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How much does a financial planner cost and what do I get?

Posted by Scott Millar, Financial Planner

“How much does a financial planner cost?” is a reasonable and obvious first question when deciding how you might better manage your money. 

It’s difficult to find a direct answer to this simple question. This article will help to dispel the doubts and give you an idea of what to expect. You’ll also see why it’s worth pursuing expert advice and planning for your money now, and how it can make the difference to your future finances. 

Most people don't know if financial advice is worth the money… 

Recent research from Opinium reported that most people don't know if financial advice is worth the money. And 46% of those surveyed said they didn’t know how much money they’d need to have before paying for professional advice would be worthwhile. 

On average, people believed they would need savings or investments of £117,000 before it was worth paying for advice. 

… or realise the value of having a financial planner by their side 

Over 10 years, customers who sought financial advice were, on average, £47,000 better off than people who had managed their own finances, according to research carried out by Royal London and the International Longevity Centre UK (ILC). 

They also found that those who formed an ongoing relationship with their financial planner were up to 50% better off than those who had only taken advice once. 

This is not to mention the improved financial wellbeing and emotional wellbeing reported by people who partner with a financial planner. 

The right financial planner will help you create a focused plan that centres on the things you want to achieve from your life. They can help you to avoid high charges, which can harm long-term financial goals. They will also seek low-cost, tax-efficient investment solutions to give your money the best potential for growth. 

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Why fees matter 

Fees matter because although fund performance can vary, you still have to pay the fees and charges no matter how your investments are faring.  

Over time, the fees you pay can make a huge difference to the value of your investments, and high fees can have a palpable and direct impact on your returns. 

The chart below shows the effect fees can have on the value of your investments, assuming 5% growth a year on a £100,000 initial investment. 

 

10 years 

20 years 

30 years 

1% annual fee 

£147,314 

£217,015 

£319,694 

1.25% annual fee 

£143,636 

£206,314 

£296,341 

1.5% annual fee 

£140,041 

£196,115 

£274,641 

You’ll see from this example that paying just 0.5% higher fees could leave the value of your investment more than £20,000 lower after 20 years, and £45,000 lower after 30 years. 

Financial planners have different ways of charging 

Different financial planners will charge different amounts for their service, and the way they take payment will also vary between practices. 

The best financial planners will make things simple and clear. They will be transparent about their fees.  

You should expect your financial planner to tell you what they charge, and how you can pay, early in your communications. They must provide information about their charges before providing any advice or planning services. 

Most will offer an initial meeting for free, which should give you time to understand how they work, how they can help you, and give you the chance to work out whether you feel comfortable working with them. 

What First Wealth charge to take care of all your financial planning needs 

As you might expect from above, our fees are fair and easy to understand. There are no exit charges and no hidden costs. 

You don't pay a penny until you've had the chance to test us out. By the time you pay, you'll know how we work and have confidence that we understand your needs. 

Our initial meeting is free 

This is an informal opportunity for us to help you, and us, to know if we're a good fit.  

Financial planning is all about the long term, which requires a lasting relationship. We both need to know that working together is going to feel good for many years to come. 

We charge fees in three ways: 

  • A fixed fee for your financial plan (between £2,000 and £5,000 based on complexity) 
  • An implementation fee for investing money (1%) 
  • An annual fee for ongoing advice and service (1%)

The amount you'll pay will be determined by the services you want us to provide. And we only ever ask for payment after we have done the work and you're 100% happy with your financial plan. 

Learn more about our fees and how we charge. 

What to expect from your financial plan 

Before we build your financial plan, we'll work with you to understand what's most important to you in life and why that matters. We'll help you identify, achieve and maintain your desired lifestyle without the fear of running out of money, whatever life might throw your way. 

We'll start by looking at where you are now, and where you want to be in the future. We will devise your financial plan with a strategy to help you get there and will include recommendations for new investments and pensions. 

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We help keep your plans on the right track 

Knowing that life can get in the way of even the best-laid plans, we have annual review meetings to help you stay on track. On top of this, regular audits will help make sure your actions and investments remain aligned with your goals. 

If you are interested in finding out how a great financial plan might look for you, and how much it will cost, please get in touch. Email us at hello@firstwealth.co.uk or call 020 7467 2700. 

This document is Marketing Material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested

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