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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.

To subscribe to Platforum’s Advice in Retirement report, email us on

Heather Hopkins is director of research at Platforum



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There are 7 comments at the moment, we would love to hear your opinion too.

  1. A friend of mine is advising on an investment of just over £1,000,000 at the moment and he, as would I, would laugh in your face if you asked him to do it for £800.00. Look at the liability that goes along with it! It’s all very well thinking that there should be no more liability than if it were £10,000, if you (and the provider) always get everything 100% right. But that does not apply in the real world and when we have the ombudsman that we do, who can find against you for a totally spurious reason.

    • Patrick, thanks for your comment. I don’t disagree. A client with 1m to invest would expect to pay more and we don’t think most advisers (in the current environment) could deliver advice profitably for £800.

      Two things- 1. this rate is higher than many people seem to expect as an average across investors (most of whom don’t have £1m). 2. This is higher than the £500 that investors will be able to withdraw tax free tinpot for advice on a pension pot. We think the £500 limit is too low and investors would question the quality of advice as it would be too cheap a that level.

  2. Interesting stuff. Has any research been carried out on what it costs an adviser to deliver retirement planning advice?

    Assuming that advisers are in business to make a profit (what are they doing if they aren’t?) is £800 enough?

    How was the service proposition described to the participants in the survey?

    What reference points did they have?

    Sorry too many questions!

  3. Our minimum initial fee is £1250 and it looks as though a third of those surveyed wouldn’t find that too expensive. I’m happy with that – in any case, we don’t have the economy of scale to look after the other two thirds.

  4. Hi Nick, I like your suggestion to measure the cost of delivering the advice. Most advisers we speak to say they charge about 3% for the initial consultation so the £800 figure is significantly lower than the 3% of total portfolio size that advisers charge for initial consultations. On a typical £100,000 portfolio, 3% charge would be £3,000. There seems to be a gap between what active private investors are willing to pay for one-off advice and what advisers are charging. That said – we think the gap is smaller than many might have expected.

    I will email you the report Monday which includes more detail on methodology. In short we presented investors with a scenario based on a one-off fee for a ‘major financial planning event’. We then asked them to respond to two questions.

    1. At what point does the advice start to become too expensive to consider using?
    2. What fee would be so low that you would start to doubt the quality of the advice?

    The respondents were given fees starting from £500, all the way to £8,000 in increments of £500. The cumulative distributions of the responses to the two questions are illustrated on the chart in the article.

    I hope that helps to clarify but again, I’ll email you the report Monday.

    And… never too many questions!

  5. Thanks Heather I look forward to receiving it. Working out the cost of advice delivery is an important step in adviser pricing policy. In my experience it results in a move away from % of investment to £ fixed pricing.

    Leaving aside risk for which a premium should be charged it generally means the fee is the same (similar) regardless of scale of investment

  6. I certainly could have made a profit on these figures on portfolios of up to £200k and the FUM chgarge of almost 0.5% was at the upper end of my charge scale.

    I did see Nick’s post on 15th September 2016 at 1:11 pm and in response I would say that much depends on your costs. If you have swish offices in a relatively expensive area and employ hordes of staff then you may struggle with these figures. Ruthless control of overheads makes one’s break even point a lot lower as many a small catefully run firm can testify.

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