How much does financial advice cost?

One of the barriers to more people seeking financial advice could be the lack of public disclosure and transparency around fees. Unfortunately, there is no single place you can go to find out what financial advisers in your area charge or average fees for various services on offer.

The figures that do exist are patchy and depend on the type and number of financial advisers surveyed.

According to the Investment Trends 2024 Adviser Business Model Report, the average amount advisers charged their most recent client for simple advice was $2,500 upfront/one-off and $3,500 for ongoing advice. For comprehensive advice, the average cost was $4,400 upfront/one-off and $5,800 ongoing.

These findings, from a limited survey of advisers (513 offering comprehensive advice and 87 offering simple advice) in June 2024, are set out in the table below.

Table 1: Fee and fee structure charged by the most recent new client

Type of advice	Average upfront fee	Average ongoing fee	Average FUA*	Median FUA*
Comprehensive	$4,400	$5,800	$1.1 million	$790,000
Simple/scaled	$2,500	$3,500	$660,000	$470,000

* FUA (funds under advice)

Source: Investment Trends 2024 Adviser Business Model Report

It is interesting to note that clients seeking more limited advice typically have less significantly lower assets. Conversely, higher net-worth clients were more likely to seek comprehensive advice. It is also worth noting that most of the advisers in this survey charged fixed dollar fees rather than a percentage of assets.

Unfortunately, these and other industry fee surveys confirm that the cost of advice is on the rise. In its 2024 Australian Financial Advice Landscape report, Adviser Ratings found the median adviser fee had increased 58% in the five years to 2023 and fees continue to rise.

There is also a growing disconnect between fees for comprehensive advice and what consumers are willing to pay. The Investment Trends 2024 Australian Financial Advice Report found that more than 50% of those with unmet advice needs who plan to use a financial adviser would prefer one-off, issue-specific advice.

The Adviser Ratings report found the top two advice needs cited by consumers using their platform were building super (45%) and preparation for retirement (39%). But the most they said they could afford or were willing to pay was $911 on average, falling to $553 for those without an adviser. Yet only 6% of advisers have fees for new clients under $1,500.

But as Investment Trends points out, the growing demand for one-off, issue-specific advice aligns with the Quality of Advice Review (QAR) recommendations to ensure Australians have access to high-quality, accessible and affordable financial advice.

In response to the QAR, the Albanese government pledged to improve the affordability and accessibility of financial advice via its Delivering Better Financial Outcomes legislation, by cutting red tape and paving the way for a new class of adviser able to offer simple advice. At the time of writing, only some of these reforms have passed into law.

“Once legislation is finalised, this will benefit all Australians,” says Investment Trends research director, Olivia Beringer. “Our data highlights a clear opportunity to inject greater flexibility into the industry, enabling organisations to offer targeted services that directly address consumer concerns.”

Financial advice from super funds

For many people these days, super is their biggest – and sometimes only – financial asset outside their family home. Which is why their super fund is often the first place they turn to for financial advice.

For their part, super funds are learning that one way to attract and keep members is to offer free or low-cost advice services, but keeping costs down for comprehensive, personal advice remains a challenge.

There’s also widespread confusion about the different types of financial advice on offer. ASIC research found many consumers believe, falsely, that general financial advice prioritised their financial interests.

The advice currently being offered by super funds is scaled, with three broad categories:

• General advice: Free information on specific topics related to your account or the fund’s offerings, generally offered over the phone or online. As the name suggests, advice is general and cannot include personal advice or recommendations.
• Single issue advice: Simple personal advice on a single issue. It generally begins with a free, no-obligation phone consultation, followed by a Statement of Advice with recommendations for a fee.
• Comprehensive advice: More complex financial advice that takes your full personal circumstances into account. Advice is provided by Certified Financial Planners either inside or outside the fund. Often, face-to-face advice also starts with a free, no-obligation conversation with information about fees if you choose to proceed.

And the cost?

Chant West general manager Ian Fryer says the average comprehensive advice fee “generally ranges from $2,500 to $4,300 with the range partially reflecting the depth of advice delivered in some funds compared with others”.

While this is lower than the industry average (in the table above), Fryer says this may be because super funds provide less comprehensive advice and are simply covering costs.

Some funds subsidise financial advice, whether it is offered by the fund’s in-house advisers or external advisers aligned with the fund’s values.

If you are considering getting financial advice and are a member of a large super fund, it may be worth contacting them for a quote.  

A role for technology

While consumers wait for readily available, affordable advice, technology is already stepping into the breach. Super funds are investing heavily in their mobile platforms, digital solutions and interactive calculators and other tools.

The less complex needs of younger investors, and their preference for online interaction, means they are often more open to digital solutions. Even so, Adviser Ratings found less than one-third of Australians have adopted digital solutions for investing, managing or trading money, but the intention to do so is rising annually.

How to find out what fees you will be charged

Whether you are considering getting simple or comprehensive financial advice from your super fund or an independent adviser close to your home or work, the only sure way to find out what advisers charge is to make an appointment.

Financial Services Guide (FSG)

This document should be given to you when you first meet with a financial adviser. It must include information about how they will be paid for advice they provide.

Statement of Advice (SOA)

This is a document that a financial adviser must give you when providing advice. It must outline any payments or benefits they will receive if you decide to accept their advice.

Product Disclosure Statement (PDS)

An adviser who recommends a specific financial product to you must give you the PDS before you commit to it. The PDS must outline any associated fees.

Annual Fee Disclosure Statement

An adviser must provide you with this document if you agree to an ongoing arrangement with them. This document must outline:

• The fees you were charged by the adviser or planner over the last 12 months
• The services you received
• The services you were entitled to receive.

An adviser must formally renew any ongoing advice agreements with you every two years. You can terminate the agreement at any time.

Tips to help you get value for money

1. Do your research

This is crucial, whether you are seeking advice from your super fund or independent advice. Look for referrals and testimonials from people you trust and create a shortlist of potential advisers. Most will offer a free initial consultation, so take advantage of that opportunity to ask questions.

An adviser should:

• Be able to clearly explain and demonstrate their track record, their credentials and the quality of the services on offer
• Ask you lots of questions to help them understand your financial needs
• Clearly outline their fees both verbally and by providing you with their FSG.

While cost is important, it’s not the only factor. Look for an adviser you feel you can trust and who ‘speaks your language’.

2. Negotiate

The financial advice industry is highly competitive. While negotiation may not be possible in all situations, clients with substantial assets are highly prized, so make sure you are getting value for money.

3. Tax deductions

Financial advice is tax deductible only if the advice is directly associated with producing assessable income. Examples include fees for:

• Actively advising on/managing an investment portfolio that generates assessable client income
• Actively advising on/managing an SMSF portfolio that generates assessable income.

The following expenses are not tax deductible:

• Consultation fees
• Fees for preparing a financial plan
• Fees for preparing a statement of advice.

4. Check your fee statements

Things have improved since the Financial Services Royal Commission uncovered cases of advisers charging clients fees for no service. Even so, it still pays to be vigilant in checking the fee disclosure statements that financial advisers are legally required to provide if you have an ongoing agreement with them. Make sure you’re getting what you’re being charged for!

The bottom line

Whether you are building wealth, wanting to make the most of an inheritance or planning your retirement income, the financial decisions you make can have important implications for your wealth and wellbeing. With so much at stake, it’s wise to seek professional financial advice to achieve your goals. If you do, take sensible steps to make sure you get the advice you need, when you need it, for a competitive price.