How Much Does Financial Advice Cost?
3 Dec 2018 | COMMENTS: 0 | Author: Ryan Smith | General
There is no doubt that taking the decision to look after your finances is a wise one. While the basics, such as budgeting, can be done personally, you may well find using the services of a financial advisor helpful. A financial advisor can give clear financial advice and help you prepare your financial future. They can also:
- Recommend the best investments to make.
- Help manage your money in tax-efficient savings for the future.
- Stop you from making costly financial errors.
One sticking point for many people, however, is the question of, “How much does a financial advisor cost?” It can seem counter-intuitive to be spending money on a service in order to actually make or save money in the long run. While it cannot be denied that there will be a charge involved for their services, a qualified financial advisor will almost certainly see that initial investment returned and paying dividends.
Financial advice fees can vary depending on how much time they spend with you and how much advice you need. Naturally, the more work they put in, the more they will cost. The hourly cost will depend on who you use, but it usually ranges from around £75 to £300, though the UK average is around £150 per hour.
If you do not wish to pay an hourly rate, negotiate with the advisor to see if they would instead set a fixed fee for the work or even an ongoing monthly cost for ongoing advice. A fixed fee could cost in the hundreds of pounds, depending on how long it takes to complete, while a monthly fee would naturally be less than paying it all at once.
What can affect financial advice costs?
As well as the actual time spent on any advice given or work undertaken, other factors may come into play, such as:
- How qualified the advisor is.
- How complex the work or advice needed is.
- Location, and the associated costs.
- If the service is provided over the phone or online.
It really is best to speak to the financial advisor that you contact first to confirm the cost so that they can let you know for sure. Most will offer a free initial meeting to get an idea of what kind of financial advice you need, and all advisors we connect you with via Local Financial Advice offer this. One key point to be aware of is that since 2013, no financial advisors are allowed to charge a commission for any products that they recommend – so you know they have only your best intentions in mind.
The final question that most people have after fees are confirmed is, “Are financial advisors worth the money?” The best way to answer this is with the results of a study by money management firm Russell Investments. They concluded that a good financial advisor can make their client an average 3.75% return on their money, while only costing around 0.5% of it.
With this in mind, it is clear that the initial outlay for a financial advisor is worth it.