Before the Financial Conduct Authority’s (FCA) Retail Distribution Review (RDR) went live on 1st January 2013, financial advice on pensions and investments as well as all other financial products could pay commissions on the sale of any product. Make no mistake, you still paid for the advice via higher charges inside the pension, investment, or life insurance cover. After 1st January 2013, RDR required that:
How much to expect to pay for financial advice?
The easiest way we can break this down for you is to give you a basic idea of the costs involved to run our small, Husband and Wife financial advisory practice.
For 2 X financial advisers, working the average 190 working days per year, that’s nearly £1,000 per day needed as chargeable time just to cover business expenses before the owner/directors can make profit and get paid themselves.
This equates to £143 per hour (working a 7-hour day). Our lowest hourly rate (with the 25% online discount) is £145 per hour. As you may have guessed, we work much more hours to ensure we make a profit.
When you talk to any qualified financial adviser, know that:
We calculate the fees for all works that we do based upon a core fee of the time involved plus a ‘risk fee’ to match the liability that we take on e.g., the liability for a £200,000 investment is quadruple that of a £50,000 investment even though the time take to deliver the advice may be similar.
If we can make or save you say £100,000 in inheritance tax or protect 50% of your wealth from any care fees means test, if we charge you £2,000 to do this, then we believe that is fantastic value added.
If we can save you doing 100 hours of research and learning only for you to get it wrong, maybe paying for 15 or 20 hours of work knowing that it will be done right and you get the right product, advice or service that may make or save you £000s as well as time, it must be worth it.
If you are paying £1,000 a year to service and MOT your car worth say £20,000 but devaluing everyday and you pay your financial adviser less or don’t have one, then you are at risk.
Your window cleaner may charge you £50 an hour for two employees on site to clean your windows, and they repeat the same process every month. If you spend £600 per year on window cleaning and you pay your financial adviser less or don’t have one, then you are at risk.
This is why financial advice is more expensive and perhaps more valuable than your car service or windows being cleaned. We all need window cleaners and car mechanics and they have costs as well as providing a valuable service but we also all need professional financial advice too and we hope you now understand why it is likely to be more expensive than your window cleaner.
ESSENTIAL COOKIES ONLY - WE DO NOT TRACK YOU
WE DON'T LIKE BEING TRACKED SO WHY WOULD WE 'SPY' ON YOU?
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