Financial advice fees: are they worth it?
Written by Glen James
Host of the Retire Right & money money money (formerly my millennial money) podcasts & author of The Quick-Start Guide to Investing
I want to talk about something that comes up a lot in the Retire Right Facebook group — the cost of financial advice.
A once-off advice fee in Australia today is often in the $5,000–$6,500 range. And that’s just to get started. And yes, that can feel like a lot of money. But let’s take a step back.
Right now, we’ve got half the number of advisers we had five years ago. Regulatory changes, red tape, and compensation schemes (Google ‘compensation scheme of last resort or CLSR’ if you're bored) have made it harder for people to stay in the profession, and that’s driven costs up. But the advice fee? It's not just a cost. It's an investment to protect what is likely a very large nest egg (your net worth!).
Let’s say your combined assets — your super and home — are worth $1.8 million. An advice fee of $6,500 is about 0.36% of your net worth. Not even half a percent. Would you spend 0.36% to avoid a $50,000 mistake in retirement? I would. Would you pay that to be confident you're making the right moves with your money, super withdrawals, estate plans, and investment strategy? I would.
Granted, many people do not have a $1.8 million-dollar net worth. But, what if you owned your house worth $800,000 and had $500,000 in super? Or even $350,000 in super? Generally, fees can be relative to the complexity of the situation. If, for example, a once off advice fee was $4,500 against a $350,000 portfolio, that's still 1.30%. If a portfolio did 6% that year, do you want to sacrifice about 1% to ensure you don't make an error that could cost you thousands? I would. Many of you know that I have a minor interest in a financial advice business and $4,500 is our minimum fee.
It's important to note that while we do not believe in percentage-based fees, flipping a situation back to a percentage can give you some confidence and perspective. I don't want to hide this and happy to declare I do benefit from people using our business for advice.
But if you have any doubt, just find another adviser not on my platform or via Retire Right. I honestly see the value in financial advice, and I hope I speak on behalf of financial advisers all over Australia.
Finally, on the fee front, speak to your adviser as financial advice fees can be tax-deductible and / or funded from your superannuation balance.
You don’t have to sign up for ongoing advice
There’s a myth out there that every adviser wants to lock you into ongoing annual fees. That’s just not true. You can get one-off advice, a tailored Statement of Advice (SOA), and go on your way. In fact, good advisers will often tell you when you’ve ‘graduated’ from needing ongoing advice. In my business, we do not want to take money from people who don't need our service nor see the value.
If it's helpful to you, you can sign up for ongoing advice. My parents, for example, pay around $5,000–$6,000 per year to their financial adviser. They get a strategy review, regular updates, and a plan they stick to. When markets move, they’re not panicking, because they have a clear roadmap, they’ve got a cash buffer for down years, and they’ve had their adviser explain it all to them. That peace of mind is worth it. Especially when things get bumpy.
Here’s what great advice actually does:
Good advisers don't just sit on your investments. They:
Build a retirement strategy and income plan based on your actual lifestyle
Make sure your super is working in concert with your personal goals & risk tolerance
Help with Centrelink strategies, tax planning, and estate prep
When markets wobble, or you're unsure of something, they will be the voice of reason in your corner. This is worth a lot. Check out the Vanguard adviser alpha report. It's fascinating.
If you’re confused about fees, strategies, or whether advice is worth it, I hear you. There’s a lot of noise online. But I’ll say this: not everyone needs a financial adviser, but we all need a financial plan. If your financial world is complex, or you're not confident to move hundreds of thousands of dollars around you need to consider an adviser. And you definitely do not want to make a costly mistake prior to or in retirement.
If you’re unsure about how to find the right financial adviser for you, I’ve written a blog on this topic, and if you’d like us to refer you to advisers on our panel, please reply to this email or click the button below:
If you want to watch Martin McGrath and I discuss fees you can watch here 👇
Community question
Community member says: Our granddad is 90 (my husband's granddad) and his wife died at the end of last year. He's coming into her remaining super—about $149,000. He already has around $350k–$400k in shares and was going to put that extra $150k into more shares. He has a financial adviser, but I’m not sure how great they are. We were thinking of approaching him to suggest that if he gave us some of the recent payout, we could pay him regular dividends from that money instead—since he might lose a bit now if he puts it all in the stock market. Obviously, we’d get legal advice. Is that a crazy thing to suggest? I mean, he’s not going to live to 100. He also wants to keep his pension, even though I explained he probably has plenty of money and low expenses at 90.
Glen says: What’s granddad’s investment horizon? That’s the key question. At 90, the priority isn’t growing wealth, it’s making sure his money works for him and is accessible if he needs it. If he’s living off dividends and happy to ride the ups and downs of the share market, then share price movement in the short term might not matter much. But if he’s going to need access to that money soon—for care, support, or other expenses—it’s risky to lock it all into shares.
It’s great that you want to help, but remember, it’s his money. If he’s of sound mind and still wants to make investment decisions, even if they don’t align with your thinking, that’s his right. If he wants to keep things simple and just park the money in an online savings account, that’s also fine. There’s no one-size-fits-all at this stage of life. And yes, keeping his Age Pension may feel important to him emotionally, even if, on paper, he has ‘enough.’ Let him make that call.
Now, on your suggestion to manage the money and pay him a regular income—it’s not necessarily crazy, but you’re right to be cautious. If you go down that road, you’d definitely want legal and financial advice to protect both parties. It’s not just about money—it’s about Centrelink rules, future healthcare costs, family expectations, and estate planning. It could get complicated quickly if not handled carefully.
And finally, this is a great time to check that he has all his documents in place, like a current will, power of attorney, and a clear plan for what happens if he needs care or help down the track. That’s just as important as what to do with the $150k. The real question is: has granddad asked for your help? If he’s open to it, then proceed thoughtfully. But if not, the best thing you can do is support him in making his own informed decisions.