Investing can feel scary for a lot of people. The risk of losing your money is worrying, which is why it’s important to get financial advice before you make any investments. But how much does it cost?

In this guide, we’ll go through how much financial advisors charge for investment advice and whether it’s worth it, plus we’ll answer some of our readers’ frequently asked questions about investment advice.

How much does investment advice cost?

Investment advice is usually charged based on the amount of money you want to invest. These fees can range between 1-4% of the value of your investment. Usually, the larger the amount you want to invest, the lower the percentage fee.

If you want ongoing advice on your investment, a financial advisor may charge a fixed fee or between 0.5-2% of the value of your investment per year.

For example, if you wanted advice on investing £25,000, expect to pay between £250-£1,000 for initial advice. You’d then pay 0.5-2% of the value of your investment for ongoing yearly management – hopefully your investment has grown, but it could also make losses.

Are investment advisory fees worth it?

Most people agree that investment advisory fees are worth it unless you’re extremely experienced. Understanding a changing market and getting to grips with all the different funds, terminology and risk factors is tricky, so leaning on a financial advisor for help can ensure that you make the best decisions for your financial situation.

Some studies say that seeking financial advice on investments can increase returns by up to 3%, although this will of course vary. You certainly have more chance of your investments being successful if you take advice from a qualified independent financial advisor.

Will a financial advisor tell me what to invest in?

A financial advisor will give you recommendations on what to invest in based on your financial situation, your attitude to risk and any specific requests you have, such as investing in ethical funds. They base their decisions on what you tell them about your financial situation after doing a thorough assessment of your finances, so it’s important to give them all the information you can and avoid trying to hide anything from them.

Should I invest on my own or use a financial advisor?

Unless you are very experienced in investing, it’s better to use a financial advisor. When you use a qualified independent financial advisor, the recommendations they make are regulated. That means that if you end up with an unsuitable product or think you were mis-sold, you can complain to the Financial Ombudsman Service. However, if you invest on your own using information from online sources or family and friends, you have no protection if things go wrong.

You could always see a financial advisor for initial advice then make some decisions on your own if you feel confident. You never have to go with your financial advisor’s advice, but if you’re serious about investing and seeing returns, it makes sense to follow their recommendations.

Do financial advisors make money off your investments?

Good financial advisors shouldn’t be making any money directly off your investments. However, many financial advisors are also brokers for certain companies, meaning they will earn a commission if you take out one of these company’s financial products.

Independent financial advisors (IFAs) are regulated by the Financial Conduct Authority and have strict rules to follow. They should only ever be able to manage your money – not withdraw or transfer your investments without your expressed permission.

Should you put all your money with one financial advisor?

It’s up to you whether you use one financial advisor to manage your funds and investments. If you’re new to investing or are only making a small investment, one financial advisor is probably enough. However, if you want to diversify your investment profile and you have a sizeable amount of money to invest, there are benefits to using more than one financial advisor:

• Get more than one opinion and perspective on how to achieve your financial goals

• Different advisors can focus on different parts of your investments

• If you use a robo-advisor for some investments, you may save money on management fees

• Different advisors may have access to different financial products

If you’re ready to start investing, HaMuch can help. Find a financial advisor in your area now to help you invest your money in the right way for your financial situation.

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