What does financial advice really cost?
Compare percentage-based or flat-fee pricing side by side, with honest maths and no bias.
How advice fees work
Percentage of assets (AUM)
The advisor charges a percentage of the money they manage for you. The rand amount rises and falls with the value of your portfolio.
Flat annual fee
A set annual fee based on the complexity of your situation rather than the size of your investments, common among fixed-fee advisors locally and abroad.
Once-off or hourly
A single fee for a financial plan, or an hourly rate for specific questions. Useful for one-time needs, but ongoing management isn't included.
Commission-based
The advisor is paid by product providers when you buy certain products. Legal and regulated in South Africa, but it can create conflicts of interest.
What would each model cost you?
Adjust the numbers to your situation. Either model can come out ahead, depending on your portfolio size, the fee rate, and your time horizon.
Flat annual fee
R 16 612 588
Total fees: R 3 306 595
Percentage fee (1.00%)
R 19 061 146
Total fees: R 2 194 514
The difference
R 2 448 558
The 1.00% fee ends ahead after 20 years
With a 1.00% fee against a flat fee of R 100 000 per year, year-one costs match at a portfolio of roughly R10M. Below that, the percentage fee starts cheaper; above it, the flat fee is cheaper. The longer the horizon, the more the gap compounds, in whichever direction it runs.
Both projections assume 8% annual growth before advice fees, with each model's fee deducted from the portfolio every year. The flat fee escalates at 5% per year; the percentage fee scales with your balance automatically. Provider and fund fees are excluded as they apply under both models. For illustration only. Actual returns, fees, and outcomes will vary.
When each fee model costs less
The maths has a crossover point. A percentage fee starts small in rand terms and grows with your portfolio. A flat annual fee starts as a bigger share of a small portfolio and becomes a smaller share of a large one. Below the crossover, percentage pricing usually costs less; above it, flat-fee pricing usually does.
Cost isn’t the whole picture. The quality of service you receive, and how proactively your tax, estate, and investments are managed, matters as much as the fee structure. A cheap fee for low quality advice is not a good deal.
That’s why we don’t take a side in the fee debate. We qualify every client individually and recommend the fee model that fits your unique financial and life context. See how we qualify clients on our firm’s pricing page.
Common questions about advisor fees
Investments can fall as well as rise. Past performance is not a guarantee of future returns, and you may get back less than you invested. The calculator on this page is for illustration only and does not constitute financial advice. Full regulatory disclosures are available on our FAIS Disclosure page.
Pricing built around you, not a formula.
See how we approach pricing, then book an introductory call to discuss your own numbers.
See our pricing(opens in a new tab)