Is a 0.75% financial adviser fee expensive?

Put the rate in context

0.75% is £1,500 on £200,000 and £3,750 on £500,000. Ask for the actual amount after tiers, minimums and any cap. Confirm whether the figure is inclusive of VAT and whether the fee is taken from the portfolio.

If the charge applies to a pension or investment portfolio, list the other layers underneath it. The total is the number that affects your outcome.

• Which assets are coveredClarify which accounts are in the calculation and whether cash is treated differently.
• What the fee coversClarify whether implementation, tax coordination or extra meetings cost more.

Compare the responsibility transferred

An ongoing adviser may coordinate retirement income, family decisions and investment risk; another may provide a brief annual review. Ask who is accountable for monitoring and what triggers action.

A fee can be poor value even when the rate looks ‘normal’ if the service is dormant. A higher fee can be defensible only when the extra work is real, relevant and understood.

• RequestA sample annual timetable and an example of a change that would prompt extra work.
• ReviewWhether the service still matches your life as goals and assets change.

Make a measured choice

Compare at least one alternative structure, then decide whether the difference in scope matters to you. Do not select a firm solely because it quotes a particular percentage.

Use a like-for-like comparison at 0.75%

Start by writing the 0.75% charge as an annual pound figure at your balance. Repeat it for a future balance and ask whether tiering, caps or minimums change the answer. This is the amount to compare, not the percentage in isolation.

Then create a service grid. Put meetings, investment oversight, cash-flow work, retirement modelling, access between reviews and implementation on the rows. Mark what the firm includes, what it excludes and what costs extra.

Ask another firm to complete the same grid. If one firm offers fewer rows at a lower rate, you can decide whether those omissions matter. If the rows are similar, the total cost and quality of the explanations become more important.

Consider a client whose pension is stable today but who expects to stop work in two years. The service may need to change as retirement approaches. Ask whether the proposed fee includes that transition or whether a new project fee will be added.

A fee is easier to review when the promise is specific. Save the service schedule, note the review date and ask questions when the work no longer resembles what you agreed.

• PoundsWhat does 0.75% cost now, after minimums, tiers and VAT treatment?
• RowsWhich planning and investment responsibilities are definitely included?
• ExtrasWhat common changes or requests generate a separate charge?
• TransitionHow will the service respond to retirement or another major life change?
• ReviewWhat evidence will show that the ongoing service remains useful?

Your 0.75% comparison record

Write the annual cash charge at your actual balance and at a possible future balance. Record tiering, minimums, caps and whether the fee applies to assets the adviser does not actively manage.

Build a service grid covering planning, investment oversight, retirement work, meetings, access and implementation. Ask another firm to answer the same rows so a lower price cannot simply hide missing work.

Ask how the service changes when retirement approaches or a large withdrawal is needed. A fee can be reasonable for stable portfolio oversight but not for the broader planning you assumed it included.

Save the grid and set a review date. If the work becomes lighter or your needs become more complex, ask whether a different structure is more proportionate.

• MathsWhat is 0.75% in pounds now?
• RowsWhich responsibilities are definitely included?
• ExtrasWhat common requests cost more?
• TransitionHow is retirement handled?
• EvidenceWhat will show ongoing value?

Turn 0.75% into a comparable proposal

Calculate 0.75% against the assets that will actually be charged, not simply total household wealth. Then ask for minimums, tiering and caps. The same advertised rate can produce a different effective percentage when only part of the portfolio is advised or when the firm applies a minimum cash fee.

Put the recurring work into rows: planning updates, investment review, pension work, meetings, access between reviews and implementation of agreed changes. Ask each firm to mark included, excluded or separately charged. This makes a cheaper but narrower service visible before you compare price.

Create a quiet-year and change-year example. In the quiet year, identify the evidence you receive that the plan remains suitable. In the change year, ask who handles retirement, a withdrawal or a family decision and whether that work costs more. Ongoing value should be described as actions and responsibilities.

Keep the proposal and revisit it after the first full service year. Compare what was promised with what occurred, then decide whether the percentage remains proportionate, a lighter service would suffice or additional specialist work is needed.

If two firms use different charging structures, compare them at the same asset value and over the same period. A fixed initial fee plus a lower ongoing rate can overtake a no-initial-fee percentage at a different point, so show the cumulative pounds rather than choosing from the first-year headline alone.

Ask how withdrawals affect the charge. A percentage fee may fall with the asset base, while a cash minimum may keep it unchanged. That distinction is especially relevant where the portfolio is expected to fund retirement income.

Do the same exercise for growth. If assets rise but the work remains similar, quantify how much the cash fee increases and ask whether tiering or a cap applies. This keeps the conversation about future value as well as today’s quote.

Compare an actual year of work

Ask the firm to describe the previous or proposed year's service in concrete terms: review, updated plan, withdrawal decisions, contribution work and access between meetings. Match that description to your needs before comparing the rate with another firm's offer.

On an unchanged £400,000, a fictional 0.75% annual adviser charge is £3,000. If the assets fall to £320,000, the simple calculation becomes £2,400; if the firm applies a minimum or a different valuation method, the actual bill can differ. Ask for the method rather than assuming every statement uses the year-end value.

A fixed £3,000 annual service might initially cost the same but behave differently as assets change. It may also include different work. Compare both at your current balance and a plausible lower balance if you expect withdrawals, keeping the exercise illustrative rather than a market forecast.

The decision should rest on the service, total cost and alternatives. A rate that appears moderate within a set of quotes can still buy work you do not need, while a useful specialist service can deserve consideration even when its price is not the lowest.

Your decision checklist

• Calculate the cash fee and total cost
• Check the service calendar
• Ask about additional fees and responsibility
• Compare a different charging structure

When you may need personal advice

There is no official ‘fair’ percentage for every client. This guide supports questions, not a price verdict.