What actually changes when your adviser charges a fixed fee rather than a percentage of your investments — for the cost, the advice and the relationship.
Many financial advisers charge an annual percentage of the money they manage.
One per cent sounds modest. The pound figure can look rather different.
The fee usually rises and falls with the portfolio. If the investments grow, the adviser's fee grows with them.
That does not automatically make the fee unfair. The question is whether the cost in pounds remains proportionate to the work, complexity and responsibility involved.
A £2,500 fee for a £250,000 portfolio may be entirely reasonable.
A £10,000 fee for a £1 million portfolio deserves a closer look — particularly if the work being done has not materially increased as the portfolio has grown.
The 1% figures above are simple illustrations. Percentage-based adviser fees vary and may be lower or higher.
Investment arrangements usually contain three separate charges.
The amount paid for financial planning, advice, reviews, implementation and ongoing support. This may be a fixed amount or a percentage of the portfolio.
The cost of the administration system used to hold pensions, ISAs and investments. This is normally charged separately from the adviser fee.
The charges inside the funds or portfolios themselves. These apply whether the adviser charges a fixed fee or a percentage.
When comparing advisers, compare like with like.
A fixed adviser fee should be compared with the existing adviser fee, rather than with every cost attached to the portfolio.
Ask for the annual amount in both percentages and pounds:
Neither charging model guarantees good advice.
Both can be fair. Both can become poor value.
The important difference is what causes the price to change.
The adviser receives a percentage of the portfolio being managed.
The fee adjusts automatically and may provide an accessible way to pay for advice on a smaller portfolio.
Does the work involved genuinely increase in proportion to the portfolio?
The adviser agrees a pound fee based on the work, complexity and ongoing responsibility involved.
The fee does not automatically increase simply because markets have risen or more money has been invested.
Does the fixed fee still represent fair value for the work being delivered?
Most advisers are honest, competent and interested in doing the right thing for their clients.
A charging model does not determine whether advice is suitable. Regulation, professionalism and the adviser's judgement all matter.
It is still reasonable to understand how the adviser's income changes when particular decisions are made.
Using £100,000 from an advised portfolio reduces a 1% adviser fee by £1,000 a year. Under a fixed-fee model, the fee would normally be unchanged unless the work became simpler.
A substantial gift removes money from the portfolio and may reduce a percentage-based fee. That does not make gifting correct, but the decision should be judged on affordability, tax, family circumstances and the wider plan — not on where the assets remain.
Using part of a pension to buy an annuity may remove money from the advised portfolio. For some households, guaranteed income may still be the right planning decision.
A retirement plan may show that someone can safely spend more during their healthier years. A good adviser should be comfortable recommending that, even where the portfolio becomes smaller as a result.
Not every pound needs to sit inside an investment portfolio. The right answer may be to retain cash, repay borrowing, invest in a business or buy property. Each decision should be tested against the whole financial plan.
Consider an illustrative client retiring at age 60 with a £2 million portfolio.
The investments, withdrawals and planning needs are identical. Only the adviser's charging method changes.
The adviser fees are deducted from the portfolio in both illustrations. Platform and investment costs are excluded because they are assumed to be the same under both arrangements.
The final-portfolio difference is larger than the fee difference because money not deducted in fees remains invested.
Illustrative calculation only. Real returns, withdrawals, inflation, adviser fees and investment values will vary. The example is not a forecast or personal recommendation. A lower percentage fee or a higher fixed fee would reduce the difference.
A fixed fee is not automatically the cheapest option.
It tends to become particularly relevant where the portfolio has grown faster than the work required to advise on it.
A percentage that looked reasonable at £250,000 may look very different once the portfolio reaches £1 million. The portfolio may have quadrupled, but the amount of work involved may not have.
Business owners and retirement-stage families often need work across:
The portfolio is only one part of that work.
The right advice could involve repaying debt, buying secure income, gifting money, holding cash or using assets elsewhere. A fixed fee allows those choices to be considered without the adviser's income automatically changing.
A fixed pound fee makes it easier to decide whether the ongoing relationship remains worth what it costs.
Fixed-fee planning can support a smaller number of deeper client relationships, where the same adviser remains involved over time.
There are circumstances where a percentage-based fee may be simpler or less expensive.
A fixed fee has to cover a minimum amount of professional time. For a portfolio of around £250,000, with straightforward requirements, a modest percentage fee may produce a lower pound cost than a planning-heavy fixed-fee service.
The comparison becomes less straightforward as the portfolio grows, particularly where the work involved does not grow with it.
Some clients primarily want discretionary investment management, active portfolio construction or a specialist investment mandate. Where the value being purchased is mainly investment management, a percentage of the portfolio may be a logical way to price it.
A percentage-based fee should not be judged by the percentage alone. A lower percentage on a larger portfolio may still represent reasonable value where the work and responsibility justify the pound amount.
Someone with settled finances, no business, little tax complexity and few major decisions ahead may not need a planning-heavy service.
Some people prefer not to receive a separate invoice or fund the fee from income. A percentage-based fee deducted from the investments may feel administratively easier.
Removing the link to portfolio value does not remove the need to demonstrate value.
A good fixed-fee relationship should make the work clear.
A cashflow-based plan connecting the household, business, pensions, investments, tax position and future income.
Allowances, company extraction, pension contributions and account structure considered against the wider plan.
A clear approach to cash reserves, secure income, portfolio withdrawals and how spending may change over time.
Appropriate portfolios, platform oversight, rebalancing and ongoing suitability. Investment management remains important. It is simply not the whole service.
Working alongside accountants, solicitors and tax specialists so that the advice joins up.
Access when circumstances change or a material decision cannot wait until the next formal review.
Documented advice, regulated implementation, record-keeping and periodic review.
Ask for adviser, platform and investment charges to be shown separately.
The adviser should be able to explain the work, meetings, planning, investment oversight and access included.
Ask what happens if:
Will the same adviser attend meetings, write the recommendations and respond when something changes?
Understand whether the cost changes with the assets, inflation, complexity, service or the adviser's wider pricing structure.
A good adviser should be able to explain when their service or charging model would not be the right fit.
Use the latest valuation, adviser agreement and platform statement.
What work, access or responsibility would actually change under the alternative arrangement?
Chapter3 charges fixed fees for the initial planning and the ongoing relationship that follows.
The fee reflects the complexity of the position and the work involved.
It does not automatically increase because markets have risen or more money has been invested.
A one-off fee for building the plan, making the recommendations and putting the agreed structure in place.
A fixed monthly fee based on the planning complexity and the work required during the year.
Most Chapter3 clients currently sit between £300 and £500 per month.
Higher fees may apply where the work involves business exits, multiple companies, trusts, significant family wealth, complex estate planning or extensive professional coordination.
The exact fee is agreed in writing before any work begins. Platform and investment charges remain separate and are shown clearly.
Fees shown are current at June 2026 and may change. The current website fee page should remain the definitive published schedule.
The worked example compares only the adviser charging method.
It assumes:
The example is designed to demonstrate how charging methods behave over time. It is not intended to show what any specific client will pay or achieve.
Some percentage-based advisers charge materially less than 1%. Some fixed-fee clients require a fee materially higher than £6,000 a year.
This guide is general information and does not constitute personal financial advice. Investments can fall as well as rise, and clients may receive back less than they invest. Past performance is not a reliable guide to future returns. Tax treatment depends on individual circumstances and may change.
Chapter3 Financial Planning Ltd is an Appointed Representative of ValidPath Limited. ValidPath Limited is authorised and regulated by the Financial Conduct Authority under FRN 197107. Chapter3 Financial Planning Ltd appears on the FCA Register under reference number 931195.
Regulatory wording and calculations should be checked before final publication.
You do not need to be unhappy with your adviser to ask the question.
Perhaps the portfolio has grown, the business has been sold or the annual percentage now produces a very different pound figure from the one you originally agreed to.
A 30-minute conversation is usually enough to:
If the current arrangement still looks sensible, I will say so.
If the fees, planning or service appear out of line, we can discuss what a different arrangement might look like.