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When it comes to purchasing a service, everyone wants to know that they are getting is good value for their investment. Understandably, you will want to know where your hard-earned cash is going. It is the same with financial advice.

At some point, the question of cost will always come up. But what is meant by the word ‘expensive’? Is it the fact that you may have to pay an adviser £500, £5000 or £50,000 in fees to get their advice? How expensive are these fees if the advice could help you avoid a severe pitfall caused by a possible error of judgement when running your own money? Without infrastructure, research, and the experience of a financial adviser, this may be likely, especially in a volatile economy. 

If we talk about the expense of financial advice, we must weigh up these factors and look at the risks involved by choosing to go for the cheapest options.

This article will help to clearly outline the risks involved in choosing to run your funds so you can make an educated decision as to what is best for you. 

Market tracker funds – cheap, but they may not always cheerful

For people who are looking to save extra cash by managing their money, there could be very cheap options available, quite often market trackers. With a market tracker you may well save yourself 0.5% per annum but as I discussed in my blog, The Makeup of a Successful Portfolio, you could expose yourself heavily to the ups and downs of the stock market. 

During a time like we are in now with COVID-19, market tracker funds could face particularly heavy losses. By building your portfolio cheap rather than something more sophisticated, you might save yourself maybe 0.5% per annum. However, when the FTSE 100 market dropped this year, you may have felt the FULL loss. 

This may prove to be far more expensive than paying extra for a diversified, well-researched portfolio.

An average risk in my opinion would have 40% of its money exposed to that market, which means the other 60% had a chance to recover the losses. Now that’s not to say that the entire remaining 60% made a profit. Some of it went up, some went down, and some just stayed still. 

So a diversified portfolio may be a bit more expensive. But that unquantifiable performance, which you can never quote or predict in a graph, could possibly save you from a costly mistake. 

Market funds can appear cheap on paper, but they may not always be cheerful.  

It can be scary

It’s worth noting here that although potentially better than market trackers, building a sophisticated portfolio isn’t without its own risk.

It can be scary for someone with a large sum of money to put their funds in the hands of an adviser, and rightly so. If you are going to trust someone, it is essential to find someone who, unlike a private investor, can get access to fund managers and has all the infrastructure in place to conduct thorough research in the stock markets. 

One man making his own decisions may never compare to an experienced independent adviser. An adviser with decades of experience and an entire team behind them will almost always provide better returns. It is especially true when looking at it from a risk and reward perspective.

So, is financial advice expensive? Perhaps on the surface. However, if that advice can avoid the worst possible market conditions, possibly produce better returns, AND have the potential to take less risk, is it all that costly? Or is the real expense failing to protect yourself? 

You be the judge. 

Applewood Independent

Picking a good independent financial adviser does not mean you have to go straight for the most expensive to get results. At Applewood Independent we are not the cheapest out there, but we are not the most expensive either.

It is possible to get upper-level service with us in comparison to the price of our packages. And those of our competitors too.

At Applewood Independent we have experience and infrastructure. Company founder David Pritchard has over 30 years’ experience building portfolios.

Most advisers his age work from home and do not have a team of three advisors and fourteen back-up staff.

Aside from that, I feel that in many cases being able to deal directly with company owners (like myself and David) adds an added level of service. Applewood Independent is our company, and I do feel in many cases we are more motivated than an average employee to make more money for our clients. With an average employed adviser, it is not their company they are growing, it’s somebody else’s. 

What is the real cost?

So, finding an independent advisor like us would usually be, in my opinion, less expensive than not. Just think, what really is expensive to your pension or life savings? Is it the mistake that could potentially expose you to the market, without a diverse portfolio to recover your losses?

As we know from experience, this could happen tomorrow, next month or next decade but you have still got to protect yourself with diversity and well-managed funds. For you, retirement might be a decade away, but in terms of your future, a 10% hit now on a good portfolio is far better than a 50% hit in the future. 

I hope this was useful. Feel free to email me directly for any further information at

The views expressed in this article are those of the author and do not constitute financial advice. Applewood Independent Ltd is authorised and regulated by the Financial Conduct Authority. For financial advice designed for you and your specific circumstances, please contact the author using the contact details provided in this article, or alternatively contact the Applewood Independent Ltd office on 01270 626555.

“Your capital is at risk, you may get back less than you originally invested”