Is Your Financial Adviser's Fee Normal? Understanding Adviser Costs

How Financial Advisers Charge

Financial advisers in Australia use several fee models. The most common are a fixed dollar fee for preparing a Statement of Advice (typically $2,000–$6,000 depending on complexity), ongoing advice fees charged as a percentage of your investment balance (commonly 0.5%–1% per year), or a flat annual retainer for ongoing service. Some advisers also receive commissions or trailing commissions from product providers, though these have been significantly restricted under FOFA reforms.

What Is Reasonable?

Industry research suggests the median cost of initial advice in Australia is around $3,000–$4,000 for a comprehensive SOA. Ongoing fees typically range from $2,000–$5,000 per year or 0.5%–1% of funds under management. Fees at the higher end may be justified for complex advice involving multiple strategies, SMSFs, or estate planning, but for straightforward advice, lower fees are reasonable. A 1% ongoing fee on a $500,000 portfolio is $5,000 per year — you should be receiving meaningful ongoing service for that cost.

What Your SOA Must Disclose

Under FOFA reforms, your Statement of Advice must clearly disclose all fees and costs associated with the advice and any recommended products. This includes the dollar amount of fees where practicable and a description of the services you will receive in return. If your SOA does not include a clear fee table or uses vague language like "various fees may apply," this is a red flag.

Check for Hidden Costs

Beyond the adviser's own fees, there may be product-level costs that are not immediately obvious. These include investment platform fees, super fund administration fees, insurance premiums embedded in super, and buy-sell spreads on investments. Your adviser should disclose these in the SOA or product disclosure statement. If the total cost of the recommended strategy is unclear, ask for a summary of all fees, not just the adviser's fee.

What to Do If You Think Fees Are Too High

If you believe your adviser's fees are excessive or were not properly disclosed, start by raising your concerns directly. Ask for a breakdown of fees in dollar terms. If you are not satisfied, you can escalate to the adviser's licensee or lodge a complaint with AFCA. You also have the right to opt out of ongoing fee arrangements at any time.

Industry Fee Benchmarks

ASIC research provides benchmarks for financial advice fees. The median cost of comprehensive initial advice (including an SOA) is approximately $3,500. Simple advice on a single topic ranges from $800-$2,000. Complex advice (SMSF establishment, complex tax strategies) can cost $5,000-$8,000 or more.

Ongoing advice fees average $2,500-$3,500 per year for standard ongoing service arrangements. Percentage-based fees average 0.6%-0.8% of assets under advice. Fees at the higher end may be justified for complex situations or specialist advisers.

What Influences Fee Levels

Several factors affect advice fees: the complexity of your situation, the adviser's experience and qualifications, the location of the practice (city vs regional), the size of the licensee, and whether the advice is provided by a team or individual.

Fees also reflect the regulatory burden. Advisers must spend significant time on compliance, training, and professional indemnity insurance. These costs are built into fee structures.

When Fees May Be Too High

Fees may be too high if: they are significantly above industry benchmarks without clear justification, the services provided do not match the fee level, fees were not adequately disclosed upfront, or you are paying for ongoing services you are not receiving.

If concerned about fees, request a detailed fee breakdown and compare with your SOA disclosure. Ask your adviser to justify the fees. If unsatisfied, consider negotiating or finding a lower-cost adviser.

Frequently Asked Questions

How do I know if my fees are reasonable?
Compare against ASIC benchmarks: initial advice $2,000-$6,000, ongoing $1,500-$4,000 p.a. or 0.5%-1% of assets. Consider your situation's complexity.

Can I ask my adviser to reduce their fees?
Yes. Fee negotiation is acceptable. Many advisers are willing to discuss fees, particularly for ongoing arrangements.

What if I am paying for services I am not receiving?
Raise this with your adviser. If unresolved, terminate the ongoing arrangement and request a refund. Escalate to AFCA if needed.

Are online advisers cheaper?
Digital advice platforms typically charge lower fees ($200-$800 for simple advice) but are limited in scope. They are suitable only for simpler financial situations.

What Financial Advice Costs in Australia

Understanding typical advice fees helps you evaluate whether your adviser's charges are reasonable. Recent industry data provides clear benchmarks:

Fee Type	Typical Amount	Trend
Annual ongoing advice fee	$4,700 – $4,800 (median)	Up 67% over 5 years, but growth slowing to ~4%
Initial SOA / plan fee	$2,000 – $3,500	Varies by complexity
Hourly rate	$300 – $600 per hour	Higher for specialist advice
Funds under advice (FUA) fee	0.5% – 1.1% of balance	Average FUA: $758,000
Top 20% profitable practices	Nearly double median	Higher fees = leaner cost-to-serve models

Despite 68% of Australians seeing the benefit of professional financial advice, only 6% are willing to pay more than $2,500 for it. This gap between perceived value and willingness to pay is a key reason why regulatory reforms (DBFO, QAR) aim to reduce the cost of advice delivery.

If your adviser's fees are significantly above these benchmarks, ask for a clear breakdown of what you're receiving for the premium. Your SOA must disclose all fees and charges under FOFA requirements.

Sources: Adviser Ratings Australian Financial Advice Landscape 2025, Vanguard Adviser Best Practice Guide 2025, Investment Trends Adviser Business Model Report 2025.