What Does a Financial Adviser Cost in New Zealand?

If you are working out what a financial adviser costs in New Zealand, you are really asking two questions: what the number is, and who is paying it. The second one decides the first. A large share of financial advice in this country is still paid for by the product provider rather than by the person receiving the advice, and that arrangement never shows up as a price.

Here is how advisers are paid, what we charge, and what to ask before you hand anyone money.

The four ways a financial adviser gets paid in New Zealand

• Commission from a product provider. You are quoted nothing, or close to nothing. The adviser is paid by the bank, insurer or fund whose product you end up holding. The cost is real, it is simply inside the product rather than on an invoice.
• A percentage of what you invest. Often charged every year for as long as your money is there. It looks small next to a portfolio and compounds like any other annual cost.
• An hourly rate. Honest and open-ended. You will not know the total until the work is finished.
• A fixed fee for a defined piece of work. The scope and the number are both agreed in writing before anything starts, so the total cannot move.

We use the fourth, and only the fourth. We receive no commissions and no incentives from banks, fund providers or product issuers, which is stated in our public disclosure. There is no version of our advice where somebody else is paying us to reach a particular conclusion.

What we charge

Most advisers in New Zealand publish a range. We publish the number.

• First consultation: nothing. It is free, and it carries no obligation. Part of its purpose is to tell you honestly if paying for a full plan would not change your answer.
• A personalised Statement of Advice: a fixed fee of NZD 950, GST inclusive, paid once. That is the whole cost of the written plan. It is set out in the engagement agreement, with the scope it covers, before any chargeable work begins.
• Implementation support: optional, and billed hourly. Only if you ask for help putting the plan into effect. You are free to act on the plan yourself and pay nothing further.
• Ongoing review: optional. Only if you request it and we agree it.

You may still pay fees charged by product providers, such as a fund manager’s own management fee. Those are theirs, not ours, and no part of them comes back to us.

What the fixed fee actually buys

A Statement of Advice is the written plan itself, personalised to your circumstances. It sets out your goals and priorities, the assumptions and risks behind the advice, the alternatives that were considered and rejected, and a prioritised action plan telling you what to do and in what order. Email clarification support is included for ten business days after it is delivered.

You own the document. It stays useful because it explains the reasoning rather than only the conclusions, which is what lets you re-apply it when your circumstances change. More on what is inside one: what a Statement of Advice is, and what is in one.

What happens if the advice does not find anything

This is the question people are too polite to ask, so we answer it in the engagement agreement rather than waiting to be asked.

If the Statement of Advice fails to identify at least NZD 1,000 of potential average annual financial value, projected over five years, you may request a full refund within 30 days of delivery, less a NZD 150 administration fee. Average annual financial value means the total estimated gross improvement identified in the plan, including projected return improvements, cost savings, fee reductions and tax-efficient strategies, divided by five. The clause does not apply if the information you provided was incomplete or materially inaccurate, for the obvious reason that a plan can only work with what it is given.

The same NZD 150 administration fee applies if you cancel after paying but before the plan is delivered.

Is there a minimum amount you need before advice is worth paying for?

There is no fixed minimum. Advice tends to be most effective once you have meaningful savings or investments to direct, typically from NZD 50,000, but the honest test is not the balance. It is whether the decisions in front of you are large relative to what you have, whether they interact with each other, and whether getting the order wrong would be expensive.

Why the cheapest advice is often the most expensive

Advice that costs you nothing at the point of delivery is not free advice. It is advice whose cost is inside a product you will hold for years, paid by a provider with a preference about which product that is. The fee you can see is the one you can compare, negotiate and refuse.

This is the whole reason our fee is a single fixed number and our income comes from one place. What independent and no-commission actually mean is worth reading before you take anyone’s word for it, including ours.

Five questions to ask any adviser before you pay

1. Is the fee fixed, and will I have it in writing before work starts?
2. Is anyone other than me paying you in connection with this advice? A straight answer here tells you most of what you need to know.
3. What do I receive at the end, and do I own it?
4. Is implementation included, or separate and separately priced?
5. What happens if the advice does not find anything worth acting on?

If you would like the answers for us rather than in general, the first consultation is free and is the right place to ask them.

Related

• What is a Statement of Advice, and what is in one?
• What we do, and how the three services fit together
• Our own portfolio, its three-year record and the benchmark it is measured against
• Frequently asked questions

VIS.finance™ is a licensed Financial Advice Provider (FSP1010421). This page is general information, not personalised financial advice. Fees stated here are the fees published in our engagement agreement at the date shown and are confirmed in writing before any chargeable work begins.

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