Understanding Financial Advisor Charges
Financial advisors in the UK typically charge based on a percentage of the assets they manage. According to the Financial Conduct Authority (FCA), the average initial advice fee is 2.4% of the amount invested, the average ongoing advice fee is 0.8% per year, and the total fee (including product and platform charges) is approximately 1.9% annually. The type of investment product utilised will impact the total ongoing fee with passive investments bringing the cost down slightly and active investments raising the cost. It’s worth noting that our fees sit well below the FCA averages.
Benefits of Percentage-Based Charging:
VAT Exemption: Fees for financial products like pensions or investments are VAT-exempt, reducing overall costs.
Flexible Payment: Clients can often pay fees directly from products like pensions, simplifying payments and potentially offering tax advantages.
While most financial advisors in London charge a percentage of assets, fixed fee financial advisors do exist, typically billing at an hourly rate of £250-350. These fees can make fixed-fee advice comparatively expensive for ongoing wealth management, but they are well-suited for clients seeking targeted advice on specific issues, such as pension transfers, tax planning, or one-off investment decisions. For Londoners needing focused, project-based guidance rather than continuous portfolio management, fixed-fee advisors offer transparency and cost predictability.
Independent vs Restricted Advice
Financial advisors in the UK are either independent or restricted, impacting the scope of advice provided:
Independent Financial Advisors (IFAs): Offer unbiased advice across the entire market, recommending products from any provider to suit your needs, ideal for Londoners seeking diverse investment options.
Restricted Advisors: Limited to recommending products from specific providers or certain product types, which may streamline advice but could limit choices for complex portfolios.
Tip: Check the advisors against the FCA register to check there record & ensure they are authorised to give regulated advice.
The Vertical Supply Chain Concern
Some “independent” firms operate within a vertical supply chain, where they are part of a larger group that includes product providers or platforms, potentially influencing recommendations. Examples include AFH Financial Group, Evelyn Partners, Quilter, and St. James’s Place, which may prioritize in-house products. The FCA is reviewing the independent status of such firms to ensure transparency. Notably, Quilter will transition to a restricted model in January 2026, allowing them to focus on their own products, which may limit client options but align with their business strategy.
Beware of Lead-Selling Sites
Websites like Unbiased.co.uk connect clients with advisors but often profit by selling leads, prioritizing revenue over matching you with the best advisor for your needs in London’s competitive market. Instead, consider:
Direct research or referrals from trusted sources in London.
Verifying credentials via the FCA register (fca.org.uk) to ensure regulatory compliance.
Conclusion
For London investors, choosing a financial advisor involves evaluating costs, understanding independent versus restricted advice, and avoiding lead-selling platforms. Opt for transparent, FCA-regulated advisors, ideally independent, and verify their credentials directly. By navigating these factors, Londoners can secure tailored financial advice to achieve their investment goals.
About the author
Louis is a regulated independent financial advisor with a diploma in financial planning from the Chartered Insurance Institute. He founded his own financial planning firm in 2019 & has specialised in helping high earning individuals on all personal financial matters.
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