UK Average Financial Advice Fees Research

UK Average Financial Advice Fees Research.

Unbiased, the financial adviser search and fund directory has completed a review of the average fees charged by financial advisers.

Overall it found that the average hourly rate for financial advice had fallen from £170 to £150 but overall, most financial advice fees for different categories of advice had remained static over the last year.

The results are as follows and in an effort for further transparency, we have included our fees for comparison.

Hourly Rate Average 2014

• £150 per hour is the average.
• Our lowest hourly rate is £120 per hour.
• You save up to 20% on the UK average fee with us.

£100,000 Pension Fund into Annuity and Lump Sum 2014

• £1,500 average fee for annuity.
• Our lowest fee for a standard annuity (with lump sum paid) for £100,000 is £525.
• You save up to 65% on the UK average fee with us.

Regular Pension £200pm

• £500 average fee for arranging a new pension.
• Our lowest fee for arranging a £200pm pension plan is £525.

£50,000 Investment

• £1,500 average fee for investing this amount.
• Our lowest fee for arranging a £50,000 investment is £1,125.
• You save up to 25% on the UK average fee with us.

Comment

Our fees have always represented the time for works involved and the liability involved. Hence, there is some different between our fee for a low risk annuity and investing £50,000 where this is greater risk to both your, the client and ourselves.

Interesting though, and it is not rocket science to work out. The average financial adviser still appears embedded in charging percentages.

Let’s do the maths:

Average annuity fee for £100,000 = £1,500. That’s 1.5%.
Average investment fee for £50,000 = £1,500. That’s 3%.
In the old days of commissions, most annuities paid commission of 1-1.5% and most investments paid a commission of a minimum of 3% for an ISA up to 7% for a bond. So it would appear that many financial advisers are still charging percentages just in the same way they got paid commissions as percentages.

In addition, compare the single pension annuity application fee average of £1,500 to the single regular premiums pension application at £500. How can just one application form to be researched and processed for similar works, costs be so different. We charge £525 for either as the works/time are broadly the same. We still think this all smacks of many financial advisers still charging at “commission” rates but using the word “fees” instead.

How did we fair? 

In the spirit of openness and so that you have a fair comparison of our services, we publihsed our rates above.
We would add that the average advice fee rates above cover the whole of the country. London and the South East financial advice fees being higher than the UK average. Given that our fixed fees are mainly for advice in London and the South East yet are still lower than the national average, we therefore know that our fees are competitive for London and South East and still competitive for most of the UK.