According to an article featured in Citywire, only 1.3% of financial advisers do not charge percentage-based advice fees. At Balance: Wealth Planning, we provide financial planning using fixed fees. Our team don’t believe it’s fair to charge people different rates for a similar service. In this blog, we share our findings on financial advice fees, along with our approach.
The problem with financial advice percentage fees
Research conducted by Citywire New Model Adviser found that 84.7% of advisers only offer percentage fees for their advice. Furthermore, 98.7% of advisers have some form of percentage fees in their offering. Despite fixed fees appearing on the scene around a decade ago, it’s surprising that this fee model isn’t in use more today.
In 2023 the Financial Conduct Authority (FCA) carried out a review of 1,300 firms in relation to their percentage fees. The FCA are looking to clamp down on unjustifiable or high fees, especially when services are no longer being delivered. Pressure from the FCA has continued; the regulatory body has recently asked 20 of the largest firms for data relating to their advice services.
So, what does this mean for fixed fees being charged by financial planning firms?
Fixed fees are fairer for everyone
We believe a fixed fee model is a much fairer approach to providing financial planning advice. We tailor our services to individuals, so our fees relate to people’s circumstances. Some people might have a complex situation, while others might only need a low level of support. We don’t think it’s fair that fees should rise when investments increase.
By working holistically, we can improve our client’s financial situation using our team’s expertise. And this is the basis of our fixed fees approach. We look at both the time needed to create a bespoke financial plan and the support required to achieve the plan. So, put, our clients pay for the exact support they need.
By tailoring our financial support and fees to reflect your specific needs, you can enjoy a relevant service that relates to your own personal circumstances. We help you organise your money, so it works harder for you. Our team use cash-flow modelling tools to help you achieve your aims and aspirations.
We believe financial planning is an investment not a cost. As our team’s advice is not influenced by your fees, you will always benefit from our expertise, no matter how much you pay us. Our focus is on helping you achieve your objectives in a way that ensures you can still enjoy your lifestyle today.
How do our fixed fees work?
Let’s start with the financial plan. When we have prepared a financial plan for you, this is charged as a one-off fee. We then charge an annual fee, which is then broken down into monthly payments, and can be paid from an investment, pension or personally.
We have three main financial planning packages:
- Guidance Package – this provides you with essential information. It does not include regulated advice. Costs usually start at £2,670 for a financial plan, and our ongoing planning service starts at £1,860 a year. You can add extra services such as regulated advice to this package as you need them. This package is only available to those who meet our criteria. Read more…
- Focused Advice Package – this provides information similar to the Guidance Package with the benefit of extra advice in certain areas. Costs usually start at £3,445 for a financial plan, and our ongoing service starts at £2,635 a year. You can also add extra services, including regulated advice, as you need them. This service is only available to those who meet our criteria. Read more…
- Full Service – this includes all the information you need and completing recommended actions. Costs can range from £4,800 – £20,000 until the plan is completed, and then a similar amount every year. In some cases, our fees can exceed this if you have more bespoke needs or complex circumstances. This package is for invested wealth levels around or above £10,000,000. Read more…
Financial Planning, Nottingham and Lincoln
At Balance: Wealth Planning, our team provide financial planning advice on savings, investments, pensions, retirement and inheritance planning. In the first instance, we’ll invite you to attend a complimentary discovery meeting before you commit to our fees. We’ll ask you what you want from your life, both now and in the future, along with any expected big life events.
Once we have a clearer view of your financial situation, we’ll look at how we can provide you with the right support. We can carry out a financial review, produce a forecast using cash-flow planning software, and create a sensible financial plan that aligns to your values.
If you would like more information on our financial planning services or our fixed fee approach, get in touch.
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