Expert financial planning is extremely valuable. But, as with any other product or service you pay for, you shouldn’t pay more than you need to.
To put it bluntly, financial planning can be very expensive. Why? Because most planning firms charge so-called ad valorem fees. In other words, the client pays a percentage of their investable assets each year — typically between 0.8 and one per cent.
Those may seem like small figures but, because of the effect of compounding, they can make a very substantial difference to your eventual net returns.
Say, for example, you’re paying one per cent on a portfolio worth £1 million. That’s £10,000 a year. Remember as well that you pay that one per cent every year, and the amount will rise in line with the size of your portfolio.
Over a lifetime of investing, a one per cent fee typically accounts for 25% of the value of your retirement pot.
“Over a lifetime of investing, a 1% fee typically accounts for 25% of the value of your retirement pot.”
Here at Second Life Financial Planning, our view is that ad valorem fees are outdated and consumers deserve better.
Our aim is to disrupt the status quo and make financial planning more affordable.
For some people it may well be worth paying a financial planning firm to manage their assets on an ongoing basis. But not everyone wants to or needs to. Some are perfectly happy to manage their own investments. Others, for whatever reason, don’t have the minimum amount of investable assets that firms require to take a client on.
That’s why we offer an alternative. Instead of charging ongoing fees, we provide clients with a financial planner and a comprehensive financial plan and leave them to manage their own investments.
You have the option to work with a regulated financial advice firm if you need advice about specific products, or with a non-intermediating financial coach or mentor if you don’t. The choice is yours. But you only pay for financial planning, and you won't cost you any more than it would if you went to the planner directly.
“There are no hidden fees or charges, and you know, in advance, exactly what you’re paying.”
How much you pay depends on the complexity of your case and the work involved. There are no hidden fees or charges, and you’ll be told in advance what the cost will be.
You can, if you want, go back to your planner if you need help in the future. But because you’ll be managing your own investments, you won’t have to pay ongoing fees for asset management.
It’s a simple, transparent charging model designed to give more people access to the proper financial planning they need.
Please note, Second Life Financial Planning provides expert financial guidance, not regulated financial advice. We refer clients requiring advice on specific financial products to firms, authorised by the Financial Conduct Authority, that share our evidence-based investment philosophy.