In this guide
Given the complexity of superannuation and retirement planning, and the widespread belief that financial advice is for “people with more money than me”, it’s fair to say there are more Australians who would benefit from financial advice than there are those who seek it.
According to the Investment Trends 2024 Financial Advice Report, only 7% of Australians currently receive financial advice. Of the remainder, 48% say they plan to get advice while 23% admit to having unmet advice needs but don’t plan to seek financial advice. The main barrier most often cited is cost, as rising fees and falling adviser numbers put advice out of the reach of many Australians.
Affordability was one of the issues addressed by the government’s Quality of Advice review (more on that later). With the cost of living rising, it appears many people assume financial advice is beyond their means, but is that actually the case?
Note: The terms financial adviser and financial planner are used interchangeably, with no difference between the two. In this article, we will use financial adviser for the sake of consistency.
Different types of advice for different needs
The cost of financial advice can vary considerably, depending on the type and extent of advice, your level of wealth and how you pay.
Low-cost (or free) financial advice can be found but it is likely to be limited in scope and general in nature. Your super fund should be your first port of call for simple questions about your super account, but the advice won’t be tailored to your personal circumstances.
Find out where to find free advice.
If you need more detailed, tailored advice, you’ll need to pay for it. This is what the Australian Securities and Investments Commission (ASIC) calls personal advice, but you can still choose the level of advice:
- Simple, single-issue or ‘scaled’ advice. This is advice about a particular issue and doesn’t take into account your full financial situation. For example, you may want advice on whether to increase your insurance cover or how much to contribute to super.
- Comprehensive or ‘holistic’ advice. If you need help with your overall financial situation through a comprehensive financial plan, you need holistic advice. This covers areas such as budgeting, retirement planning, starting a pension, investments outside super, insurance and planning how your assets and estate will be distributed after your death.
- Ongoing advice. If you want your adviser to monitor your investment portfolio and hold regular reviews with you to check your financial position and how your financial goals are progressing, you can opt into ongoing advice. This must be done every two years.
Read more about types of financial advice.
The total cost of advice you receive will include fees for various services, which can include the following:
Fixed fees
- Statement of Advice (SOA) fee: A one-off fee for preparing your SOA. This fee is either paid upfront and deducted from your investments or added to ongoing fees for service.
- Fee to implement financial advice: A one-off fee for implementing financial advice – for example, opening accounts and purchasing investments. This can be an upfront fee based on the value of your assets.
- Fee for ongoing financial advice: An ongoing fee for advice and services, like reviews, reports, phone calls, emails and newsletters. This is often a monthly fee.
- Fee for review: A one-off fee for reviewing your financial plan and implementing any changes – for example, changing your investments to align with your goals.
- Investment platform fee: Fixed fee for the administrative financial platform used to manage your investments.
- Hourly rate: Fixed fee per hour to answer one-off questions that are not part of ongoing advice or services.
- Fee for service: Fixed fee for a service or a type of advice, for example, preparing your Statement of Advice (SOA).
Percentage-based fees
- Asset-based (portfolio percentage): Percentage fee based on the total value of the assets in your portfolio. The more assets you have, the higher the fee.
- Investment management fee (performance percentage): Additional percentage fee based on the performance of your investments (usually measured by an agreed benchmark).
Source: Moneysmart.gov.au
If you have more complex financial needs, you should expect to pay more for financial advice than you would if your needs are more straightforward.
For example, if you’re setting up a self-managed super fund (SMSF), this can involve significant establishment and ongoing costs.
Learn more about set-up and running costs of an SMSF.
