Is it expensive to get pension advice?

28 October Reading Time: 4 minutes

Despite acting as an important tool for securing a comfortable retirement plan, there are still several common misconceptions that prevent people from seeking pension advice.

Among others, these misapprehensions include confusing jargon, the belief it is only worthwhile for the wealthy, and that it is too expensive. And, the latter consideration seems to be the largest barrier, with My Pension Expert’s own research revealing that 75% of Britons aged 40 and over think it to be true.

 So, let’s explore why cost is such a major barrier to advice. 

It is understandable why there is a belief among many Britons that financial advice is too expensive – historically, it wasn’t always accessible to people of all wealth brackets. And this has led people who could benefit greatly from advice to avoid it altogether – even in times of economic turmoil. 

A recent My Pension Expert survey of UK workers aged 40+ found that only 13% had spoken to an independent financial adviser about their retirement/pension strategy. Despite 37% of them expressing that cost-of-living exacerbated retirement planning stress, few had sought out tailored advice. A low uptake in advice is certainly alarming, considering inflation is currently sat at 10.1% and rising.

Therefore, it’s important pension planners understand the true cost of financial advice.

What is the cost?

It’s important to first acknowledge that independent financial advice does cost, and the fees charged will vary among advisers. 

Before breaking down the cost, it’s important to note that clients should always be informed of adviser fees before ANY transaction occurs. This is vital in building trust. 

These fees will be determined by factors such as the amount of advice needed, the time needed to reach the client’s financial objective, and the value of the assets involved, e.g., a pension pot. Typically, advisor fees range from 1 to 2 percent of the asset in question.

Larger assets are subject to lower percentage charges, whilst smaller assets are subject to higher percentage costs.

Meanwhile, clients who choose to retain an adviser for a more extended period of time may also be charged ongoing adviser fees by IFAs. Again, these costs can differ from adviser to adviser, but they often fall between 0.25 and 1%.

At My Pension Expert, we only charge our clients an adviser fee if they decide to follow their adviser’s recommendations following a full consultation – which our team explains at the very beginning of a client’s retirement journey. In doing so, we ensure that people of all wealth brackets are able to access advice without worrying about surprise fees.

Is it worthwhile? 

Pension advice is personalised to each client to put them in a better situation financially. As such, the recommendations they receive are tailored to their specific needs and goals. 

Indeed, it is through these tailor-made recommendations that we see the value of advice. 

For example, our team at My Pension Expert, will assess the entirety of a client’s financial situation and retirement goals and help them to readjust their strategy accordingly. For some, this might mean moving their money into higher-risk investments to combat inflation-devaluing pension pots. Whilst others might be better suited to a lower-risk flexible-access drawdown. Our advisers have clients’ best interests at heart, so their recommended approach will be suited to the client’s specific needs. 

Getting independent financial advice can be incredibly helpful when creating a long-term pension and retirement plan. And although it does come with a fee, the long-term benefits it offers clients are undoubtedly worthwhile. 


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