The diverging adviser-client perception on advice fees
Findings from Russell Investments has shown clients are struggling to understand fee structures when receiving advice, even if the advisers believe they are transparent.
The firm’s Value of Advice report, which questioned 700 advised and unadvised consumers and almost 200 advisers, found fee clarity is an area of divergence between client and adviser, particularly important when cost is a major consideration when seeking advice.
According to Adviser Ratings, the median advice cost jumped 18 per cent in 2025 to reach $4,668 which reflects the increased cost to deliver compliant advice and the shifting value proposition as advisers focus on complex client needs.
Advisers typically connect with their clients at least three times a year, but those who charge fees higher than $5,000 tend to engage more frequently than this.
Rusell Investments said: “Clients rate the importance of transparent, easy to understand fees at 8.2 out of 10 but rate advisers’ performance at 7.9. Advisers rate their own performance higher (8.4) than their clients rated it.
“Clearly explaining fees without jargon can strengthen trust and reinforce value. Taking time to walk clients through each cost, checking for understanding before moving on and linking fees to outcomes can build confidence in the advice process.”
Despite concerns about costs and the unaffordability of advice, the report found 89 per cent of advised clients stated advice makes them more confident about their finances as well as more knowledgeable. Some 85 per cent feel supported to “make decisions aligned with their lifestyle and values”, with a further 86 per cent believing their financial position has been improved after seeking financial services.
In contrast, over half of unadvised investors said they are only moderately or slightly confident about managing their money.
The report also found that advice can help accelerate their retirement, with 42 per cent of surveyed clients retiring before the age of 65, compared to just 20 per cent without an adviser. Retirement planning topped the list of reasons that consumers sought financial advice, with 40 per cent of both unadvised and advised consumers stating it was their main reason to see an adviser.
“I think ultimately, the client wants to be able to make the final call on their financial situation,” Neil Rogan, head of distribution Australia and New Zealand at Russell Investments, stated. “Having the adviser there to provide the expertise, recommendation and emotional support through that process is really critical.”
Recommended for you
Licensee switching may be on the rise, but AFSLs are still finding ways to make the process difficult with small licensees identified as the biggest culprits.
While technology is seen by many as the key to solving efficiency challenges for advisers, a consultancy head has argued that advisers themselves are contributing to this burden through unnecessary overcomplications of the advice process.
AMP’s advice platform has unveiled a low-fee investment menu aimed at expanding advisers’ client base by targeting individuals with less complex needs, in response to adviser feedback.
ASIC has banned a former financial adviser for his role in encouraging clients to invest their retirement money in the Global Capital Property Fund, run by United Global Capital.
