7 compelling reasons to choose fee-based financial advice

The way you pay your financial adviser can have a direct impact on the quality of the advice you receive. While commission-based models remain common in South Africa, more investors are considering fee-based advice, where you pay a clearly disclosed fee for ongoing services. Here’s what to know about fee-based advice:

Your success and your adviser’s success are linked: In a commission-based model, advisers are paid by product providers, which can create a conflict of interest. With fee-based advice – especially where fees are linked to assets under management (AUM) – your adviser’s income grows only when your portfolio grows. This creates a natural alignment of interests: advisers are incentivised to protect and grow your wealth, avoid unnecessary risk, and make decisions that serve your long-term goals.

 You get support when you need it most: A professional fee model accommodates the natural ebb and flow of your financial needs. During the COVID-19 years, for example, client engagement surged as markets turned volatile and uncertainty grew. By contrast, in calmer times, meetings may be less frequent. Major life events – such as retiring and downscaling your home – can trigger an intense period of work that may include cashflow modelling, estate restructuring, retirement scenario planning, investing proceeds, structuring annuity and investment withdrawals, and updating wills. A fee-based model ensures you have access to your adviser during both high-demand and quieter phases without renegotiating fees each time.

Transparent and predictable costs: Fee-based advice is straightforward. The cost is clearly disclosed – either as a percentage of your investments or a fixed amount – with no hidden commissions, rebates, or incentives from product providers. This makes it easier to understand exactly what you’re paying, compare costs between advisers, and assess the value you receive. In our experience, transparency builds trust, which is the foundation of a strong adviser–client relationship.

 A long-term partnership, not a once-off transaction: In our practice, financial planning is a process, not an event. Your circumstances, goals, and priorities will change over time, and so should your financial plan. An ongoing fee arrangement ensures regular reviews, progress tracking, and adjustments when life changes. This consistency helps maintain momentum, allows for proactive problem-solving, and deepens the trust between you and your adviser.

Access to holistic advice without extra bills: A well-structured professional fee covers far more than investment management. It often includes retirement planning, estate planning, tax efficiency strategies, and risk protection. You can approach your adviser with questions about any financial decision – from selling a property to handling an inheritance – without worrying about an hourly clock ticking in the background. Importantly, this flexibility means you get comprehensive advice without unexpected charges.

Fairness across different investors: While larger portfolios require more oversight, many administrative and compliance tasks are the same regardless of size. Good fee models take this into account so that clients with bigger portfolios aren’t overcharged, and smaller investors still receive the same quality of service. Again, this fairness fosters loyalty and builds long-term relationships.

Independence and objectivity: When your adviser’s income comes solely from you, there’s less risk of product bias. They’re not rewarded for selling one investment over another. This independence means advice is based purely on what’s best for you, your goals, and your circumstances. For many investors, this peace of mind is one of the strongest reasons to choose a fee-based arrangement.

How you pay for financial advice matters as much as the advice itself. A transparent, professional fee structure can align your adviser’s interests with your own, ensure you get support when you need it most, and give you access to the full breadth of your adviser’s expertise without hidden or unexpected costs. For many investors, fee-based advice isn’t just a method of payment – it’s a way of ensuring their financial plan is managed with care, objectivity, and their best interests at heart.

* Odendaal is a Certified Financial Planner at Crue Invest.

PERSONAL FINANCE