Financial advice costs
Paying for financial advice
ASIC receives complaints about the fees charged by financial
advisers. It's important to understand exactly how your adviser
will be paid before you engage them, and again before you agree to
any of their recommendations.
Here we outline some of the fees for seeing a financial adviser
as well as your payment options.
The first meeting with a
The first meeting with an adviser is usually free. During this
meeting, you and the adviser can discuss your advice needs and the
adviser can give you an idea of what they can do to help you.
The adviser will also be able to tell you how much the advice
will cost so you can decide whether to proceed any further. Make
sure the cost is given to you in dollars, not just as a percentage
of the amount you have to invest.
Statement of advice fee
If you decide to continue with the adviser, they will prepare a
statement of advice (SOA) that will
formally document the advice, the strategies and any financial
products they recommend. The cost for preparing the SOA will be
billed to you or may be deducted, with your permission, from the
balance of your investment.
Did you know financial advice fees are negotiable? Consider
negotiating with the adviser about the amount you'll pay for the
The cost of the advice will depend on its scope. As a guide,
expect to pay between $200 and $700 for simple advice and between
$2000 and $4000 for more comprehensive advice. If you've agreed to
ongoing advice, some of the cost may be paid over time.
If you receive advice about insurance, you may not have to pay
for the SOA. This is because the adviser will be paid commissions
from the insurance company.
Even if you decide not to proceed with the adviser's
recommendations, you will generally be expected to pay for the
preparation of the SOA.
implementing financial advice
If you decide to accept the adviser's recommendations there may
be a fee for implementing the advice. This pays for administration
work. You may be able to negotiate the rate with your adviser.
There are usually different payment options. You can agree to
pay upfront or the cost can be deducted from the investment.
Ongoing fees for financial
If you've agreed to pay a fee for ongoing advice, it's important
to understand what your fee will cover. Services may include:
- Regular reports on your investment portfolio
- Regular reviews with your financial adviser
- Invitations to seminars.
Bronze, silver, gold or platinum services
Many advice businesses have 'bronze', 'silver', 'gold' or
'platinum' services you can choose from, with fees scaled according
to the services you receive or the amount of contact you can have
with your adviser.
Advisers can charge another implementation fee in addition to
your ongoing advice fee if you want to change your financial plan
following a review.
Annual fee disclosure statements
If you've agreed to ongoing advice, you will receive an annual
fee disclosure statement that will outline the fees you paid, the
services you received, and the services you were entitled to
receive for the previous 12 months.
Carefully consider the information in your fee disclosure
- Have you benefited from the services you paid for?
- Were they worth the cost?
- Are you happy to pay the ongoing advice fee for another 12
You can end your ongoing relationship with your adviser at any
time. See working with a financial
adviser for more information.
See questions to ask a
financial adviser for talking points you can use to check the
cost of ongoing advice.
Never write cheques payable to your adviser if the money will be
used for investments. Make the cheque payable to the product
Commissions and fees
for financial advice
Commissions and volume-based payments for recommending financial
products can influence the advice given by financial advisers.
Commissions were banned on new investments and super products
from 1 July 2013. Some other commissions, for example, for selling
life insurance, remain.
However, if you bought a financial product before 1 July 2013
the adviser may continue to receive a commission each year for
advising on that product. The commissions will continue to be
deducted from the money you have invested until you leave that
product or end your relationship with that adviser.
Information about commissions may not be included in your fee
You are likely to be charged a fee for every investment product
you buy. Find out about all the fees, add them up and see if the
investment still appeals to you.
Find out about the fees you're paying
If you're unsure about the fees you're paying, talk to your
adviser. Ask them to explain the products you have bought and
whether there are commissions involved.
If commissions are being deducted from your investments and
you're not happy with this arrangement, speak to your adviser about
your options. You may be able to switch to a product that doesn't
involve commissions, or arrange for the commissions to be rebated
Remember, any fee you pay is less money you have to invest.
Complaining about fees
If you're not happy with the adviser's response (or they refuse
to speak to you) you should make a complaint using the adviser's
See problems with a financial
adviser for more information about what to do if you're unhappy
with the service you've received from an adviser.
See questions to ask a
financial adviser for talking points you can use to check how
much you'll pay for advice.
Case study: Edward asks to see all the fees
Edward goes to see a financial adviser.
The adviser takes the time to understand what Edward wants to
acheive and offers to put together a financial plan for $1,500 and
implement the advice for a further $1,500. The adviser also tells
Edward that there may be other fees for the products that have been
recommended. Edward agrees to pay for the financial plan.
At the next meeting, Edward receives the plan which also
outlines the additional fees for implementing the advice. The fees
- $1,000 a year payable to the adviser for reviewing Edward's
- $1,500 a year for access to the investment platform
- $1,500 a year payable to the investment managers for managing
- a further $1,000 a year for an income protection policy that
Edward asks the adviser for more information about the total
amount he is payng in fees, and who's receiving each fee. The
adviser tells Edward he can find this information in a table at the
back of the SOA
that summarises all the fees and charges relating to the first year
|Fees payable by Edward
||Fees paid by Edward
||Fees charged by % per annum
||Fees received by
|Financial plan fee
on $200,000 Investment
|Ongoing advice fees
|Platform administration fees
|Investment management fees
|Total ongoing management fees
|Insurance premiums year 1 (100% commission to
|Total fees in Year 1
Edward now understands that the total fees for the first year
Of course an adviser must be remunerated for
their services, however, it's in your best interest to know how
much and how often you will pay for the advice you receive.
Last updated: 31 May 2016