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Financial advice isn’t free, but it can be confusing to know how you might be charged for financial advice, and how advisers are paid for giving advice.
Since 2013 advisers are no longer incentivised to recommend one product over another, as they are no longer paid commission through the product provider for pensions, investments or retirement income products. Before then, your adviser would probably have been paid commission as a percentage of your investment, but the amount of that commission might have varied depending on which product or provider you went with, and therefore some advisers might have been tempted to recommend particular products or providers who paid a higher commission. (Advisers can still be paid in commission for advice on mortgages, equity release and insurance).
Now an adviser must now explain how much the advice will cost, and give you the options of how you might pay for it at outset, once they have a clear understanding of your requirements. You can then agree the service you require and the charges for this before any advice work starts.
There are various ways that you might be able to pay your adviser, but you will need to discuss this with them, as they might not offer all these options:
You may be able to pay your adviser up-front, or part up-front and the rest when the work has been completed. You may also be able to pay from the sum you invest, or in instalments. Again, you will need to discuss and agree this with your adviser, and find out what options they offer.
Many advisers will offer an initial non-obligatory meeting at their cost, which is the opportunity for you to outline your requirements, and for them to explain how they work, and to discuss issues such as fees and payment options. This meeting isn’t designed for them to give you specific advice about your situation. If you go ahead and take advice from this adviser, their costs for this meeting may be included in their overall final fee.
Also, fees may vary from adviser to adviser, and they may offer different payment options, so it is worth contacting more than one adviser so you can compare fees and options before making a decision.
However you pay for your advice, and whatever adviser you choose, advisers are required to set out their charges and payment options in a clear and transparent way, and make sure that you understand how much you are paying, and agree how you will pay this.