Platforum: The truth behind what clients will pay for advice


One of the biggest opportunities for advisers is offering retirement advice. But many advisers have found it difficult to profitably offer advice to any but the wealthiest of clients.

New research from Platforum reveals investors are willing to pay an average of £800 as a one-off fee for advice when faced with a major financial planning event. They are also willing to pay 0.49 per cent on an ongoing basis for advice on a pension pot.

We calculated the average one-off fee using the Van-Westendorp pricing methodology. We presented active private investors with a scenario based on a one-off fee for a major financial planning event. We then asked them the point at which advice becomes too expensive to consider using and the point at which the fee would be so low as to raise doubts about the quality of the service.

This methodology allows us to identify a price point at which an adviser will not lose too many clients because fees are too high but equally, that the fee is not too low so that clients question the quality of the advice. This is called the “optimum price point” and is the point at which the two lines intersect.


You can see the optimum price point for a one-off fee is £800. At Platforum, we were heartened with this result because it is getting closer to the initial fees that advisers charge and flies in the face of claims that investors are not willing to pay a fair price for advice.

Interestingly, the results did not change by portfolio size. Investors with a portfolio size of over £200,000 were willing to pay only as much as those with less than £200,000.

Investors also say they are willing to pay an average of 0.49 per cent on an ongoing basis for recurring advice on top of the one-off fee. This lines up very closely with what many advisers charge at the moment.

We think there is a big opportunity for advisers to offer in-person advice to retirees and to those saving for retirement. Investors are willing to pay for advice for major financial planning events and are willing to pay fees in line with what many advisers charge. They want in-person advice – a service that advisers are best placed to deliver.

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Heather Hopkins is director of research at Platforum