What Types of Fees will you Likely Encounter when Engaging an IFA?
Whether you are looking for a full financial healthcheck to consolidate your finances, to re-evaluate your pension provision or to select a new financial product, there are a number of services that can be provided by the UK’s IFA community.
The reality however is that regardless of the services that you may need professional assistance with, there are a range of fee models and structures that you may come across depending on the level of expertise and time commitments involved. Some common types of financial advisory fees include:
- Fixed Fee
The IFA will perform a specific service for a set price agreed in advance. We would suggest that you confirm what exactly the fee will involve in writing prior to any work starting.
- Percentage of Assets
If you have an adviser managing your investment portfolio over a period of time, they may charge a percentage of the portfolio’s total value per annum as opposed to a fixed fee. In this way the fee grows as the portfolio grows.
- Hourly Rate
With an average of £170.00 per hour in the UK, this could be a useful structure for charging smaller and more bespoke services. It is important however that you get a full and time specific quotation from your adviser.
- Ongoing Portfolio Management Fees
It is also worth noting that some advisers may ask for an ongoing fee to manage your portfolio – ranging from 0.5-1%.
Whilst these are the most common fee structure, an adviser may request an alternative payment model. The key consideration however is the level of service and technical expertise that you will be able to access deal from your IFA.