Financial Planning Resources

Why do financial planning fees seem so confusing?

If you’ve ever looked up financial planning costs, you’ve probably encountered a range of different pricing structures. Some firms charge hourly rates, others charge fixed fees, and some operate on percentage-based fees or even monthly subscription models. It’s no wonder people find it difficult to compare their options.

The truth is, there isn’t a one-size-fits-all approach to charging for financial advice. The structure a firm uses often depends on the type of work they do and the kind of clients they serve.

For example:

• Percentage-based fees: Often used by investment managers, these fees are a percentage of the assets managed. While easy to understand, they can become expensive over time, particularly if your wealth grows significantly.
• Hourly rates: This model allows for more flexibility, but it can be hard to predict how much work will be required, leading to uncertainty over final costs.
• Fixed fees: This provides clarity, as clients know exactly what they are paying from the outset. However, these fees vary depending on the complexity of your financial situation.

At Yellowtail, we favour a fixed-fee approach that reflects the complexity of your financial planning needs. This ensures transparency and fairness, allowing clients to budget without worrying about unexpected charges.

The real cost of high fees

While financial planning is an investment in your future, it’s essential to understand how fees impact your long-term financial health. Where a small percentage of your investment may seem insignificant, the higher percentage charges of some of the larger wealth management firms make a substantial difference on the value of your investments.

I regularly use the graph below to illustrate the impact fees have on your portfolio:

In short, ff you invest £1,000 at a 7% return over 40 years

• 1% fee per year: You lose about a third of your total investment value to fees.  (However, if this 1% includes not just advice but also platform and fund charges, I’d see this as a fair and reasonable cost for the value received).
• 2% fee per year: You lose around half of your investment value.
• 3% fee per year: You lose two-thirds of your money to fees.

The key takeaway? Be aware of what you’re paying and make sure you’re actually getting something worthwhile in return.

What do you actually get from a financial planner?

If cost is stopping you from reaching out to a financial planner, remember this: your first meeting should always be free. That means you get a chance to see if financial planning is a good fit for you—at no cost.

But what’s the real value of working with a planner? Let’s break it down:

• Keeping you accountable

A well-structured financial plan keeps you on track towards your goals. Many people start with good intentions but struggle to stay disciplined when the markets fluctuate, or life throws unexpected challenges their way. A financial planner serves as your accountability partner, helping you avoid knee-jerk reactions that could derail your financial future.

• Helping you stay calm when markets get rocky

Markets go up and down—it’s an unavoidable reality. Yet, history shows that those who stay invested during downturns typically come out ahead. Without professional guidance, it’s easy to panic and make costly mistakes. As one of our favourite analogies goes: Everyone has a plan until they get punched in the face. A good financial planner helps you stick to the plan, even when things feel uncertain.

• Supporting you through life’s ups and downs

Financial planning isn’t just about investments—it’s about ensuring your finances support the life you want to live. Whether it’s preparing for retirement, managing an inheritance, or navigating major life changes like illness or divorce, having a trusted expert by your side can make all the difference.

• Saving you time and reducing stress

Most people don’t have time to research tax laws, investment strategies, and pension rules. A financial planner takes that weight off your shoulders so you can focus on what truly matters.

• Making sure your money works harder for you

Sometimes, small changes can make a big difference. Whether it’s structuring your savings more tax-efficiently, reducing unnecessary fees, or ensuring your investments align with your risk tolerance, a financial planner’s expertise can improve your financial position over time.

Are you paying a fair price?

At Yellowtail, we believe in straightforward, transparent pricing. Our fixed-fee model means you always know what you’re paying upfront. Plus, we don’t charge for routine transactions like ISA contributions—because why should we?

We also won’t take you on as a client if we don’t think we can add significant value to your financial situation. In fact, we often talk to people who, after discussion, realise they don’t actually need financial planning right now. We’re happy to provide guidance on what they can do independently and suggest when it might be beneficial to come back to us in the future.

Final thoughts: cost shouldn’t be a barrier

If you’re worried about cost, here’s a thought: the right financial planner should clearly explain their fees and prove their value. No hidden charges, no vague answers—just an open conversation about what they do and how it helps you.

A good financial plan isn’t just about investments. It’s about giving you confidence, reducing stress, and helping you make smarter money decisions. That’s why we love what we do at Yellowtail.

If you’re curious about financial planning and whether it’s right for you, we’d love to chat—no strings attached. You can book a complimentary Discovery Meeting here.

ABOUT YELLOWTAIL

Founded by Dennis Hall, Yellowtail are the trusted financial planners who advise affluent individuals & families in the South West and across the UK. Yellowtail’s experts provide the clarity, control and confidence to guide you through financial planning, estate planning, pension transfers and investment management directing your journey towards a prosperous retirement and financial peace of mind.