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This article is for general guidance only and is not financial or professional advice. Any links are for your own information, and do not constitute any form of recommendation by Saga. You should not solely rely on this information to make any decisions, and consider seeking independent professional advice. All figures and information in this article are correct at the time of publishing, but laws, entitlements, tax treatments and allowances may change in the future.
If you’re not sure how best to take your pension, or if you want to make the most of your money, financial advice can be a worthwhile investment.
But how much does it actually cost? And how do you know if you’re getting good value? We’ll explain what you’re likely to pay, as well as what you’re paying for.
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Financial advisers’ fees are subject to strict rules set out by the Financial Conduct Authority (FCA). It’s important to understand how your adviser charges for advice and make sure the fee set-up works for you.
According to the Moneyhelper website, financial advisers charge anywhere from £75 to £350 an hour, with the UK average rate about £150 an hour. Some advisers prefer to charge a fixed fee or percentage-based fee rather than for hours worked.
Scott Gallacher, director at financial planning firm Rowley Turton, says the most common way financial advisers charge is a percentage of the assets they manage for you. “This means the fee grows or shrinks in line with your investments, so in a sense, the adviser’s interests are aligned with yours.”
Customers normally pay a one-off initial advice fee of 1% to 2% when they first invest, and then an annual fee of 0.5% to 1.5% of the total assets under management, according to financial adviser comparison website Unbiased.
So if you have £250,000 to invest, you may pay an initial advice fee of £2,500 to £5,000, if 1% or 2% is charged. Ongoing fees could then be £1,250 to £3,750 a year.
Some advisers offer fixed fees for specific jobs, such as pension reviews, or charge an hourly rate. Hourly rates vary depending on the type of advice needed and the level and qualifications of the financial adviser you use.
As an example, Absolute Sense charges £200 an hour for a chartered financial planner, £150 an hour for a financial adviser, £100 an hour for a senior paraplanner, and £70 an hour for a paraplanner.
Gallacher says: “Some argue fixed fees or hourly fees are better, but the downside is you’ll get a bill every time you speak to an adviser, which can put people off seeking help when they need it.”
The cost of financial advice will also depend on the seniority and experience of the adviser. Chartered financial planners are the most expensive as they usually have more experience and hold the highest level of specific qualifications.
Others may hold certifications such as certified financial planner (CFP) or chartered financial analyst (CFA), which demonstrates they’ve completed certain qualifications.
A paraplanner is a specialist who works alongside financial advisers, assisting with the research, analysis and preparing financial reports for clients. They don’t advise clients directly.
Depending on the work involved, the adviser’s qualifications, and how long it will take, a fixed fee can range from several hundred to several thousand pounds.
Alternatively, you could consider getting legal advice if your main concern is estate planning, including planning for inheritance tax or help with making or updating a will. Saga Legal, which partners with Co-op Legal Services, offers a free will and estate planning review.
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A newer, often cheaper, alternative to financial advice is a money coach. These professionals focus on budgeting, mindset and financial habits, rather than regulated investment advice. According to Octopus Money, people typically pay around £200 to £300 a year for financial coaching.
Ali Poulton, senior head financial coach at Octopus Money, says a money coach is someone who helps you take a step back, look at your overall financial picture and build a clear, personal plan for the future.
“Think of them like a personal trainer for your finances – offering guidance on your money habits, priorities and goals, without recommending specific financial products. They’ll help you get organised, understand your options and feel more confident about your financial decisions.”
The key difference is that financial advisers are regulated by the FCA, which can give you some protection if the firm goes out of business. You can also use the Financial Ombudsman Service if you have a complaint.
Financial advisers can give tailored advice on topics including investments, pensions and tax planning. Money coaches aren’t regulated and won’t tell you which products to choose, but they’re there to help you work out what matters to you and what steps you might take next.
There are places to get free financial advice on a basic level, although the guidance will not be tailored to your situation. Money Wellness, National Debtline, StepChange Debt Charity and Citizens Advice all offer free debt advice and can advise on setting up formal debt solutions such as debt management plans and debt relief orders.
Age UK can help over-50s with a free benefits check over the phone (0800 678 1602), as well as with applications for benefits, while online tools from Turn2Us and Entitled To can also help with guidance about benefits.
Pension Wise from Money Helper offers free pensions ‘guidance’ for over-50s. Guidance involves an overview of your options, but it doesn’t include recommendations of specific products or companies.
Anita Wright, an independent chartered financial planner, says new clients are typically in their 50s. This is a time of life when people start to make sense of their pensions, plan when to retire, or work out how much they’ll need to live on.
“Financial advisers take a forensic look at everything – from pensions and savings to insurance and future care costs. They can identify any shortfalls, test different scenarios (like retiring later or helping family financially), and ensure the level of investment risk you’re taking aligns with the returns you realistically need.”
Your initial meeting with a financial adviser will usually be free, and can be in-person or online. At the meeting the adviser should explain how much their advice will cost and agree with you how you will pay for it. This information should be given to you in writing, so you can take it away and consider it carefully.
The first meeting is the start of the process to understand your financial situation, goals and risk tolerance. So regulated advice is not given at this stage. You might get a high-level assessment of your situation, and initial thoughts on potential areas for improvement.
Unlike mortgages – where it’s common for the broker to earn a commission from the product provider – commission payments to regulated financial advisers from providers of pensions, investments and annuities have been banned since 2013.
The FCA introduced the rules to ensure that any product recommendations wouldn’t be influenced by how much money the adviser would make.
Financial advice becomes especially useful at key life stages or decisions, such as planning your retirement income, inheritance and estate planning, and managing investments. If it's specifically inheritance tax or estate planning that you’re looking for, you could also consider legal advice.
Karen Barrett, founder of Unbiased, says that one of the biggest areas where an adviser can offer help is with retirement planning to ensure that you can afford the retirement you want.
“This is particularly important as inherited pensions are expected to be brought into inheritance tax from April 202, which could have a huge impact on over-50s by potentially changing how they spend their pension and conduct their estate planning,” she adds.
Saga has partnered with HUB Financial Solutions, who can help you find the right annuity for you from the whole of market. If you take out an annuity using their service, Saga Money will earn a commission.
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