Financial Adviser Fees Guide — What to Expect in Australia

Financial advice fees can vary significantly between advisers, and the total cost over time can be substantial. Understanding fee structures helps you:

• Compare advisers on a like-for-like basis
• Budget for the cost of advice
• Assess whether ongoing fees are justified by the services received
• Avoid surprises in your financial planning costs

All fees must be disclosed in the Financial Services Guide (FSG) before you engage an adviser, and detailed in the Statement of Advice (SOA) before any advice is implemented.

Initial consultation fee: Many advisers offer a free or low-cost first meeting to understand your needs and explain their services. This is your chance to assess the adviser before committing.

Statement of Advice (SOA) fee: The cost of preparing a comprehensive or single-issue financial plan. This is often the largest upfront cost and reflects the research, analysis, and documentation required.

Implementation fee: Some advisers charge separately for implementing the recommendations in your SOA — for example, setting up investment accounts, transferring super, or arranging insurance.

Ongoing advice fee: A regular fee (monthly, quarterly, or annual) for ongoing portfolio monitoring, regular reviews, and access to your adviser for questions.

Ad-hoc advice fee: Hourly or fixed fees for one-off questions or reviews outside your regular advice arrangement.

Based on industry data, here are typical fee ranges:

Fees vary based on the complexity of your situation, the adviser's experience, and your location. Metropolitan advisers may charge more than regional ones, but telehealth options can help bridge the gap.

The two most common ongoing fee models are:

• Percentage of assets under management (AUM):**
• Typically 0.5% to 1.5% of your portfolio value per year
• Fee grows as your portfolio grows
• Can become very expensive for large portfolios
• Example: 1% on a $500,000 portfolio = $5,000/year; on a $2 million portfolio = $20,000/year

• Flat annual fee:**
• A fixed dollar amount regardless of portfolio size
• More predictable and transparent
• May not account for the extra complexity of larger portfolios
• Example: $4,000/year whether your portfolio is $200,000 or $2 million

Which is better? For smaller portfolios, percentage-based fees may be lower. For larger portfolios, flat fees usually provide better value. Always calculate the dollar amount you'll pay, not just the percentage.

Under the FoFA reforms, advisers must obtain your consent to continue charging ongoing fees. Here is how it works:

• Every two years, your adviser must send you a fee disclosure statement showing what you've been charged and what services you received
• You must actively opt in (agree in writing) to continue the arrangement
• If you don't opt in, the adviser must stop charging ongoing fees
• You can terminate ongoing fee arrangements at any time

This requirement protects you from paying for services you are not using. Review your fee disclosure statement carefully each time — it is a good opportunity to assess whether you are getting value for money.

Beyond the adviser's direct fees, be aware of:

• Platform fees: If your adviser uses an investment platform or wrap account, there will be administration fees (typically 0.2% - 0.6% per annum)
• Investment management fees: Managed funds charge their own fees (MER/ICR), typically 0.5% - 2% per annum
• Insurance premiums: If your adviser arranges insurance, the premiums are a separate cost (though the adviser may earn a commission from these)
• Transaction costs: Brokerage fees for buying/selling investments
• Switching costs: Fees or taxes when changing investments or super funds

Ask your adviser to provide a total cost of ownership estimate, including all direct and indirect costs. This gives you the true picture of what you are paying.

To get the best value from financial advice:

• Shop around — compare at least two or three advisers before committing
• Ask about fee options — some advisers offer different fee models for different services
• Start with single-issue advice if you have a specific question — it is cheaper than comprehensive planning
• Review ongoing fees annually — are you getting value for what you pay?
• Use the opt-in process — it is designed to protect you, so engage with it
• Consider your portfolio size — if your portfolio grows, reassess whether percentage fees still make sense vs a flat fee
• Ask about group or couple rates — some advisers offer discounts for couples planning together
• Check if your super fund offers advice — many industry super funds provide limited advice to members at low or no cost