UK advisers are paid by fees you agree upfront, not by commission, which was banned in 2012 for investments and pensions. Fees come in three shapes: a percentage of your money, a fixed or flat fee, or an hourly rate. They are charged for initial advice and, if you choose it, an ongoing service.
The short answer
- For investments and pensions, advisers are paid by an agreed fee, not commission.
- Fees take three shapes: a percentage of assets, a fixed fee, or an hourly rate.
- An initial fee covers setting up your plan; an optional ongoing fee covers reviews.
Since the 2012 ban on commission for investment and pension advice, UK advisers are paid in a refreshingly simple way: by a fee you agree before any work begins. There are no hidden cuts from product providers on this kind of advice, just a charge you have seen, understood and signed off. What varies is the shape of that fee, and there are three main models. This is general information, not personal advice.
The three shapes are a percentage of the money involved, a fixed (flat) fee for a defined piece of work, or an hourly rate. On top of that structural choice sits a second question: are you paying once, for a single piece of advice, or on an ongoing basis for a continuing service? Understanding both dimensions tells you exactly what you will pay and why.
The three ways advisers charge
How UK advisers structure their fees (2026)
| Model | Typical level | Best suited to |
|---|---|---|
| Percentage of assets | 1–3% initial; 0.5–1% a year ongoing | Investing or transferring a lump sum you want managed |
| Fixed / flat fee | £500–£5,000+ per piece of work | A defined job, a pension review, a retirement plan |
| Hourly rate | ~£150–£300 an hour | Focused advice or a one-off question, paying only for time used |
None of these is inherently better; the right one depends on the size of your pot and the job in hand. A £300,000 investment might be cheaper on a capped fixed fee, while a small, focused query could be answered in a couple of hours at an hourly rate. Our comparison of percentage versus fixed-fee advice weighs this up in detail, and the sibling answer on what percentage advisers charge digs into the percentage model.
The percentage model remains the most common, largely because it is convenient, the fee flows automatically from the money the adviser manages, and it rises and falls with your portfolio so their reward is loosely tied to your success. Fixed fees are growing in popularity among clients who dislike paying more simply because they have more, and among those wanting one discrete piece of work with a known price. The hourly model is the least common but the most transparent of all: you pay for the time used and nothing else, which suits confident investors who want to check a specific decision rather than hand over the reins.
Initial versus ongoing
Almost every adviser separates a one-off initial fee, for the research, recommendations and setting things up, from an optional ongoing fee for continuing to manage and review your finances year after year. You can take the initial advice and stop there, or sign up for the ongoing service if you want annual reviews, rebalancing and someone to call. The ongoing part is entirely optional and can be cancelled.
Commission still applies in a few areas
The fee-only picture covers investments and pensions. For mortgages, protection insurance and equity release, an adviser may still be paid commission by the lender or insurer, but they must always disclose it. See our answer on whether advisers still earn commission for the full picture.
How the fee actually reaches the adviser
Once the amount is agreed, there are two ways to settle it. You can pay by invoice from your bank account, or you can have the fee deducted from your investment, pension or ISA, known as facilitated adviser charging. The latter is popular because it is convenient and, for pensions, can be tax-efficient: the charge is paid from money that has not yet been taxed. The trade-off is a small reduction in the invested balance, a point explored in our answer on whether adviser fees can be taken from your investments.
Behind whichever number you are quoted sit two further costs that are not the adviser’s fee but reach you all the same: the platform charge for the service that holds your investments, and the fund charges of the investments themselves. A good adviser presents all three together, so you can see the full annual cost in pounds rather than being surprised later. That habit of showing the total, plainly and in cash, is one of the clearest signs of a firm that treats you as a long-term client rather than a one-off sale, and it is a fair thing to insist on before you agree to anything.
What ties all of this together is transparency. Whatever model an adviser uses, the rules require them to set out the cost clearly, in cash as well as percentage terms, before you commit, and the first meeting is normally free. The free Vetted Wealth service matches you with an independently vetted, FCA-regulated adviser whose charges are visible upfront; explore financial advisers or your local hub in Cornwall. This is information and a matching service, not personal advice, and investments can fall as well as rise.
In summary
- For investments and pensions, advisers are paid by an agreed fee, not commission.
- Fees take three shapes: a percentage of assets, a fixed fee, or an hourly rate.
- An initial fee covers setting up your plan; an optional ongoing fee covers reviews.
- Fees can be paid by invoice or deducted from your investment, pension or ISA.
- Commission survives only in mortgages, protection and equity release, and must be disclosed.
- Costs must be shown clearly before you commit: this is information, not personal advice.
Sources and further reading
- Financial adviser charges MoneyHelper
- Retail Distribution Review Financial Conduct Authority
Read the full guide
For the complete picture, see our in-depth guide: How Financial Advisers Are Paid Since RDR.
Speak to a vetted financial advisers specialist
This is free information, not personal advice. When you’re ready, we’ll match you with an independently vetted, FCA-regulated specialist, free, and with no obligation.
