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Paid Vs. Free Financial Advice: Do I Really Need to Pay?

Jennifer Birtles 10th Jan 2023 One Comment

Reading Time: 5 minutes

There’s an ongoing discussion about financial advice: with the numerous free online resources and charities available, is financial advice still something worth paying for?

In essence, seeking financial advice is a very personal decision and it varies greatly depending on your personal circumstances and financial goals. Let’s take a look at the difference between free and paid financial advice, to help you decide your next steps in seeking money help.

What is Free Financial Advice?

Free financial advice is good for research

Free financial ‘advice’ is, in reality, only guidance as it is generalised information and not tailored to your needs by a professional. Free guidance is often found online or in magazines and incorporates a range of guides, tips, articles, and recommendations. We’re a financial advice resource at MoneyMagpie!

Making the most of free financial guidance is a great starting point for making financial decisions as it can introduce you to a range of products, schemes, and services available, as well as help you to develop plans for your own personal financial goals. It’s a great way to research different options before you pay for professional advice. Arming yourself with information can help you make sure your professional advisor is considering all the options you know are available to you.

However, free guidance is generally written broadly, aimed at helping a large audience, meaning the advice may not always be relevant to you in your own personal circumstances. For example, a piece of free advice might talk about the importance of long-term saving and investments without knowing that you have a large sum of debt to pay off first.

Free Online Guidance

Gathering as much knowledge, help, and understanding for free is always best practice. Even for more complex matters, the more you can research yourself, the better equipped you will be when speaking to an advisor about what you want to achieve.

Free online advice can be suitable for a lot of basic ideas including tax, simple saving products, loans, benefits, debt, and straightforward insurance policies. However, as soon as any of these get more complicated or beyond your understanding you need to speak to a professional before you get yourself into a tricky situation.

Where to Find Guidance

Most commonly free help can be found through charities, websites (like us!), magazines, and Government-backed services.

Some of the best places to start (after reading MoneyMagpie) are:

  • Money Helper is a Government-backed service providing free advice on things like benefits, savings and pensions.
  • Community Money Advice is a free debt advice charity.
  • The Money Charity provides education, information, and guidance on a range of financial queries.
  • Financial Ombudsman Service is a free service that helps settle disputes between consumers and businesses providing financial services.

Regulations Don’t Apply

Unlike professional financial advisors, who are monitored and regulated by the Financial Conduct Authority (FCA), free guidance found online is not. This means that if you buy a financial product based solely on information you receive from a free source and things go wrong, you have fewer rights and be unable to complain to an official body like the Financial Services Compensation Scheme.

When to Pay For Financial Advice

As you begin to make more complex financial choices, it’s best to speak to a professional advisor.

Some of the main situations a financial advisor can help with include:

  • Planning for your retirement
  • Switching your pension provider
  • Moving onto the property ladder and applying for mortgages
  • Investing and saving money
  • Dealing with life changes that impact your finances like inheritances, divorce, and redundancies
  • Better investment protection

Advisors need to be registered with the FCA. If they give you poor advice you’re in a stronger legal position than on free advice.

Finding the Right Advisor For You

Shop around for your financial advisor

Financial advisors aren’t cheap, so it’s important to make sure you find someone suitable for you and your needs. You should always have an initial meeting, free of charge, with an advisor before you go through specifics. It gives you a chance to ask questions and find out how they work.

After an initial meeting there is no pressure to commit to an advisor. If you’re not happy, keep searching and make sure you find the right one for you. Two great sites to use are VouchedFor and Unbiased where they will help pair you with an advisor they think could be a good match.

Make sure you discuss your plans with an advisor and whether you want a one-off session or to set up regular meetings.

The Two Types of Advisors

There are two types of financial advisors: Independent Financial Advisors (IFAs) and Restricted Advisors.

Independent Financial Advisors give unbiased advice about the whole range of financial products on offer. They research and consider all products and providers that meet their client’s needs.

Restricted advisors specialise in different areas, such as pensions or mortgages. They are able to give advice and suggest from a limited range of products. Some will say they are ‘whole of market independent advisors’ – which means they’re offering unbiased advice. Others, such as mortgage advisors linked to high street banks, will only show you the options that suit THEIR interests (so they won’t show you a better mortgage deal from a competitor, for example). Always look for ‘independent’ or ‘whole of market’ in the description.

For comprehensive help and guidance with your finances, a fully-qualified IFA is what you need. However, if you are in need of specific advice then looking for an advisor in the relevant area of expertise will be the better option for you.


There are different ways you can pay for financial advice and it all varies on individual situations. Fees are based on an hourly rate, flat fee, an ongoing fee if they are providing a long-term service for you, or a percentage of the money you want to invest. Consider your options carefully! Talk it through with your advisor prior to committing. They must give you a copy of their charging structure and an estimate of the cost before providing any services.

More Useful Reading

Check out some more MoneyMagpie articles on financial health, goals, and advice below.


*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.

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3 years ago

Great article. The links to other organisations are particularly appreciated.

Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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