What is the Cost of Using a Financial Adviser?

“There are risks and costs to action. But they are far less than the long range risks of comfortable inaction” ― John F. Kennedy

3 min read

What is the Cost of Using a Financial Adviser?

“There are risks and costs to action. But they are far less than the long range risks of comfortable inaction” ― John F. Kennedy

3 min read

In a world where sound financial decisions are key to securing our future, many individuals turn to Financial Advisers for expert guidance. The question that naturally arises is, “What is the cost of using a Financial Adviser?” Understanding the costs associated with engaging a financial professional (or any professional for that matter!) is crucial, as it allows you to make informed choices about managing your finances.

Curious about how much you might pay for advice? or what the average cost for using a Financial Adviser might be? Read on as we break down the various expenses related to using a Financial Adviser, helping you gain insight into the average costs and enabling you to maximise the benefits of this valuable partnership.

What to Expect When Considering a Financial Adviser

When considering whether to seek help from a Financial Adviser, one of the first questions that may come to mind is, “What am I paying for?” The services provided by Financial Advisers are diverse and can vary depending on your needs.

For example, at Patterson Mills we do not just assist you with investments. Rather, we provide a holistic lifestyle financial planning strategy that covers not only buying a house, retirement planning, educational fees planning, debt and risk management, estate planning, business planning, emergency fund planning, but also much more.

The list goes on, but you get the picture. Patterson Mills Financial Advisers are not just here to help you invest your money.

What are the Average Costs?

Understanding the cost structure of Financial Advisers is essential for the success of your financial future. Advisers typically charge fees in a few different ways, so we understand it can sometimes be confusing. In addition, the total cost can vary based on factors like the level of service, the complexity of your financial situation, and the assets being managed.

Here are the most common fee structures:

Percentage of Assets Under Management (AUM): Many advisers charge a percentage of the total assets they manage for you. This fee varies for each Advisory firm, but can typically range from 0.50% to 1.50% annually. The percentage you will pay is generally decided upon by the amount of funds you invest, with the percentage lowering for higher amounts.
- For instance, if you have CHF 1,000,000 in investments and the Adviser charges a 1% AUM fee, you’d pay CHF 10,000 per year. Usually, this is charged on a monthly basis, so it would work out to CHF 833 per month.
Hourly or Fixed Fees: Some Advisers charge an hourly rate or a fixed fee for their services. The hourly rate can vary widely, often falling in the range of CHF 250 to CHF 500 per hour. Fixed fees can also vary, depending on the complexity of the services provided.
Commission-Based Fees: In some cases, advisers may earn commissions for selling financial products like insurance or mutual funds. Whilst you may not have to pay direct fees, it’s essential to ensure that your Adviser has provided you with complete transparency when it comes to how they are paid, so you can see if there are any conflicts of interest at play.

Factors That Influence the Cost

Several factors influence the total cost of using a Financial Adviser, and it’s essential to consider them when estimating your expenses. Here’s a few factors that can influence the cost:

Level of Service: The depth of service you require, whether it’s a one-time financial plan or ongoing investment management, will affect the cost.
Assets Managed: If you have more assets to manage, you’re likely to pay a higher AUM monetary figure, but lower percentage fee.
Complexity of Your Finances: If your financial situation is complex, such as owning multiple properties, businesses, or other intricate assets, you may incur higher fees due to the additional work required.
Adviser’s Experience and Expertise: Advisers with more experience and expertise often charge higher fees.
Location: Costs can vary significantly based on your geographic location. Advisers in major cities may charge more than those in smaller towns or rural areas.

Cost vs. Value

Depending on which Advisory firm you choose, the cost of a Financial Adviser may initially seem steep. Hence, it’s important to know the value they bring to your financial wellbeing to check if you are getting value for money. A skilled Adviser can help you make informed investment decisions, navigate complex tax laws, and develop a comprehensive financial plan. The return on investment from sound financial guidance can often outweigh the costs incurred, too.

Finding Value in Financial Advice

You will have seen by now that the average cost of using a Financial Adviser is influenced by various factors, and you should strive to understand these elements when seeking professional financial assistance. Whilst the expense of hiring an Adviser can seem daunting, the potential for achieving your financial goals and securing your future with expert guidanceis often invaluable.

At Patterson Mills, we understand that every financial situation is unique, and we aim to provide tailored advice that maximises your financial wellbeing now and into the future. Get in touch today and book your initial, no-cost and no-obligation meeting. Send us an e-mail to info@pattersonmills.ch or call us direct at +41 21 801 36 84 and we shall be pleased to assist you.

Please note that all information within this article has been prepared for informational purposes only. This article does not constitute financial, legal or tax advice. Always ensure you speak to a regulated Financial Adviser before making any financial decisions.