The average ongoing advice fee is up nine basis points from 2023, with a growing share of advisers charging between 91 and 100 bps for ongoing advice, NextWealth has revealed.
The consultancy’s latest fee benchmarking report, published today (25 March), shows that asset-based fee structures are used by 70% of financial advisers.
Fixed fees are the second most common model, used by 29%, while subscription fees continue to gain traction slowly.
However, 57% of adviser respondents to the survey said they ‘never’ use subscription fees and a further 6% ‘rarely’ use them.
Fee structures used by advice firms
Proportion of clients for whom advice fees have increased in the past 12 months
There was a lot of discussion about cap and collar models in the lead-up to the implementation of the Consumer Duty in July last year.
While capped fees would only apply to wealthier clients, they are used by 66% of financial advisers at least ‘sometimes’.
The report suggested clients paying fixed fees are more likely to say they represent good value and 19% more likely than those paying asset-based fees to say they receive excellent value for money.
Younger investors, under age 55, tend to prefer fixed fees, while clients over 55 prefer asset-based charges.
The report also showed a marked increase in the variety of fee structures used by financial advisers, specifically subscription, capped and hourly rates.
NextWealth said this trend is primarily driven by larger advice firms.
Single-adviser firms are 18% more likely to always or mostly charge based on a percentage of assets compared to firms with 10 or more advisers.
Responses from 2025 and 2024 revealed that firms with more than six advisers are more likely to offer a range of options.
They are also less likely to primarily use a ‘percentage of assets’ fee structure.
Following the introduction of the Duty, more firms have been defining their target market and establishing clear client segments.
However, 38% of respondents indicated they do not have specific client segments, despite often applying different charges based on asset value.
The survey confirmed that financial advice clients understand the fees they pay and value the services provided.
Around 85% of clients say they understand the fees they pay, and 76% believe they receive good value for money.
Consumer understanding of the fees paid for managing their investments
NextWealth managing director Heather Hopkins said the financial advice market is under “increasing scrutiny”, with regulatory change, consumer expectations and competitive pressures “reshaping how firms set and justify their fees”.
“Financial advisers need to strike a delicate balance, ensuring profitability while demonstrating value to clients,” she said.
“This report helps advisers strike that balance by providing independent fee benchmarks and defining the aspects of advice most valued by clients.
“While the regulator is focused on value, the cost of delivering advice is mounting. This has forced many firms to increase their fees.
“Despite this, more than three quarters of advised clients say they receive good value for money.”
Hopkins said the report shows transparency and openness are key to evidencing value.
“Clients told us they expect more personalised advice and improved communication when fees rise,” she added.
“It also demonstrates that well-informed clients are happy clients. The more familiar clients are with financial concepts, the higher the perceived value of advice.”
