Adviser charging illustration calculator: initial and ongoing fees in pounds, year by year, and their cumulative effect on a portfolio over ten years

"How much does an IFA cost" is typed by clients. The firm's question is the other side of it: how do we show this client, in pounds, what our charges will come to and what they do to the portfolio over time, because the rules require it and the Consumer Duty requires us to be able to justify it. This calculator produces that table.

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Adviser charging illustration: initial and ongoing fees in pounds, year by year, and their cumulative effect on the portfolio over ten years

Amount invested (£) Initial charge (%) Ongoing adviser charge (% a year) Platform and fund charges (% a year) Assumed growth before charges (% a year) Years51020

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What the rules ask for

COBS 6.1ZA carries the MiFID II costs and charges requirements into the Handbook: the firm aggregates all costs and charges, shows them in cash and as a percentage, and illustrates the cumulative effect on the return, before the service starts (ex-ante) and at least annually afterwards (ex-post). The Consumer Duty's price and value outcome asks the firm to be able to show that the price is reasonable relative to the benefits, which starts with knowing the price in pounds. A percentage on page nine of a report does neither.

How the calculator works

The initial charge comes off at the start. Each year the portfolio grows by the assumption, then the ongoing adviser charge and the platform and fund charges are taken on the grown value. The table shows each year's adviser charge, each year's other charges, the value after charges and the value the same money would have reached with no charges at all. The difference at the end is the cumulative effect; expressed as a yearly figure it is the reduction in yield, which is the number the MiFID II disclosure uses.

The growth assumption is flat and yours. The real path will differ in every year; the illustration is not a projection, and the report says so. What does not change with the path is the structure: a percentage charge on a growing portfolio grows with it, and ten years of 0.75% is not 7.5%.

Reading the result

Three numbers matter to the client and to the file. The adviser's total over the period, in pounds, which is what the client is buying the ongoing service for. All charges, which is what the client is paying in total and what the platform and fund choices add. And the reduction in the final value against no charges, which is what the Consumer Duty's fair value question is about: is the service worth that.

The ongoing figure in year one is also the amount the client pays for the first annual review. The FCA's February 2025 review found 83% of promised reviews delivered; the ongoing service tracker counts the years in which that fee was taken and the review was not, which is what the FCA has asked firms to consider redress for.

Where it goes in the report

In the suitability report, under costs and charges, as a table rather than a paragraph, with the assumptions stated. The file check lists it as one of the nine points beyond the COBS 9.4.7R minimum, and it is the one the FCA's thematic file reviews have most often found missing or incomplete. The ex-post version, with actual charges, goes in the annual review pack.

In the firm

An AI Report Drafter set up by Overlyft produces this table for every recommendation from the firm's charging schedule and the platform and fund charges on the research, and the Review Coordinator produces the ex-post version from the platform's actual figures for each annual review. The adviser checks the assumptions and signs; the firm's charging schedule is the firm's. Nothing here is advice on charges or investments, and the calculator does not recommend a level of fee. Not financial advice.