulated by the Financial Conduct Authority (FCA).

How much does a financial adviser cost? 

Financial adviser costs can vary depending on a range of factors, such as: 

• What you need help with: Some people may need one-off support, such as a pension review, while others may want an adviser to monitor and optimise their investments, which takes more time. If you have a complex issue that is time-consuming to address, you may face higher costs.  

• Whether they are restricted or independent: If an adviser is restricted, they may be limited in terms of the number of providers they can access, the products they can offer or both. Independent advisers can recommend retail investment products and pension products from the whole market. 

• Location and delivery of advice: If an adviser is based in a more expensive area, it may cost more to seek advice. Getting advice online or over the phone can be cheaper. 

• The qualifications of your adviser: Some advisers may have more specialist experience and qualifications, meaning they may charge higher fees.   

Financial advisers charge in one of four ways – and can use more than one charging method if appropriate.  

• Hourly rate: This is, on average, £150 an hour and may be useful for quick, one-off jobs. 

• A set fee: How much you’re charged depends on what you may need help with, and it could run from a few hundred pounds to £1,000 or more. A set fee may apply for complex tasks, such as transferring a pension.  

• An ongoing fee: An ongoing fee may apply if you choose to let an adviser manage your investments, which tends to be based on a percentage of your assets under management (AUM).  

• Monthly charge: A monthly charge may apply as a percentage of your investments or a flat fee.  

Average ongoing fees are between 1% and 2% of AUM, but the percentages tend to be lower if you have more assets. 

In some cases, you may need to pay an initial advice fee, followed by ongoing charges.

There may also be underlying fees associated with investments, such as those charged by investment platforms.

Are financial adviser fees negotiable? 

While some financial advisers may be unwilling to negotiate fees, others may be more flexible. 

First, it’s a good idea to obtain a quote for the costs of the adviser’s support and advice. Once you have this, it’s worth comparing it to quotes from other financial advisers. 

You could share your quote with the financial adviser of your choice and see if they are willing to match that or offer a lower fee.  

Alternatively, you could ask whether there’s any way to reduce the expected costs and if this will impact your service.  

You could also look at the charging structure and see if it’s right for what you need help with, and if you should mix different fees for different tasks to save you money. It’s important that you have a clear idea of what you need help with and what you need from an adviser. 

You could also consider increasing the number of assets your adviser manages to reduce your fees, as many advisers have lower ongoing fees for those with larger portfolios.  

Should I choose the financial adviser with the lowest fees? 

With financial advice, it’s recommended that you choose a financial adviser who’s right for your unique circumstances so you can get the most appropriate support. 

While it can be tempting to go with the adviser with the lowest fees, you should do your research and have an initial consultation. Most financial advisers will offer an initial chat free of charge to help you work out whether they are a good fit for you.

During this chat, it’s important to find out the following:

• Is the adviser qualified by the FCA?

• Is the adviser experienced in the area I need help with?

• Are they independent or restricted?

• Does the adviser have the necessary qualifications?

• Does the adviser have experience helping clients in similar circumstances?

• Is the adviser recommended, or do they have positive testimonials from previous clients?

• Can the adviser continue to support me as my financial situation evolves?  

It’s important that you get along with your financial adviser as you’ll need to feel comfortable talking about your goals and concerns.

You might end up discussing complex financial arrangements, too, so it’s also essential that you understand their explanations.

If you are being bamboozled by jargon or you don’t feel confident saying you haven’t understood something, they aren’t the right adviser for you.

Get expert financial advice  

Finding the right financial adviser can be more complex than it initially seems. 

From looking at qualifications and experience to understanding the fee structure, there’s much to consider. 

Unbiased can quickly match you with a qualified financial adviser who can help you reach your goals.