How much the advice will cost 

How much does financial advice cost?

The cost of financial advice depends on the type of advice you receive and how your adviser is paid. Advisers may be paid through commission from financial service providers, fees you pay directly or a combination of both. Commission can include a once‑off payment when you take out a product or ongoing charges linked to the value of your investment.

Fees may include ongoing fund management or administration charges, performance‑based fees if an investment makes a profit, or penalties for cashing in an investment early. Before agreeing to any advice, your adviser must give you a clear, written breakdown of all charges so you understand what you are paying for and can compare your options.

How do financial advisers get paid?

Commission

If a financial adviser gets paid or earns a bonus from the company whose products they sell, this is usually called one of two types of commission:

• Standard commission. A percentage of your investment paid as a lump sum to your adviser when you first buy a financial product
• Fund-based trail commission. A yearly percentage of the overall value of your fund, sometimes called trail commission

Fees

In some cases, the adviser will receive a combination of both commission and fees. If you pay the financial adviser directly, fees can include:

• Fund management or administration charges. Annual charges for administering your fund, maintaining records, calculating fund value and providing ongoing advice. These fees apply regardless of fund performance.
• Performance fees. Fees you may pay if your investment makes a certain profit. A performance fee can be calculated in many ways, but the most common is as a percentage of the investment profit made.
• Early encashment fee. A penalty you may pay if you cash in your savings or investments before they mature.

More information on investment fees and charges.

What should you ask about costs before getting financial advice?

The type of advice you get will determine whether you pay a fee, a commission or both.

• Ask your adviser to explain what you are paying for.
• If you are getting investment advice, ask if the costs include a review of your investments or if you must pay for that service separately.
• Before you avail of financial advice, you must be given a document listing all charges in a way that is easy to understand.