Wealth Management Fees Explained: How Advisers Charge

Wealth management fees are one of the most important determinants of long-run investment outcomes, yet they remain among the least well understood by clients. The industry's fee structures are varied, sometimes complex, and not always transparently disclosed. Understanding precisely what you pay, to whom, and in exchange for what is essential for any investor who wants to evaluate whether their adviser relationship represents fair value.

This article sets out the main fee structures in wealth management, the typical ranges involved as of 2026, what drives the differences, and the questions every client should be asking.

The Layers of Wealth Management Cost

Most wealth management relationships involve multiple layers of cost that compound over time. Failing to account for all of them — as many clients do — leads to significant underestimation of the total cost of the service.

Layer 1 — Adviser fee: the charge made by the wealth manager, financial planner, or financial adviser for their advice, portfolio construction, and ongoing service.

Layer 2 — Platform or custody charge: the cost of holding the portfolio on a platform or in a custody account, covering record-keeping, reporting, and transaction processing.

Layer 3 — Underlying fund charges: the ongoing charges figure (OCF) or total expense ratio (TER) of the funds or ETFs held within the portfolio, covering the fund manager's fees, administration, and other costs.

Layer 4 — Transaction costs: dealing charges, stamp duty, foreign exchange spreads, and other costs incurred when the portfolio is traded.

The total of all four layers is the total cost of investing — often referred to as the total expense ratio or all-in cost. Many clients are aware of only the first layer; the others are often buried in documents that are technically available but rarely read.

Adviser Fee Structures

Percentage of Assets Under Advice

The most common structure in the UK wealth management market. The adviser charges an annual percentage of the value of the portfolio they manage or advise on. Typical rates:

• Below £250,000: 1.0% to 1.5% per year
• £250,000 to £500,000: 0.75% to 1.25% per year
• £500,000 to £1 million: 0.5% to 1.0% per year
• £1 million to £5 million: 0.4% to 0.75% per year
• Above £5 million: 0.25% to 0.5% per year, subject to negotiation

These percentages typically include ongoing review meetings, portfolio monitoring, and advice on changes to the client's circumstances. They generally do not include the underlying fund costs or platform fees, which are additional.

The percentage model has the advantage of aligning adviser incentives with portfolio growth. Its criticism is that it may incentivise advisers to keep assets under management rather than recommending alternatives (such as pension contributions or property investment) that would reduce the fee base.

Fixed Fees

An increasing number of independent financial planners charge a fixed annual fee — either a flat amount or agreed in advance based on the complexity of the work — rather than a percentage of assets. Typical fixed fees for a comprehensive financial planning service range from approximately £2,000 to £5,000 per year for a household with straightforward affairs, to £10,000 or more for clients with complex multi-jurisdictional, business, or estate planning requirements.

Fixed fees have gained traction because they align the adviser's incentives with delivering advice rather than accumulating assets. They also become proportionately more cost-effective as the portfolio grows: a £5,000 fixed fee on a £2 million portfolio represents 0.25% — substantially cheaper than a 0.75% percentage fee.

Hourly Rates

Some financial planners — particularly those who are truly independent and do not manage assets on an ongoing basis — charge hourly rates for advice. As of 2026, hourly rates for qualified independent financial advisers in the UK range from approximately £150 to £350 per hour, with senior partners at specialist firms charging upwards of £400. This structure suits clients who need specific advice projects — a pension review, pre-emigration tax planning, a financial plan at a major life event — rather than ongoing management.

Initial (One-Off) Fees

Many advisers charge a separate initial fee for the work involved in understanding a new client's situation, conducting analysis, and making initial recommendations. Initial fees typically range from £500 to £3,000 for a straightforward case, to £10,000 or more for complex multi-asset, multi-jurisdiction reviews. Initial fees are sometimes offset against subsequent ongoing fees.

Platform and Custody Charges

These typically range from 0.1% to 0.35% of assets per year, depending on platform size, services provided, and negotiated terms. Most major UK investment platforms charge a tiered percentage up to a cap — for example, 0.25% on the first £250,000, reducing at higher levels, with a total annual cap of perhaps £1,500 to £2,000. Some platforms charge flat fees, which become proportionately more competitive at higher asset levels.

Institutional custody — used by family offices and UHNW clients — is typically cheaper in percentage terms (0.05% to 0.15%) but may have minimum fees that make it uneconomic below a certain asset level.

Underlying Fund Costs

The ongoing charges figure (OCF) for actively managed funds in the UK ranges from approximately 0.5% per year for lower-cost active managers to 0.9% or more for specialist or niche strategies. Some absolute return and alternative funds charge 1% to 2% ongoing, plus performance fees.

Passive index funds and ETFs are substantially cheaper: a FTSE All-World ETF from a major provider (iShares, Vanguard, Invesco) costs approximately 0.07% to 0.22% per year. A blended portfolio of passive funds can typically be constructed with an underlying fund cost of 0.1% to 0.2% per year.

A portfolio of actively managed funds at 0.75% ongoing charges incurs roughly £7,500 per year in underlying fund costs on a £1 million portfolio, compared with approximately £1,500 for an equivalent passive portfolio. Over 20 years, compounded, that difference — before any potential outperformance by active managers — is very significant.

Performance Fees

Performance fees are common in hedge funds, private equity, and some absolute return strategies, but relatively rare in conventional wealth management mandates. The standard structure in private funds is "2 and 20" — a 2% annual management fee plus 20% of returns above a hurdle rate. In practice, many established managers charge less, and competition has compressed fees in the hedge fund sector significantly.

For private equity funds, management fees of 1.5% to 2% during the investment period, plus 20% carried interest (profit share above the preferred return, typically 8% per year), remain standard among institutional-quality managers.

Where performance fees are charged, clients should understand: the hurdle rate, the high water mark provisions, the reset period, and whether the performance fee applies to gross or net returns.

Negotiating Fees

Fees at almost every level of wealth management are negotiable for sufficiently large or complex clients. The key factors in negotiation are: total portfolio size, the breadth of services required, whether the client brings additional relationships (family members, business), and the client's willingness to consolidate assets.

HNW clients with portfolios of £500,000 or more should expect to negotiate on the adviser fee. Those with portfolios of £2 million or more should negotiate on platform fees and, where applicable, on underlying management charges for segregated or model portfolio mandates. UHNW clients with portfolios of £5 million or above typically have institutional pricing available if they are willing to engage with the process.

Conflicts of Interest in Fee Structures

The Retail Distribution Review (RDR) of 2012 prohibited commission payments to UK financial advisers on investment products, requiring all advice charges to be agreed explicitly with the client. This eliminated the most obvious conflicts in the retail market but did not eliminate all misalignments:

• A percentage-of-assets adviser has a financial incentive to keep the portfolio as large as possible, potentially discouraging clients from using capital for legitimate purposes (pension contributions, property, debt repayment, gifting)
• Some advisers recommend in-house funds or model portfolios where they or their parent company earn an additional layer of revenue
• Referral arrangements between advisers and other professionals (lawyers, accountants) can influence recommendations

Genuinely independent, fee-only advisers (those who charge only agreed adviser fees and make no additional remuneration from products) have the fewest structural conflicts.

Total Cost Illustration

For a UK investor with a £500,000 managed portfolio, a typical total annual cost might look like this:

• Adviser fee (0.75%): £3,750
• Platform charge (0.25%): £1,250
• Underlying fund costs (blended 0.6% for a mix of active and passive): £3,000
• Total: £8,000 per year (1.6% of assets)

At this rate, a portfolio earning 5% per year gross returns 3.4% net. Compounded over 20 years, the difference between a 3.4% and 5% net return on £500,000 is approximately £250,000 in terminal wealth — a very large sum.

This illustrates why fee transparency and negotiation matter, and why a client who pays 0.3% less in total costs — through negotiation, use of passive funds, or a more competitive platform — accumulates materially more wealth over a long time horizon.

How Global Investments Can Help

Global Investments provides fee-transparent wealth management services to internationally mobile HNW clients, with a clear schedule of charges agreed at the outset and reviewed annually. Our clients receive a consolidated annual cost figure covering all layers of the service, allowing genuine comparison with alternatives.

We regularly review the total cost of our clients' portfolios — including platform fees and underlying fund charges — and actively seek to deliver competitive outcomes without sacrificing quality of service or investment governance. Contact Global Investments for a review of your current wealth management costs and an assessment of alternatives.

This article is for information purposes only. Fee structures quoted are indicative ranges as of 2026 and vary across providers, client circumstances, and jurisdictions. Independent financial advice should be sought before making any changes to wealth management arrangements. The value of investments can fall as well as rise.