How much do financial advisers charge?

Bestinvest

Bestinvest now operates as part of Evelyn Partners, which is the wider brand incorporating names such as Tilney, Towry and Smith & Williamson. If nothing else this highlights the extent of consolidation amongst financial advisers, with the potential for big profits attracting private equity buyers.

How much does Bestinvest charge?

Bestinvest's platform offers investments from across the market, as well as a range of ‘ready-made’ portfolios which have annual charges (OCF) of around 1.5% plus a platform charge of up to 0.2%. The platform charge for other investments rises to 0.4% a year (on the first £250,000).

Whilst Bestinvest caters for diy investors, there is free access to ‘money coaches’ as well as paid-for investment advice with options costing £295-£495.

Bestinvest's advice options are firmly targeted at choosing investments, so if you require financial planning (e.g. to review transferring an ISA or pension, or income drawdown in retirement) you will need to talk to Evelyn Partners. Here the charges transparency ends, with no charges information or rate card on their website.

The savings via us

In most cases we would expect to offer a full financial planning and investment service for considerably less than most Bestinvest clients pay for a ready-made portfolio. As a guide, on a £500,000 portfolio we would expect you'll save around £3,500 a year, with the added included benefit of financial planning. The savings versus Evelyn Partners will be higher still, plus a potential further substantial savings in initial fees.

https://www.bestinvest.co.uk/accounts/charges

Brewin Dolphin

Continuing the consolidation trend, Brewin Dolphin is currently under offer from Royal Bank of Canada. Whilst better known for investment management, Brewin Dolphin also offers a financial planning service.

How much does Brewin Dolphin charge?

To its credit, Brewin Dolphin publishes a comprehensive charges guide on its website. Unfortunately, these charges are jaw-droppingly high. Clients taking financial planning advice pay an upfront fee of 2.4% on the first £500,000 and 1.2% on the next £500,000 (so £18,000 if investing a million), with an annual fee of 0.6%. Investment advice/management charges are in addition, as per below.

Brewin Dolphin charges 1.2% a year for investment management plus £20 per transaction. Coupled with financial planning and underlying fund charges, you'll likely pay around 2.4% a year. You pay less if just opting for investment management but even then, annual costs for the discretionary management service typically come in at over 2% a year.

The savings via us

As a guide, on a £500,000 portfolio we would expect, at the very least, to cut overall costs in half versus Brewin Dolphin, potentially saving over £7,000 a year in annual fees with further savings in upfront costs.

https://www.brewin.co.uk/sites/brewin-corp/files/our-services-and-charges-sept18.pdf

Chase de Vere

Long-established adviser Chase de Vere has changed hands a couple of times over the years and is currently owned by Swiss Life.

How much does Chase de Vere charge?

Chase de Vere offers the choice of a percentage or hourly fee for its financial advice service. Opt for percentage fees and you'll pay up to 3% for initial advice followed by up to 1.08% a year, with the hourly option costing £250 - £400 per hour (£80 for administrators). Fund and platform charges apply in addition.

Whilst Chase de Vere says it may charge less for larger sums invested (which we suspect is code for being open to negotiation), it also potentially charges new initial fees of up to 3% when advising on existing investments (for example, switching funds or re-balancing a portfolio). This feels especially steep, given Chase de Vere will already be charging its annual advice fee of up to 1.08% for ongoing service.

All in all, we estimate Chase de Vere clients typically pay total annual fees (advice, funds & platform) of around 2% a year. But this could be somewhat higher when factoring in the additional 3% initial advice fees for routine ongoing advice.

Chase de Vere has been criticised in the press over both its sales incentives to advisers (luxury overseas trips) and for reportedly receiving a share of the annual fee charged by their preferred platform provider.

The savings via us

As a guide, on a £500,000 portfolio we would typically save Chase de Vere clients around £5,000 a year in annual fees, and potentially considerably more when factoring in that additional 3% initial charge. Clients also have the peace of mind that we don't incentivise our advisers to sell, nor do we receive payments from third parties.

https://chasedevere.co.uk/understanding-our-fees/

Hargreaves Lansdown

Hargreaves Lansdown (HL) is best known for its DIY 'Vantage' platform service, but also has its own range of HL 'multi-manager' funds and a financial advice service.

How much does HL charge?

The financial planning service has an initial charge of 2% on the first £200,000 and 1% on the next £800,000, so £12,000 on £1 million (VAT might apply in addition). Ongoing financial advice is optional, but if you want this you'll pay 0.365% a year (again, VAT might apply). There is also an investment-only advice service (i.e. no financial planning), charging a 1% initial fee on up to £1 million.

You'll also need to factor in platform and investment charges. The HL platform costs up to 0.45% a year and if the advisers recommend HL multi-manager funds this could add around 1.2%+ a year (OCF).

The savings via us

From our experience of Hargreaves Lansdown advised customers moving across to us, they would typically save several thousand pounds a year overall on a £500,000 portfolio.

HL DIY clients have also moved across to us (having decided they want advice). In many cases they have done so at a broadly similar overall annual cost, with the added benefit of receiving financial planning and investment advice.

https://www.hl.co.uk/financial-advice/cost-of-financial-advice

St James's Place

St James's Place (SJP) is a little different to many advisers, as it sells its own products and pays its advisers out of those product charges. This bears a resemblance to the old sales commission era, and SJP has received a lot of criticism in the press for its highly-incentivised sales culture.

How much does SJP charge?

Investment accounts, (which includes ISAs) have very high initial charges of up to 5%, plus total annual charges typically ranging from 1.5%-1.9%. Pensions have slightly higher annual charges at around 2% but no initial charge, as this is replaced by a six-year exit charge (6% in the first year, falling to 1% in year 6).

SJP's 5% initial charges also usually apply to future contributions, for example topping up your ISA. And when paying money into a SJP pension you need to confident of staying put for at least six years, to avoid the exit charge.

The savings via us

As a guide, on a £500,000 portfolio we would typically save St James's Place clients around £3,500 a year (more still if a pension). And long-term cost savings will likely be significantly higher once SJP's high initial charges have been factored in.

https://www.sjp.co.uk/charges

Quilter

Quilter has bought a number of advice businesses in recent years, meaning there is a diverse range of advisers under its roof. Whilst these advisers are mostly free to set their own fees, Quilter's does publish typical rates, which we'll use here.

How much does Quilter charge?

Expect to pay a 2.5% initial charge followed by 0.5% to 1% a year, the latter depending on the level of service provided (0.75% for a 'standard' level of service).

Quilter also has an in-house platform and investment management services. Some Quilter advisers are restricted to using the platform, whilst others are independent. It's worth checking as the Quilter platform is more expensive than some, with annual charges ranging from 0.15% to 0.50% depending on the sum invested.

The savings via us

As a guide, on a £500,000 portfolio we would typically save Quilter clients around £3,000 - £5,000 a year.

https://www.quilter.com/financial-advice/advice-services/investments-and-pensions-advice-costs/

Nutmeg

Nutmeg is the standard bearer amongst the so called ‘robo-advisers’, being investment management of a range portfolios. There is now also a financial advice option costing, although this only covers new monies to invest, not reviewing any existing investments or pensions you may have.

How much does Nutmeg charge?

Nutmeg charges £575 for advice and since there are no annual reviews or ongoing advice, these would be subject to a new £575 charge.

In addition you'll pay for Nutmeg's investment service, which costs from 0.71% to 1.02% a year on the first £100,000 invested with reduced fees on higher amounts. Whilst this is low versus many traditional investment managers, much of this is due to their use of low-cost index trackers and Nutmeg’s own charges are reasonably high (e.g. 0.75% on the first £100,000 for most portfolios).

That said Nutmeg may be a good consideration for younger investors, perhaps benefitting from a one-off review but then requiring little ongoing help. However, even in that scenario simply buying a portfolio of tracker funds direct is likely to prove a much more cost-effective option.

The savings via us

Based on a portfolio of £500,000 we would expect our clients to pay around £1,000 a year more than they would pay with Nutmeg. However, we provide a far more comprehensive financial planning service and the portfolios would also include actively managed funds.

https://www.nutmeg.com/our-fee

Vanguard

Another welcome new entrant to financial planning is Vanguard, albeit the service is currently limited. To receive advice you'll already need to have £50,000 invested with Vanguard and they don't advise on other investments you may already have, hence cannot, for example, advise on ISA or pension transfers. You'll also need to be at least five or more years away from retirement.

How much does Vanguard charge?

Overall costs come in at 0.79% a year thanks to the use of low-cost trackers, although Vanguard’s financial planning fee is actually 0.5% a year. Advice is restricted to Vanguard’s own products and a dedicated adviser relationship is only available to those investing £750,000 or more.

The savings via us

At £750,000 our clients would expect to pay overall charges very similar to Vanguard (probably a few hundred pounds more) but, as with Nutmeg, our clients would be receiving a far more comprehensive financial planning service and the portfolios would also include actively managed funds. If we too restricted our portfolio to tracker funds our service would cost around £1,400 less a year versus Vanguard at this level.

https://www.vanguardinvestor.co.uk/financial-advice