Adviser fees
This guide covers the types of adviser fees, how to analyse them, and strategies for minimising these costs while maintaining quality advice.
Advisers provide personalised, specific guidance. If you're paying someone who only sends you a newsletter each month, that's not advice — you're getting ripped off.
Good advisers educate you on three things: compliance, risk, and strategy. A buyers agent is a strong example: they can help you avoid buying a house with significant issues you would otherwise have missed, and they can negotiate a better price, saving you well in excess of their fee. That is good advice — when you get more back than it cost you.
Plenty of people will charge you for bad advice. In general, if advice is not tied to a real event or decision, it is probably not worth paying for. A good adviser educates you so you can do more yourself, rather than repeating the same advice every year.
Example: Chiropractor vs Physio
If you hurt your back you could see a chiropractor or a physio. The chiropractor will tell you how skilled they are, provide you temporary relief and tell you to come back next week - that's management, not advice. A physio will manage pain, explain what is happening to your muscles, and give you exercises to correct. They will advise you and empower you to take control - that's good advice.
Analyse & negotiate fees
1. Get Quotes
Never agree on the spot. Collect quotes from multiple advisers, compare inclusions, and make an informed decision. Educate yourself on the topic first so you know what questions you need to ask.
2. Calculate Total Cost
Include every fee: management, performance, platform, transaction, and hidden charges. Express them as both dollar amounts and hourly rates. A sales agent's commission might be about 2% of the sale price. Even if their involvement helps achieve a higher price, that does not mean they should take the whole gain — convert the percentage to dollars and negotiate any commission that produces an excessive amount.
3. Evaluate Value Proposition
Assess the upside the advice enables and the downside it protects you from. Compare service quality, responsiveness, and investment performance relative to the fees charged.
4. Consider Your Situation
Factor in portfolio size, complexity, time availability, and your own investment knowledge. Advisers deliver the most value when their expertise directly addresses an event or decision you cannot confidently manage alone.
Events worth seeking advice for include:
- Buying or selling property
- Establishing trusts or companies
- Defining an investment strategy
- Preparing critical documents such as wills or powers of attorney
- Managing litigation
- Responding to significant health or medical issues
You can even get advice on the advice. A vendor's advocate is someone who will help you prepare your home for sale, negotiate contracts with sales agents and guide you through the sale negotiation when the sales agent is trying to tell you this is the best price you'll ever get and pressure you to sell. And they generally don't cost you anything directly.