How Much Does Financial Advice Cost?

There’s an old saying in life which states that you need to speculate to accumulate, and this is especially true when attempting to build wealth and secure your financial future.

Opening a savings account is the most simple embodiment of this rule, as it requires you to commit a certain amount of your monthly disposable income into a vehicle that can grow and accumulate interest over time. Investing in financial advice is also an example of this, and one that can deliver huge gains over time.

From organising your finances and building long-term wealth to in-depth estate planning, financial advice can provide actionable guidance to meet both short-term and future needs. In this post, we’ll look at the cost of securing reputable financial and the potential ROI of this endeavour.

The Primary Benefits of Seeking Out Financial Advice

On a fundamental level, financial advice helps you to make informed decisions and build wealth over time, while also identifying potential issues and actionable solutions.

Beyond this, employing the services of industry experts lends itself to active wealth and asset management, which focuses on real-time trends and uses research to deliver the best results over a concerted period of time.

In the case of service providers such as WH Ireland, these providers also boast incredible knowledge and a keen sense of determinism, as they consider risk and investment performance as two sides of the same coin and build portfolios that reflect this.

This is particularly important when seeking out private wealth management services, as the focus must always be on optimising returns with the constraints of the prevailing economic climate.

The Cost of Financial Advice – The Key Considerations

Not only does the quality and type of service vary from one provider to another, but so too does the cost. Providers also apply their charges in a number of different ways, with flat rate fees increasingly popular in an age of transparency.

With flat fees, providers charge a single sum that covers the entirety of their service, from the development of a financial plan to its implementation. This type of charge has become prevalent in the financial services sector since the Great Recession, enabling investors to optimise their spend and ensure that they achieve value for money.

Service providers may also charge an hourly rate to client, enabling them to apply fees based on the actions that they undertake on your behalf. Once again, this is a simple and easily evidenced payment method, with reputable firms likely to charge anything between £50 and £250 per hour.

The main downside here is the issue of incentivising your service providers, as there’s less of a motivation for firms to process requests quickly. This is why trust is so important when paying an hourly rate, so you can rest assured that you’re not paying over the odds for your service.

Historically, service providers would charge a percentage rate fee, which was a direct proportion of the money that you want to invest. This will ultimately translate into a fixed share of your assets, with an initial fee of between 1% and 3% applied depending on the size of your portfolio.

In some instances, firms may also apply an ongoing percentage charge, ranging between 0.25% and 1%, so this is something to factor into your financial planning if you settle on this billing option.

The Last Word – Managing the Cost to Suit your Circumstances

Understanding these payment methods and the average cost is important, as it helps you to select the option that best suits your needs and budgetary restrictions.

As a general rule, investors with relatively small capital holdings will prefer a fixed fee or an hourly rate, as this enables them to manage the deployment of their cash more effectively and understand precisely how much is left to invest.

The same can be said of investors with larger sums of money, of course, as they’ll be required to pay a heftier commission if service providers apply a percentage charge. Still, they’ll usually be open to this type of payment, particularly if the firm in question can provide them with genuine expertise that optimises their future returns.

Ultimately, the cost of financial advice will vary depending on your choice of service provider, the value of your existing assets and the payment method that you decide upon. Entering the market with an informed and enlightened mind will help you to make the right decision, however, while also helping you to avoid unregulated service providers who try to market a bargain-basement alternative.