Advice fee definitions

20 terms

• Adviser charge
  An adviser charge is the fee you agree with a financial adviser for investment or pension advice, set by the firm and paid by you rather than by a product provider as commission.
• Adviser charging (RDR)
  Adviser charging is the system, in force since 31 December 2012 under the FCA’s Retail Distribution Review (RDR), in which investment advice is paid for by the client under the firm’s own published charges, not by provider commission.
• Contingent charging
  Contingent charging means the adviser is paid only if you go ahead with what they recommend; the FCA banned it for defined benefit pension transfer advice from 1 October 2020, with narrow exceptions.
• Costs and charges statement
  An annual costs and charges statement, also called an ex-post statement, shows what you actually paid over the past year for adviser, platform and fund costs, in pounds and as a percentage of your investments.
• DFM and MPS fees
  A DFM or MPS fee is the charge for a discretionary fund manager, or a model portfolio service, choosing and rebalancing your investments, and it is paid in addition to the adviser charge, platform fee and fund charges.
• Facilitated adviser charge
  A facilitated adviser charge is an adviser fee that your pension or investment provider deducts from your pot and pays to the adviser on your instruction, so you never write a cheque for it.
• Fee-only adviser
  "Fee-only" describes an adviser paid only by their clients, never by product commission; in the UK, every adviser giving investment or pension advice has worked this way since the Retail Distribution Review in 2012.
• Fixed-fee advice
  Fixed-fee advice is priced as a set amount in pounds for a defined piece of work or service, so the cost does not rise with the size of your pension or investments.
• Hourly-rate advice
  Hourly-rate advice is charged for the time an adviser spends on your case, and the FCA expects a firm to say whether its rates are indicative or actual and how many hours the work will roughly take.
• Independent and restricted advice
  An independent adviser must consider a sufficient range of products from across the market without bias; a restricted adviser is limited to certain providers, products or types of advice, and must tell you so.
• Initial adviser charge
  An initial adviser charge is the one-off fee for the first piece of advice work, such as reviewing your finances and recommending what to do, quoted as a percentage of the money advised on or as a fixed sum.
• Minimum investment and minimum fee
  Many UK advice firms set a minimum: either a minimum amount of money they will advise on, or a minimum fee that applies however small the amount, so a percentage quote can cost more in pounds than it first appears.
• Ongoing adviser charge
  An ongoing adviser charge is a recurring fee for a continuing advice service, usually a percentage of your investments taken each year, which a firm may charge only while it provides that service.
• Ongoing charges figure (OCF)
  The ongoing charges figure, or OCF, is a fund’s yearly running cost expressed as a percentage of the money invested in it, taken inside the fund price rather than billed to you.
• Platform fee
  A platform fee is the charge made by the service that holds and administers your pensions and investments, usually a percentage of their value each year, and it is separate from both the adviser charge and the funds’ own charges.
• Subscription and retainer advice
  A subscription or retainer is a regular fixed payment, monthly or yearly, for an ongoing advice service, set in pounds rather than as a percentage of the money the adviser looks after.
• Suitability report
  A suitability report is the document in which an FCA-authorised adviser must explain, in writing, why the recommendation they are making suits your circumstances, objectives and attitude to risk.
• Targeted support
  Targeted support is a form of help, in force since 6 April 2026, in which an authorised firm such as a pension provider can suggest options designed for groups of people with similar circumstances, without giving personal advice.
• Total cost of advice
  The total cost of advice, sometimes called total cost of ownership, is everything you pay each year for advised investing: the adviser charge, the platform fee and the fund charges added together.
• VAT on financial advice
  It depends on what the fee pays for: advice that leads to arranging a financial product is generally exempt from VAT, while standalone advice or a report with no product arranged can be charged at the standard 20% rate.

General information only, not regulated financial advice or a personal recommendation. FinancialAdvisor.co.uk is not authorised or regulated by the Financial Conduct Authority. Figures are labelled with their source and date; they describe the market, not any firm, and are not quotes. Spotted an error? Report it and we will correct it.