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Charging for cash flow modelling

This article is part of
Guide to Cash Flow Modelling

An adviser’s charge for cash flow modelling will vary depending on their clients and how complicated their finances are.

Neil Bailey, director and financial planner of Northamptonshire-based Fortitude Financial Planning, says his business charges a fixed fee for the initial planning process – usually between £1,500 and £2,000.

However Mr Bailey points out his charges can be more if the clients circumstances are more complex. He adds ongoing reviews are covered by a percentage assets under management ongoing advice fee.

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Rebecca Taylor, president of the Institute of Financial Planning, says the price charged must recognise that it is a technical job to create a cash flow, as well as needing a skilled individual to make sure the lifestyle information is of depth.

She says: “A basic cash flow would probably be charged at around £1,000, although I do charge less for some of my younger clients who are early in the accumulation stage of their planning.”

The Financial Conduct Authority’s rules on adviser remuneration state retail clients must set their own charges.

The regulator stated it wanted firms to have charging structures that are product neutral, with firms focusing on the level of service they provide and the outcome for the consumer.

Firms should seek to base their charges on the services they provide, rather than on the type of products they sell.