How much does financial advice cost in Australia? Fee structures explained

Unlike a lot of everyday services, financial advice does not come with anything close to a standard price list. What it does have is a small number of consistent fee structures that show up across the industry, and understanding how they work makes it much easier to compare quotes and ask the right questions before agreeing to anything.

The most common structure today is fee-for-service, where you pay a set dollar amount or an hourly rate for the adviser's work rather than a fee tied to any product you end up buying. A large part of this is typically the cost of preparing a Statement of Advice, the formal written document that sets out the adviser's recommendations and explains why they consider them appropriate for your circumstances. Industry sources commonly put the upfront cost of a Statement of Advice somewhere in the range of $3,000 to $6,000 or more, with the figure rising for more complex situations — for example a plan covering retirement, superannuation, insurance and investments together will generally cost more than advice on a single, narrow topic. Treat any figure you read online, including this one, as a rough planning range rather than a quote for your own situation, since actual pricing depends heavily on the adviser and the scope of work involved.

Many people who continue working with an adviser after the initial plan also pay an ongoing fee, commonly structured either as a flat annual retainer or as a percentage of the value of the assets the adviser is managing or advising on, generally called an asset-based fee. With an asset-based fee, the dollar amount you pay rises as your portfolio grows, even if the amount of work involved does not change much year to year, which is worth keeping in mind when comparing a percentage-based fee against a flat one. A meaningful consumer protection applies to ongoing arrangements specifically: you must give written consent to keep paying an ongoing fee, that consent has to be renewed periodically rather than being open-ended, and you are entitled to end the arrangement at any time.

Commissions — payments made to the adviser by a product provider rather than by you directly — used to be common across the industry and were a significant driver of past conflict-of-interest concerns. Reforms over the past decade have restricted this substantially: commissions are now largely prohibited for personal advice relating to superannuation and investment products. Commissions on life insurance remain legal but are capped, commonly cited as up to 60% of the first year's premium paid upfront and up to 20% ongoing in each year after that. Because commissions still exist in that one area, it is reasonable to ask directly how a recommendation involving insurance is being paid for, and whether that payment affects which product is being recommended.

Whatever structure applies, fees are required to be disclosed to you in writing before you are charged, and it is worth comparing the structure itself, not just a single headline number, since two advisers quoting similar dollar figures can be charging for genuinely different scopes of work. It is also reasonable to ask what happens if you decide not to proceed after receiving a Statement of Advice you have already paid for.

This article is general information only. It has been prepared without taking into account your individual objectives, financial situation or needs, and it is not personal financial advice. Before engaging any financial adviser, confirm they currently hold an Australian Financial Services Licence (AFSL) or are an authorised representative of an AFSL holder, using ASIC's Financial Advisers Register at moneysmart.gov.au. Our directory lists financial advisers and superannuation specialists across Australia by area if you are ready to start comparing your options.

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