Under the FCA’s Consumer Duty, all financial services firms are now required to ensure fair value and clear communication. But in practice, many clients still struggle to get a straight answer to a simple question:
“What am I actually paying – and what am I getting in return?”
In this article, we break down the real cost of running a financial plan – including the portfolio, the platform, the funds, and the advice – and explain why it matters for your long-term financial wellbeing.
What Are You Actually Paying For?
A proper financial plan involves several layers, each with associated costs:
- Platform fees – for holding and administering your investments
- Fund charges – for managing the investments within your portfolio
- Transaction costs – for buying and selling investments
- Adviser fees – for ongoing planning, reviews, and financial guidance
All of these combine into the total cost of ownership — the full price of having your plan executed, managed, and looked after over time.
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Platform Fees
The platform is the technology and administration provider that holds your investments – often within a SIPP, ISA, or General Investment Account (GIA).
Most platforms charge a percentage-based fee (typically 0.20% to 0.40% per year), based on the total value of your portfolio. Some offer flat-fee structures for larger accounts.
These charges cover:
- Safekeeping of your assets
- Online access, valuations, and documentation
- Rebalancing and trade execution
- Regulatory reporting and tax documentation
Some platforms also charge for trading, withdrawals, or account closures, so it’s important to know the full picture.
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Fund Charges – OCFs and More
When you invest via funds – whether active or passive – each fund has an Ongoing Charges Figure (OCF). This is the annual cost of running the fund, and it typically includes:
- The Annual Management Charge (AMC) paid to the fund manager
- Custody and administration fees
- Regulatory, audit, and legal costs
OCFs are deducted daily from the value of your fund, so they don’t show up as a bill – but they do reduce your returns.
Typical OCFs:
- Passive/index funds: 0.10% – 0.30%
- Active funds: 0.60% – 1.00%
- Specialist, boutique, or alternative funds: 1.00% or more
Higher-cost funds can be justified — but only if they consistently add value relative to their peers or benchmarks.
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Transaction Costs
Funds incur additional costs when they buy and sell assets. These aren’t part of the OCF but still affect your returns.
They include:
- Bid-offer spreads
- Stamp duty and taxes
- Brokerage commissions
Transaction costs vary depending on fund turnover, market conditions, and asset class. For example, a low-cost index tracker may have transaction costs of 0.05% or less, while an actively managed global equity fund could see 0.30% or more.
Unfortunately, these costs are often only disclosed in detailed fund reports – and are rarely highlighted clearly by asset managers.
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Adviser Fees – The Cost of Ongoing Financial Planning
Beyond the platform and fund charges, most clients will also pay for the advice, guidance, and planning that surrounds their portfolio.
At GSI, we charge a transparent, agreed fee for ongoing advice and management – typically between 0.75% and 1.00% per year, depending on the complexity of your plan and the level of service.
This covers:
- Ongoing financial planning
- Investment advice and risk management
- Behavioural coaching through market cycles
- Portfolio monitoring and rebalancing
- Tax planning and withdrawal strategies
- Annual reviews and life-stage updates
You’re not just paying to “beat the market” — you’re paying for a financial strategy that supports your goals, keeps you disciplined, and helps you make better long-term decisions.
Why Don’t You See All These Costs in One Place?
This is a fair question — and one of the most frustrating aspects for clients.
Despite regulatory efforts under MiFID II and Consumer Duty, many asset managers and platforms don’t present total costs clearly or consistently.
Here’s why:
- Fund managers only show their own OCFs – not platform or advice charges.
- Platforms may hide fund costs behind dropdowns or footnotes.
- Transaction costs are variable and usually not included in headline charges.
- Some providers argue that performance is shown net of charges, so you don’t need the breakdown. But this makes comparing value nearly impossible.
The result? You may need to check three or four documents to get a full picture – unless your adviser provides a consolidated fee summary.
So What Should You Expect to Pay?
Here’s a realistic breakdown of typical total costs for a fully advised, well-managed financial plan:
Cost Type |
Typical Range |
| Platform fees | 0.20% – 0.40% |
| Fund OCFs | 0.30% – 1.00%+ |
| Transaction costs | 0.05% – 0.30% (variable) |
| Adviser fee | 0.75% – 1.00% |
| Total annual cost | 1.3% – 2.3% |
If you’re paying more than 2%, it’s not necessarily excessive — but it should prompt questions:
- Am I getting active planning, service, and advice that supports my life goals?
- Are my investments well-chosen and cost-efficient?
- Could I achieve similar outcomes with a lower total cost?
Value, Not Just Price
It’s tempting to chase the lowest fee — but low-cost doesn’t always mean high-value.
For example:
- A more expensive fund may deliver stronger, risk-adjusted returns.
- A robust platform may save time and reduce admin headaches.
- A trusted adviser may help you avoid costly behavioural mistakes, tax pitfalls, or bad timing.
At GSI, we benchmark every layer of your financial plan — from platform to portfolio — and ensure you receive value at every step, with full fee transparency in plain English.
How to Take Control
If you’re unsure about what you’re paying:
- Ask for a total cost breakdown — across all layers
- Request fund OCFs and transaction costs in plain figures
- Review your platform and provider fees at least annually
- Weigh cost against outcomes — peace of mind, confidence, progress
Final Thought
A 1% difference in annual fees may not sound like much — but over 25 years on a £250,000 portfolio, that could mean more than £70,000 in lost growth.
But more importantly, knowing what you’re paying builds trust, improves decisions, and gives you confidence that your financial plan is working for you — not just the providers.
If you’re unsure whether your current arrangement offers value, don’t be afraid to ask. Good advice starts with transparency.
Disclaimer
This content is for general information only and does not constitute financial, legal, tax, or investment advice. The value of investments can fall as well as rise, and you may not get back what you invest. Tax treatment depends on individual circumstances and may change.
GSI Wealth Management has been appointed as a distributor of services offered by Mitchell & Mitchell Asset Management Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA no: 992402). GSI does not act as an authorised representative of Mitchell & Mitchell. All views reflect GSI’s opinion at the time of writing. No personal liability is assumed by any contributor. We take care to ensure accuracy but accept no responsibility for loss from reliance on this material.
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