A Buyer’s Guide to Financial Advice
The nine chapters
Chapter 1. What does financial advice really cost?
Most people go into fee conversations blind. This chapter gives you enough context to judge whether any adviser, including this one, is fair value.
The advice fee is only one of five layers you pay. Most people compare the one they are shown and miss the four they are not.
The three things you are buying
The five layers of cost
An honest pricing conversation accounts for all five, not just the first.
| Layer | What it pays for | Typical range |
|---|---|---|
| Advice fee | Planning, recommendations, ongoing service | Fixed, or 0.5–1.0% a year |
| Platform fee | Custody, administration, reporting | 0.10–0.45% a year |
| Investment management | Fund selection, buying, selling, risk | 0.20–0.50% a year |
| Fund costs | Ongoing charges of the funds held | 0.07–0.20% passive 0.50–1.00%+ active |
| Transaction costs | Trading inside those funds | Varies by fund |
Most clients investing through an adviser pay between 1.2% and 2.5% of their portfolio a year, all in.
Percentage or fixed? There is a crossover point
Around 70% of UK advisers charge a percentage of assets. The arithmetic cuts both ways.
| Portfolio | 1% a year | £6,000 fixed fee | Over 20 years |
|---|---|---|---|
| £1,000,000 | £10,000 | £6,000 | £200,000 vs £120,000, so fixed wins |
| £300,000 | £3,000 | £6,000 | The fixed fee costs twice as much |
Percentage charging is generally cheaper below a crossover point and dearer above it. The only way to know which side you are on is to ask for both, in pounds, at your own numbers.
Xentum charges fixed fees. Weigh this section against that interest.
+What makes advice more expensive
- Complexity. Multiple pensions, a business interest, property, inheritance, or a spouse in a different position.
- Quality of planning. Modelling and stress-testing takes far longer than a surface review.
- Depth of ongoing service. Proactive review and coordination beats an annual call.
- Experience and specialism. Chartered status signals a commitment not every firm makes.
- Regulatory rigour. Every recommendation documented, evidenced, defensible.
+What keeps the cost down
- Simpler financial lives genuinely mean less work
- Fewer moving parts mean lighter reviews
- Doing your own legwork can reduce adviser time
- Good systems carry lower overhead
+Why some advisers are more expensive
Some genuinely deliver more. Some carry a brand premium, so you are partly paying for the brand rather than the advice. Some offer complex structures worth paying for only where they solve a problem you actually have.
And some are dearer because of how they charge, not what they deliver. At scale, a percentage of assets can produce fees with little relationship to the work. The counter-argument is equally real: the same model means a £200,000 client pays a tenth of what a £2m client pays for the same process, and that cross-subsidy is part of how smaller clients get advice at all.
+What does not show up in a headline quote
- Initial charges on top-ups
- Ad hoc advice fees outside the review cycle
- Pension transfer exit penalties from the old provider
- Protection advice charged separately
+Who else is involved, and what they cost
Four distinct roles exist, each with a separate cost.
- Adviser or planner, working for you. £1,500–£4,000 one-off, then £2,000–£10,000+ a year, or 0.5–1.0%
- Custodian or platform, holding investments. 0.15–0.40% a year, often capped
- Investment manager, deciding how money is invested. 0.25–1.0% a year
- Fund manager, running the fund. 0.05–0.75%, inside the fund price
One company can play more than one role. That is where duplicated charges hide.
The mistake is evaluating advice fees in isolation, rather than against the value they are designed to create.
Sources: Financial Conduct Authority; NextWealth Fee Benchmarking Report 2026; VouchedFor via Which?, September 2025.
Chapter 2. What level of advice do you actually need?
The right level depends less on how much money you have than on how complex your situation is and how much support you want.
Choosing the wrong scope, either too small or too large, costs you either way. The goal is not the cheapest scope or the fullest one. It is the right one.
Two questions worth sitting with: How many moving parts do I have? And how confident do I feel managing them myself?
The four levels
+Level 0: what it can and cannot do
These tools let you open accounts, pick funds directly, select a risk level, and automate saving.
They cannot tell you how to align money with long-term goals, which tax wrappers to prioritise, how to handle pensions, property, business equity or family wealth, or how to adjust during market stress.
For someone starting out that is perfectly adequate. For others it leaves major blind spots.
+Level 1: best for, and limits
Best for very simple needs, occasional one-off input, clarity on a single decision.
Limits: does not address long-term goals, does not consider knock-on effects, no ongoing partnership. The equivalent of calling a gardener to trim one hedge.
+Level 2: typically covers
Retirement planning, investment strategy and risk, basic tax planning, protection needs, an annual review, light-touch cashflow modelling.
Limits: long-term goals and family priorities may not be deeply explored; cashflow modelling may be simplified; behavioural coaching is usually minimal.
+Level 3: typically includes
Goals and values, detailed long-term cashflow modelling, tax strategy, family and intergenerational planning, estate and legacy design, business-owner planning, investment strategy built around the plan, behavioural coaching, and coordination with accountants and solicitors.
Limits: more time and reflection upfront; unnecessary for very simple situations.
Reviews affect how firms rank in search, so a firm with many will appear higher. That is a fact about search, not about the advice. Read them for content rather than count. A handful describing situations like yours tells you more than a large number saying the adviser was friendly. Neither score nor volume tells you which scope you would be buying. Ask that directly.
Complexity and confidence set the level, not the size of your portfolio.
Chapter 3. Which type of advice is right for you?
Something most consumers never hear: no adviser type sits neutrally above both property and investment decisions.
Property specialists recommend property. Financial advisers recommend portfolios. The comparison most people actually need has no natural owner, because the incentives on both sides point away from it.
Property against portfolio
| Criterion | Property | Portfolio |
|---|---|---|
| Liquidity | Slow to sell; high transaction costs | Very quick; low transaction costs |
| Diversification | Concentrated unless you hold several | Easily diversified across assets and regions |
| Leverage | Strong mortgage leverage, amplifying returns and risk | Limited; controlled risk |
| Upfront costs | High: deposit, stamp duty, legal, refurbishment | Low entry threshold |
| Ongoing costs | Maintenance, repairs, insurance, voids, management | Low, predictable fund and platform fees |
| Control | High: you choose property, tenants, improvements | Low: delegated to managers |
| Time and effort | Hands-on unless fully managed | Minimal once set up |
| Tax treatment | Some advantages remain; others tightened | Strong long-term advantages via ISAs and pensions |
| Estate planning | Harder to divide; liquidity issues on death | Easy to allocate or transfer |
These are structural characteristics, not a verdict. Neither is better.
What each advice type can actually deliver
| Advice type | Level 1 | Level 2 | Level 3 |
|---|---|---|---|
| DIY investing | No | No | No |
| Robo-advice | Partly | No | No |
| Restricted advice | Yes | Yes | Sometimes |
| Independent advice | Yes | Yes | Sometimes |
Full financial planning is a scope, not a badge.
Those two sometimes entries are the most important thing here. Independence gives maximum product choice, but many independent advisers are still primarily investment advisers. Equally, some restricted firms deliver excellent full planning within a narrower range.
If you are considering DIY or robo, know about the behaviour gap, the difference between what a fund returns and what investors actually receive. Morningstar puts it at roughly 1% to 2% a year, caused by buying after markets rise and selling when they fall. Over 20 years, even a 1.5% gap can reduce total wealth by more than 30%. Markets usually work. Staying invested is the hard part.
Ask what a firm’s process delivers, not what its label says.
Chapter 4. Is your financial setup ready for advice?
Your current setup influences both the type of advice you need and how effectively it can be delivered. Some situations are ready. Others need groundwork first.
You can be ready for a conversation but not yet ready for advice. Turning up with missing paperwork costs you money in investigative time.
Five things that shape it
A quick readiness check
Tick the ones that are true today.
The cheapest hour you will ever spend on advice is the one before the first meeting.
Chapter 5. What goes into a financial plan
Financial advice is not a single product. It is a combination of components: some essential, some optional, some dependent on your stage of life.
Your plan should include only the components that genuinely support your life. Nothing more, and nothing less. If you are paying for something, you should be able to say why.
The three core components
Everything below is situational. Expand only what applies to you.
+Retirement planning
Depends on life stage. Predicting spending needs, drawing income sustainably, choosing between lump sums, flexible drawdown and annuities, managing sequencing risk, minimising tax drag.
+Protection planning
Optional, but it is the base of the pyramid. Everything else sits on top. Life cover, income protection, critical illness, business continuity. Not everyone needs these, but for families reliant on one or two incomes it prevents serious strain.
+Property strategy
Optional, but often essential. Hold or sell, downsize or upsize; buy-to-let viability and leverage; liquidity. Most people’s wealth involves property, yet traditional investment advisers do not sit above both worlds.
+Business-owner planning
Specialist. Exit strategy, remuneration, shareholder arrangements, post-exit structure. Requires close coordination between advisers and accountants.
+Estate and intergenerational planning
Increasingly important with age and complexity. Wills and structure, inheritance tax and gifting, family investment decisions.
+Ongoing review and behavioural support
For many, where the long-term value sits. Keeping you accountable and the plan relevant, maintaining discipline during volatility, adjusting to life changes.
+Additional services
Scenario stress-testing, education sessions for children, family meetings, coordination with accountants and solicitors. Not everyone needs these, but they can improve clarity.
A good plan is scoped to your life, not padded to justify a fee and not thinned to hit a price.
Chapter 6. How good advice is delivered
Whichever advice type you choose, good advice follows a structured, transparent process. The depth changes with the scope, but the stages are the same.
Use these nine stages as an interview script. Ask a firm to walk you through their process from first meeting to first review, and count how many they can describe without notes.
Judge a firm by the quality of its process, not the confidence of its pitch.
Chapter 7. How advisers add value, and where they don’t
People look for advice because they want better returns, less stress, fewer mistakes or clearer decisions. But not all value is obvious, and not all value is delivered by every adviser.
Adviser value is not investment performance. It is behaviour, tax efficiency, structure and discipline, and the evidence is strongest where the relationship is ongoing.
The headline numbers
+The wealth impact over time
ILC–Royal London tracked real UK households over a decade. Those advised between 2001 and 2006 were on average £47,706 wealthier by 2014/16: £31,000 more in pension wealth, £16,000 more elsewhere.
The proportionate impact was greater for people of more modest means: a 35% uplift for the non-affluent group against 24% for the affluent.
Most strikingly, those who maintained an ongoing relationship had pension pots 50% higher than those who took advice only once. A single conversation did not create that gap. A sustained relationship did.
+The gap between fund returns and investor returns
Morningstar’s 2025 Mind the Gap found that over the decade to December 2024 the average investor earned 7.0% a year, around 1.2 percentage points less than their funds’ 8.2%. Not because they chose bad funds, but because they moved in and out at the wrong times.
+The Vanguard framework
Advisers following best practice can add up to, or exceed, 3% net annually, through measurable behaviours rather than performance. Lower-cost funds add 0–100 basis points. Tax-efficient asset location up to 45. A structured withdrawal strategy up to 112 or more. Behavioural coaching alone can add up to 200 basis points, and more in acute stress.
+The wellbeing evidence
63% v 48%: advised people who felt financially secure, against those who never took advice (Royal London, 4,000+ customers).
44% v 10%: people combining healthy finances with a positive money mindset, ongoing adviser relationship against none (Aegon, 10,000+ adults).
Advised clients rated 82% satisfied with quality of advice, 81% communication, 81% trustworthiness. Asked why they use a planner, more than half say the primary benefit is peace of mind.
An investor who stayed invested through 2020 earned 62%. One who moved to cash at the March bottom and reinvested in July earned 37%.
On a £500,000 portfolio, that 25 point gap is £125,000, more than fifteen years of an £8,000 annual advice fee, lost or preserved in a single decision.
The percentage gap is the same for every investor. The pound value is not. On £20,000, a 1.2% improvement is £240 a year. On £1.5 million it is £18,000. This is not an argument that smaller portfolios do not deserve good advice. They do. It is an honest observation about why some of an adviser’s value is genuinely proportional to the sum involved.
Five claims worth questioning
+“We can consistently beat the market.”
There is no evidence retail advisers repeatedly outperform. This is the one claim here that is a regulatory matter rather than judgement: FCA rules require a financial promotion to be fair, clear and not misleading, and a promise of consistent outperformance is none of the three.
+“Our portfolios are unique.”
Most advisers use variations of the same evidence-based principles. The real differentiator is process, planning and behaviour support, not portfolio design.
+“We can predict what the market will do next.”
Short-term prediction is statistically impossible. Good advisers focus on discipline, not forecasts.
+“Our fees pay for superior performance.”
Fees should align with complexity, service and planning depth, not performance claims nobody can guarantee.
+“We cover everything.”
Advisers cannot legally write wills, draft trusts, give detailed tax advice or manage property portfolios. A good adviser is honest about the limit of their competence and introduces specialists.
None of this means every adviser adds 3%, or that every client ends up £47,706 wealthier. Vanguard is explicit that advisers can add value if they follow the techniques shown to work. A reactive adviser doing minimal planning adds considerably less. The question is not whether advice is worth it in general. It is whether the specific adviser you are considering will create more value than they cost, at your complexity, over your horizon. And one disclosure: Xentum sells ongoing full financial planning, which is precisely the service this chapter’s evidence supports. We did not commission any of that research, but we do have an interest in you finding it persuasive.
That disclosure is not incidental. Before publishing, we put the final draft through a deliberately hostile review, asking where the text showed bias toward our own service and our own way of charging, and what an unbiased alternative would say. Several sections were rewritten as a result, including parts of this one. We mention it because you should assume a firm’s own guide is partial unless it can show what it did about that.
Advisers earn their fee through behaviour, tax and structure, not by picking better investments.
Sources: ILC–Royal London What It’s Worth 2019; Morningstar Mind the Gap 2025; Vanguard Adviser’s Alpha UK June 2025; Royal London; Aegon Financial Wellbeing Index; MacDonald et al., Accounting & Finance 2023. All published and freely findable. We would rather you checked them than took our word for it.
Chapter 8. Common mistakes when starting out
Before you even get to choosing an adviser, there are mistakes that make the process slower, more stressful and more expensive than it needs to be.
Every one of these is yours to fix, for free, before you hire anyone.
| Mistake | Do instead | |
|---|---|---|
| 01 | Starting without clear goals | Reflect on what you want your future to look like. Do not expect an adviser to define your goals for you |
| 02 | Focusing on products instead of outcomes | Start with priorities and strategy. Products are tools |
| 03 | Underestimating accurate information | Gather complete, current records before the process begins |
| 04 | Expecting the plan to be a one-off event | View planning as ongoing maintenance |
| 05 | Assuming complexity means more products | Aim for clear, coherent structures. Simplicity usually improves outcomes |
| 06 | Unrealistic expectations about timing | Allow time for proper analysis and thoughtful recommendations |
| 07 | Not considering the full picture | Include property, mortgages, business interests, cash and tax exposure |
| 08 | Ignoring emotional factors | Be open about your behaviours, fears and preferences |
| 09 | Assuming every problem has a technical fix | Use planning to explore choices, not just numbers |
| 10 | Treating planning as separate from life | See it as a framework supporting decisions across the whole picture |
If one does not know to which port one is sailing, no wind is favourable.
The most expensive mistakes happen before you hire anyone.
Chapter 9. Finding the right guide
A financial adviser is someone you trust with decisions that affect your children, your future stability and your long-term wellbeing.
Almost everyone has had to choose an expert they could not judge on technical grounds. The clearest example is a surgeon, and you would not choose the most reassuring one. You would choose the most straightforward.
Seven things the right adviser does
Trust doesn’t come from confidence. It comes from clarity, competence and honesty.
Ten questions to ask any financial adviser
Put these to every firm you meet, this one included, and compare the answers written down.
Whoever you choose, including if that is nobody and you do it yourself, choose deliberately.
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Free, and no email required. This guide is general information, not personal advice. The value of investments can fall as well as rise and you may get back less than you invested.