IFA Fees and Trail Commissions – Are They Worth It for Investors?

IFA fees and trail commissions are an important part of the cost of getting professional financial advice. While an experienced Independent Financial Adviser (IFA) can help you avoid costly mistakes, it’s worth understanding how these fees work and whether they deliver value.

However, good advice comes at a cost. One of the most common, and often misunderstood, charges is the trail commission. This is an ongoing fee deducted each year, regardless of how much work is done on your portfolio.

So, are these fees worth paying? Let’s take a closer look.

Why Professional Financial Advice Matters

Before looking at the cost, it’s important to recognise the value of professional advice. Financial planning is complex, and the right adviser can:

• Spot risks you might miss.

• Identify opportunities you didn’t know existed.

• Guide your decisions during uncertain times.

• Keep your investments aligned with your goals.

For landlords and investors, this often means managing more than property. Pensions, ISAs, and other assets all need to work together. In some cases, diversifying into different property models, such as assisted living property investment, can be part of a long-term wealth strategy.

A skilled adviser can bring everything into a clear, strategic plan.

The question is not whether advice has value. It does. The real question is whether trail commissions are the right way to pay for it.

What Are IFA Fees and Trail Commissions?

Trail commissions are ongoing payments from your investment to your adviser, usually a percentage of your total investment each year. You can read more about how adviser charging works in the FCA’s official factsheet on adviser charging (PDF).

The idea is simple: the adviser is paid to provide continuous oversight and portfolio management. In theory, you benefit from ongoing attention and tailored recommendations.

In reality, the experience can vary. Some clients get proactive, high-quality support. Others keep paying without seeing much activity or change.

This is where you need to decide whether you are paying for genuine expertise or simply funding a quiet, automatic fee.

When IFA Fees and Trail Commissions Can Be Worth It

There are times when trail commissions represent good value. For example:

• You have a complex, diverse portfolio.

• You want your adviser to monitor markets and act quickly on your behalf.

• You value direct, fast access to a professional who knows your circumstances.

• You receive regular reviews, updates, and personalised recommendations.

In these cases, a percentage-based fee can be a fair exchange for consistent, proactive support.

When IFA Fees and Trail Commissions May Not Be Worth It

The problem comes when the level of service does not match the fee. Warning signs include:

• Minimal or no contact from your adviser.

• Generic, automated reviews with little relevance to you.

• No clear explanation of any portfolio changes.

• Your investments left largely untouched for years.

Paying for expertise you rarely use is like paying rent on an empty property. The money leaves your account, but you see little benefit in return.

How to Judge the Value of IFA Fees and Trail Commissions

To work out if your trail commission is worth it, review both the service you receive and the results you see.

1. Know the exact fee – Ask for the percentage and the annual total in pounds.

2. Review what’s included – Does it cover tax planning, full portfolio management, and regular meetings?

3. Assess responsiveness – Has your adviser adapted your portfolio for market changes or your personal milestones?

4. Compare alternatives – Would a flat fee or one-off advice be more cost-effective?

Your goal is not simply to cut costs. It’s to make sure the fees you pay bring genuine value, protection, and growth to your wealth.

Why This Matters for Long-Term Investors

Even small annual fees can have a major long-term impact. Over 10 or 20 years, trail commissions can add up to tens of thousands of pounds.

For landlords with multiple investments, that’s money that could be reinvested, used for property improvements, or allocated to new opportunities.

Regularly asking, “Is my adviser still delivering the value I’m paying for?” is an essential habit for any serious investor.

A Balanced View on IFA Fees

Professional advice can be worth far more than the cost. In times of market uncertainty or major life changes, having an expert on your side can make a significant difference.

However, trail commissions only make sense when your adviser is actively engaged, responsive, and delivering measurable results.

If the service is minimal, the value is questionable, regardless of their experience or credentials.

Final Thoughts

Financial advice is important, but so is knowing you’re paying for genuine service rather than just the fee structure.

• Understand your costs.

• Measure the value you receive.

• Explore other payment options if needed.

The aim is to keep expert guidance, but make sure the payment method works for you, not just for your adviser.