What your pension, ISA and adviser really cost you

Ask most people with a large portfolio what they pay for it and you get a pause, then a number: “About one per cent, I think.” Then they open the paperwork. There is the fund charge. The platform charge. The adviser’s ongoing fee. Perhaps a discretionary manager’s fee on top, and transaction costs inside the funds that never appear on a bill at all.

Each layer looks small. Together they can easily pass 2% a year. On a £750,000 portfolio, 2.1% is £15,750 every year, whether markets rise or fall. That is the cost of a new car, every year, for as long as you stay.

Wherever you are in the world. The same layers exist almost everywhere, under different names: platform or custody fees, fund expense ratios, adviser or wealth-management fees, and trading costs. The examples are in pounds because most of my readers are British; the arithmetic is identical in dollars, euros, dirhams or rupees.

Currency guide: £750,000 is roughly $1,003,000 or €893,000 (exchange rates on 20 October 2026; they change daily).

“Charges are the one part of investing you can know in advance. Returns are a hope. Costs are a certainty.”Alpesh B Patel OBE

This guide shows you how to find every layer, add them up in pounds, and decide whether you are getting value for money. It does not say that paying for help is wrong. Good advice can be worth far more than it costs. The point is to know what you pay, and what you get.

Step 1: Know the layers

Step 2: Get the total in pounds, not percentages

You are entitled to see what you actually paid. In the UK and EU, firms that provide investment services must send you an annual statement of the costs and charges you paid, with the total shown in money as well as a percentage, and an itemised breakdown on request. In the US, 401(k) plans must send participants an annual fee disclosure and a quarterly statement of the dollar fees taken from the account, and registered investment advisers must give clients a brochure and relationship summary setting out their fees.

Find the costs section of your last annual statement. If you can’t find it, ask each firm, in writing: “Please tell me the total amount, in pounds, that I paid you last year, including all fund, transaction, platform, advice and management costs.” Add the answers together.

Step 3: See what it costs over time

Here is an illustrative stack on a £750,000 portfolio. Your numbers will differ; this is to show how layers combine, not to describe any particular firm.

Now imagine that portfolio left for 20 years with markets returning 6% a year before charges. Again, an illustration, not a prediction:

That gap is close to the size of the original portfolio. It is the price of the service. The question this guide asks is simple: is what you receive worth that much to you?

Step 4: Decide what you are paying for

Split your costs into two groups:

• Things you would struggle to do yourself: complex tax and estate planning, inheritance planning, advice on final salary pensions, cash-flow planning, help with a business sale or divorce, someone to stop you panicking in a crash. These can be worth a great deal.
• Things you could learn to do: choosing funds or shares, rebalancing, reviewing performance against a benchmark. Many people pay an ongoing percentage for years mainly for this part.

If most of your cost sits in the second group, you have options: negotiate, switch to a fixed fee, pay for advice only when you need it, or learn to manage the investment part yourself.

Step 5: Questions to ask

1. What did I pay you last year, in pounds, all-in?
2. Is your fee a percentage of my portfolio, a fixed fee, or hourly? Could it be a fixed fee?
3. What exactly do I get each year for the ongoing fee, and when did I last receive it?
4. Are there any charges for leaving, or for moving my investments elsewhere?
5. How has my portfolio performed, after all charges, against a fair benchmark over five years?

Before you move anything

High charges are a reason to ask questions, not to move money in a hurry. Before you transfer or consolidate any investment or pension, check in writing what you could lose.

What this taught me

Over the years I have looked at a great many portfolios. The most common surprise is not a bad fund. It is the total bill, once someone finally adds it up. People who would negotiate hard over a car or a house have never asked what their wealth costs them each year.

What this taught me is that you can’t control the market, but you can control what you pay and what you get for it. So here is the question to take away: do you know, in pounds, what you paid last year?