How much does financial advice cost and how are advisers paid?

Financial advisers in the UK are not allowed to take commission on investment or pension advice — they must charge fees instead, and they are required to explain those fees clearly before any advice is given (under FCA rules known as COBS 6.1A, which covers adviser charging).

There are three main charging structures:

**Percentage of assets** — a fee calculated as a percentage of the money being invested or managed. Based on FCA data, typical initial charges are around 1.8% of the amount invested, with ongoing annual charges around 0.77% a year.

**Fixed fees** — a set amount agreed in advance for a defined piece of work, such as a retirement review or a pension transfer analysis. Fixed-fee models are becoming more common.

**Hourly rates** — some advisers charge by the hour, particularly for one-off consultations.

Many advisers offer a free initial consultation, which lets you understand what they would do and what it would cost before you commit.

Whether a fee represents good value depends on the size of the pot, the complexity of your situation, and how long the adviser relationship lasts. Research from the International Longevity Centre and Royal London found that people who took regulated advice were, on average, significantly better off financially over a decade than those who did not — though individual outcomes vary.

Advisers are required to give you a personalised illustration of costs before work begins, so you should never be left guessing. Speak to a regulated financial adviser to get a clear picture of what advice would cost in your specific circumstances.