Is financial advice free?
The cost of financial advice can be confusing, largely because there are various types of financial advisor and numerous ways of charging for the advice. The common theme is that all financial advisors should be clear and up-front about any charges you’ll need to pay.
Some financial advisors charge a flat fee for their services - a one-off figure for each piece of work they undertake (whether that’s an annual review or an initial fact-find and recommendation).
Others charge an hourly rate, which will vary greatly depending on the advisor’s experience.
There’s a third way to charge for financial advice too – as a proportion or percentage of the money you choose to invest. This is how Wesleyan Financial Services Consultants usually charge for savings, investments, pensions and annuity products.
For third-party insurance, protection or mortgage products, we’re paid commission.
Note that advice charges are different to management fees charged by the product provider. On many investment products, you’ll typically have management fees to pay whether you choose to take financial advice or not.
How financial advice works at Wesleyan Financial Services
Our Financial Consultants can visit you at home or work, or speak to you via an online meeting. They’ll assess your financial situation, goals and objectives, and recommend the right products and course of action for you.
If you choose to invest or save money with Wesleyan as a result, a percentage of your investment will be taken as the advice charge.
The advice fee can vary by product, but it’s typically 3%. If, for example, you invest £10,000 in a With Profits ISA via a Wesleyan Financial Services Consultant, £300 would be taken from that investment as the advice fee.
That applies both to lump sum investments and monthly payments, though the fee drops to 1% on contributions over a certain amount. For more details, you can view our advice charges here.
You can usually also opt in for the Ongoing Advice Service (charged separately) if you’d like to receive regular advice going forward.
Why we charge this way
Charging for advice as a proportion of the investment has two key benefits for the customer. Firstly, it ensures a degree of affordability, because you’ll only ever be paying a small percentage of the money you’re already happy to invest.
Secondly, it means that the meeting or consultation itself has no hourly charge or flat-fee applied*. There’s also no obligation to invest in Wesleyan products. It’s only if you decide to act on the recommendations you receive that you’d pay anything at all.
* The only exception to this is if you do not select the Ongoing Advice Service, but do request further advice. In this instance we will charge for additional advice by the hour. See here for details.
What is the Ongoing Advice Service?
Independent vs restricted advice
Broadly speaking, there are two types of financial advisor:
- Independent financial advisors
- Restricted advisors
Wesleyan Financial Services Consultants are restricted advisors. They are employed by the company and typically advise on products from within the Wesleyan Group (though they can also advise on third-party protection products and mortgages).
Independent advisers will consider products from a wide range of firms across the market.
All financial advisers must be approved or authorised by the Financial Conduct Authority. Both independent and restricted advisers must pass the same qualifications and meet the same requirements to ensure they are providing suitable advice.
We make no bones about the fact that our advisors provide restricted advice. Because they work in-house, they don’t usually have to charge hourly rates like a lot of independents do.
And, as our Financial Consultants work with Wesleyan products day in day out, they know the products they’re recommending inside out.
They know our customers too. For generations, our Financial Consultants have provided tailored advice to doctors, dentists and teachers, specialising in the financial issues that affect these trusted professions the most.
When and why you might need financial advice
A lot of the time, financial matters are things we tend to keep to ourselves - but getting professional advice at the right time can make a real difference to you and your family’s financial health.
Below are just a few of the reasons or scenarios that might lead you to consider speaking to a Financial Consultant for the first time. Bear in mind though that financial advice isn’t just for those big life-changing moments - it’s worth reviewing your situation on a regular basis to ensure your goals remain on track:
Something to save for
Whether you’re saving for a wedding, a new car or a house deposit, putting your money in the right place could help the pot grow faster.
A Financial Consultant would look at the most efficient and effective way to reach your target, taking into account your financial circumstances, and how long you have to save or invest.
Financial Consultants can advise on things like mortgages too, so they’ll be of use to you at various stages of saving for a home.
A growing family
Everything changes when children come along, and that includes your attitude to money. If you’ve recently started a family or you’re planning to soon, you’ll want to think about the best ways to save and invest for your children’s future.
If your children have already grown up and fled the nest, you might be giving some thought to things like inheritance tax planning. That’s something a Financial Consultant can help with too.
Just bear in mind that advice in relation to Inheritance Tax planning is not regulated by the Financial Conduct Authority.
Whether it’s decades away or fast approaching, retirement is one of the most important things you can save for. Our Financial Consultants can help you look at the most tax-efficient ways to build your pension pot – and decide what to do with it when you finally call it a day at work.
Because our Financial Consultants specialise in certain key professions, we’ve become experts in things like the Teachers’ Pension and the NHS Pension, and can help you make sense of even the most complex schemes.