Author: Daniel Thompson

One of the first questions people think about when it comes to financial advice is ‘how much does a financial advisor cost?’ That’s usually followed by ‘is it worth it?’ I’ll help answer the first question in this article, and explain the different pricing options that advisors use.

So just how much does a financial advisor cost these days?

In short, the cost can range quite a lot depending on your circumstance. The average initial/upfront cost is around $3,500 (based on a survey by Adviser Ratings), with the average ongoing costs being $3,000-$4,000 per year. Many advisers will also have minimum costs or asset values to take on a client.

For those of you that want to delve deeper, we will go through the pricing methods that financial advisors use so you can get a bit of an idea of the costs for you. The cost of working with a financial advisor is usually based on:

• The types of services & advice being sought
• How simple or complex your situation is
• The type of fee structure that the advisor uses

Let’s go through these points in more detail!

Types of Financial Advice Services

The services that financial advisers offer generally fall into the below:

• Strategy Analysis & Scenario Comparisons – this is where an adviser will compare a number of different strategies & scenarios to help achieve your goals. This could be things like paying more off your home loan vs investing, whilst also factoring in holidays & having a family.
• Financial, Retirement & Investment Planning – sometimes called ‘financial product advice’, this is where the rubber hits the road. An advisor will compare & recommend the right investments, funds & accounts to achieve the outcome you desire.
• Investment Management: once your investments are up an running, many advisors offer the service to man age the investment, make sure it remains aligned with your goals & preferences, and course correct if things start to veer off.

Example: 
Emma, a young professional, sought advice on managing her superannuation. A few focused sessions provided her with a clear plan to maximize her contributions, costing her less than more comprehensive services. 

Are your finances simple or complex?

The complexity of your financial situation significantly impacts the cost of advice. 

• Simple Situations: If your finances are straightforward—think single income, minimal debt, and basic investments—you’ll likely pay less. Advisors can address your needs efficiently in less time than more complex scenarios. 

• Complex Situations: On the other hand, if you own multiple properties, run a business, or manage international investments, your advisor will need to dedicate more time and expertise, which increases costs. 

Example: 
James, a self-employed consultant with diverse income streams, needed help navigating tax obligations, super contributions, and an investment strategy. His advisor developed a customised plan, but the detailed analysis came with a higher price tag. 

Fee Structures

Advisors typically charge fees in one of three ways: 

Fixed Fees 

Fixed fees offer clarity, and can range from $3,000 to $15,000 annually. This model works well for those seeking a comprehensive financial plan with no surprises. 

Asset-Based Fees 

Under this structure, advisors charge a percentage of the assets they manage, usually 0.5% to 1% annually. This model aligns the advisor’s interests with your investment growth but can become expensive as your portfolio grows. 

Hourly Rates 

For clients needing targeted advice, hourly rates (usually between $220 to $550 per hour) provide flexibility. This is ideal for one-off consultations or addressing specific financial challenges. 

Example: 
Tom, a startup founder, opted for hourly advice when structuring his business assets. He received expert guidance without committing to ongoing fees. 

How to choose the right advisor

Finding the right financial advisor is as important as understanding the costs. Here are some tips: 

1. Check Qualifications and Experience 
   Make sure the advisor is at a minimum degree qualified, ideally with a Masters or is a Certified Financial Planner (CFP). 

2. Ask About Their Fee Structure 
   Make sure the advisor is transparent about their pricing. There are no right or wrong ways for an advisor to charge for their professional services, however you want to know everything that is involved, what it will cost you and when payments are required. 

3. Assess Compatibility 
   Your advisor should understand your goals and communicate in a way that resonates with you. You may end up working together for many years, so you want to gel & enjoy your time together. 

4. See what professional associations they are part of 
   The main association in Australia is the Financial Advice Association Australia (FAAA). Subscription to these associations show the adviser is at the forefront of the profession. 

Conclusion – How much does a Financial Advisor cost?

So in summary, how much does a financial advisor cost? Most advisors will charge $3,000-$5,000 for the initial advice, and a similar amount each year for ongoing advice. At New Era we do things a little differently – we have a monthly membership where most people pay between $149 & $199/mth out of pocket, and an initial Financial Blueprint plan for $1,400.

Hiring a financial advisor isn’t just about managing your money; it’s about building a secure future. Whether you’re navigating life’s milestones or optimising a complex portfolio, the right advice can deliver returns far beyond the initial cost. I believe everyone should have a financial plan, but not everyone necessarily needs a financial advisor. Use the information in this article to assess different ones and when you are ready choose the right advisor for you!

FAQs – How much does a Financial Advisor cost?

Money—it’s something we all deal with daily, yet so many of us struggle to feel truly in control of it. Have you ever wondered why your financial goals feel just out of reach, no matter how hard you try? Chances are, some sneaky money habits are holding you back. These are money habits keeping you poor! The good news? A few small changes can make a massive difference.

At New Era Financial Planning, we’ve worked with countless individuals and families to help them identify these roadblocks and create a clear path to financial independence. Let’s dive into the 7 most common money habits that might be keeping you stuck—and how to turn them around.

1. Paying Yourself Last
Imagine this: You’ve worked hard all month, paid the bills, bought groceries, and splurged a little on the weekend. By the time you think about saving, there’s nothing left. Sound familiar?

This is what happens when you pay yourself last. Instead, flip the script and pay yourself first.

Think of saving as planting seeds for your financial future. By prioritizing your savings and investments before covering other expenses, you’re setting yourself up for long-term growth. Start small if you need to—automating just 10% of your income into a savings or investment account can make a world of difference over time.

2. Carrying Bad Debt
Bad debt is like carrying a heavy backpack on a long hike—it slows you down and drains your energy. This includes high-interest credit card balances and buy-now-pay-later services like Afterpay. While these options may seem convenient, the interest and fees can quickly pile up, keeping you in a cycle of payments.

To break free, start by paying off high-interest debt first (the “avalanche” method) or tackle smaller debts to build momentum (the “snowball” method). And remember, not all debt is bad—borrowing to invest in your education or a home can be a smart move, but it’s essential to keep it manageable.

3. Not Having a Cash Reserve
Life is full of surprises. Whether it’s an unexpected car repair or a sudden job loss, not having a financial safety net can lead to stress and additional debt.

That’s why building a cash reserve is so important. Aim for 3-6 months of living expenses tucked away in an easily accessible account. Think of it as your financial umbrella—it doesn’t stop the rain, but it keeps you from getting soaked.

If saving that much feels overwhelming, start with a smaller goal, like $1,000, and build from there. Every little bit helps.

4. Not Knowing Your Financial Position
Do you know exactly where your money goes each month? If not, you’re not alone. Many people feel in the dark about their finances, which makes it hard to take control.

Start by tracking your income and expenses. Use an app, a spreadsheet, or even a notebook—it doesn’t matter how, as long as you do it. Think of this as creating a roadmap. If you don’t know where you are, it’s impossible to plan how to get where you want to go.

Once you understand your spending habits, you’ll be able to make informed decisions about where to cut back and where to allocate more funds.

5. Having High Fixed Costs
Fixed costs—like rent, car payments, and subscriptions—are the financial equivalent of being locked into a treadmill. They keep you running in place, leaving little room to save or invest.

Take a close look at your fixed expenses. Are there areas where you can cut back? For example:
Could you downsize your living space?
Can you refinance a loan for a better rate?
Are you paying for subscriptions you don’t use?

Reducing these costs can free up funds to focus on your financial goals. Remember, every dollar you save on fixed expenses is a dollar you can redirect toward building wealth.

6. Not Increasing Your Income
While cutting costs is essential, increasing your income can supercharge your financial progress. Many people overlook this side of the equation, but it’s one of the most effective ways to create financial freedom.

Consider ways to boost your income:
Ask for a raise or promotion at work.
Take on a side hustle, like freelancing or tutoring.
Invest in skills or education that can lead to higher-paying opportunities.
Think of increasing your income as adding fuel to your financial engine—it gets you where you want to go faster. Just make sure to channel that extra cash into savings, investments, or debt repayment, rather than lifestyle upgrades.

7. Waiting to Invest
One of the biggest myths about investing is that you need a lot of money to start. The truth? The earlier you begin, the more time your money has to grow.

Think of investing like planting a tree. The sooner you plant, the longer it has to grow and the more shade it will provide in the future. Even small contributions can grow significantly over time thanks to compound interest.

Start with what you can, even if it’s just $50 a month. The key is to get started. Over time, you can increase your contributions as your financial situation improves.

Breaking Free from Bad Money Habits
Here’s the thing—everyone makes financial mistakes. The important part is recognizing these habits and taking steps to change them. At New Era Financial Planning, we’re here to help you do just that.

By addressing these seven money habits, you’ll not only free yourself from financial stress but also set yourself on a path to achieving your goals—whether it’s buying a home, starting a family, or retiring comfortably.

Remember, financial independence isn’t about perfection; it’s about progress. Take it one step at a time, and celebrate every small win along the way.

When it comes to planning for retirement, your superannuation is one of the most valuable assets you’ll ever own. Despite this, many Australians miss out on tens of thousands of dollars by making avoidable super mistakes. These oversights can have a significant impact on your retirement savings, and understanding how to sidestep them can make all the difference to your financial future.

At New Era Financial Planning, we’re dedicated to helping you make informed decisions that set you up for the retirement you’ve always dreamed of. In this article, we’ll explore five crucial super mistakes that many Australians make – and, importantly, how you can avoid them.

1. Ignoring or Not Knowing: The Most Common of the Super Mistakes!

One of the most common super mistakes is simply not knowing the details of your super fund. Many Australians have little idea of which fund they’re with, how their super is invested, or what their current balance is. This lack of knowledge often leads to missed opportunities to grow your savings, reduce fees, or increase your returns.

Why This Mistake Costs You

Without awareness of your super, you miss out on potential returns and may even face unintended fees or poor investment outcomes. Not knowing your balance or investment strategy could also mean that your fund isn’t aligned with your goals, leaving your retirement planning to chance.

How to Avoid This Mistake

• Check Your Balance Regularly: Set up online access with your super provider to easily check your balance, investment options, and performance.
• Review Investment Options Annually: Super funds often offer a range of investment options, from conservative to aggressive. Make sure your chosen option reflects your risk tolerance and long-term goals.
• Engage with Your Super Fund: Most funds provide annual statements that outline your balance, fees, and performance. Taking the time to read these statements can make a huge difference in keeping your super on track.

2. Having Multiple Super Funds

Many Australians have multiple super accounts from different jobs over the years, resulting in duplication of fees and sometimes even underperforming funds. Every extra super account means additional fees, often with no added benefit.

Why This Mistake Costs You

When you hold multiple super funds, each one charges fees. These fees might seem small on their own, but over time they can erode your retirement savings. Plus, multiple accounts make it harder to keep track of your superannuation, leaving you open to mismanagement.

How to Avoid This Mistake

• Consolidate Your Super Accounts: Using the Australian Taxation Office’s (ATO) online services, you can easily consolidate your super into a single account. This saves you from unnecessary fees and simplifies the management of your super.
• Choose Your Best Fund: When consolidating, pick the fund that best aligns with your goals, has a strong performance history, and reasonable fees.
• Seek Advice if Needed: If you’re not sure which fund to choose, a financial planner can help you assess your options and make a choice that’s best for your future.

3. Having an Underperforming Super Fund – The Cardinal Sin of Super Mistakes!

Not all super funds are created equal, and some consistently underperform compared to others. An underperforming fund can cost you tens of thousands of dollars over the life of your investment, leaving you with less money in retirement.

Why This Mistake Costs You

If your super fund underperforms, you miss out on the compounding returns that can significantly boost your retirement savings. Over time, even a small difference in annual returns can add up to thousands of dollars.

How to Avoid This Mistake

• Compare Fund Performance: Use resources like the ATO’s MySuper comparison tool or independent financial research platforms to see how your fund’s performance stacks up.
• Switch to a Better Fund if Necessary: If your current fund consistently underperforms, consider switching to one with a proven track record. Remember to weigh performance against fees – the two go hand-in-hand.
• Review Performance Annually: Superannuation is a long-term investment, so an occasional dip in performance is normal. However, if your fund underperforms year after year, it might be time to switch.

4. Being in a Fund with Overly High Costs

All super funds charge fees, but some charge much more than others. High fees can eat into your investment returns and reduce the money you have available for retirement.

Why This Mistake Costs You

While fees are necessary for the administration and management of your super fund, excessive fees can erode your investment growth. These fees might be for management, insurance, or other hidden costs that add up over time.

How to Avoid This Mistake

• Understand All Fees Involved: Check your annual super statement for details on fees. Look for administration fees, investment management fees, and any hidden charges.
• Compare Funds Based on Fees and Performance: When choosing or reviewing your super fund, look for one with a reasonable balance of performance and fees. The right combination can maximize your returns over the long term.
• Consider Moving to a Low-Fee Fund: Some funds, like industry super funds, tend to have lower fees. If you’re paying high fees for poor performance, it may be time to switch.

5. Not Making Extra Contributions

Relying solely on employer contributions might not be enough to provide the retirement lifestyle you desire. Failing to make additional contributions, even modest ones, can leave you short of your retirement goals.

Why This Mistake Costs You

Employer contributions alone may not be enough to grow your super balance significantly, especially when you consider inflation and rising life expectancies. Without extra contributions, you might need to work longer or adjust your retirement plans.

How to Avoid This Mistake

• Make Voluntary Contributions: Adding to your super via salary sacrifice or after-tax contributions can help boost your balance. Even small amounts can grow substantially over time.
• Consider Spouse Contributions: If you have a spouse with a low super balance, making contributions on their behalf can increase your household’s overall retirement savings.
• Set a Target and Plan Regular Contributions: Setting aside a portion of your income each month can make a big difference in the long run.

Conclusion

Your superannuation is one of the most important assets you’ll have in retirement. Avoiding these common super mistakes can help you maximize your super, reduce unnecessary costs, and ultimately achieve a more comfortable retirement. At New Era Financial Planning, we’re here to provide the guidance and expertise you need to navigate your super with confidence.

For personalized advice on how to optimize your super, reach out to us today. It’s never too early – or too late – to take control of your financial future.

FAQs – Super Mistakes & How to Avoid Them

Q: How often should I review my superannuation fund?

A: Ideally, review your super annually or whenever there are major life changes, like a new job. Regular reviews help ensure your fund is performing well and remains aligned with your goals.

Q: Can I have more than one superannuation fund?

A: Yes, you can, but having multiple funds often leads to extra fees and complexity. Consolidating into one well-chosen fund can simplify your super and reduce costs.

Q: How can I compare super funds effectively?

A: There are online comparison tools provided by the ATO and other financial platforms. Look for funds that have a good balance of performance, fees, and alignment with your risk tolerance.

Q: What is the benefit of making extra contributions to my super?

A: Extra contributions, whether through salary sacrifice or personal contributions, can significantly boost your retirement savings over time due to the power of compound interest.

Q: What happens if I choose an underperforming fund?

A: If your super fund consistently underperforms, it can reduce your retirement savings. Comparing funds and switching to a better-performing option can help you avoid this loss.