First, separate two different questions
People collapse two things into one when they ask about advisers:
- "Who should choose my investments?" - the portfolio question.
- "Who should help me plan my financial life?" - the planning question.
These have different answers. Choosing investments has become genuinely easy: a broad, low-cost index fund solves it for most people, and paying someone a percentage every year to do that is poor value.
Planning is different. Retirement drawdown strategy, estate planning, tax structuring across accounts, business succession, what to do with a severance package - these are complicated, high-stakes and hard to research your way through. That is where an adviser earns their keep.
How advisers get paid in South Africa
You cannot evaluate the value without understanding the cost, and the cost is structured in several ways.
| Model | How it works | Watch out for |
|---|---|---|
| Assets under advice | An annual percentage of what you have invested, commonly around 0.5%-1% | Grows automatically as your portfolio grows, whether or not the work does |
| Initial / upfront fee | A percentage of money you invest at the start | Reduces the amount actually invested from day one |
| Hourly or flat fee | You pay for time or for a specific deliverable | Feels expensive up front; often far cheaper over decades |
| Commission | Product providers pay the adviser when you buy | A real conflict of interest - the adviser is paid for the sale, not the advice |
All fees must be disclosed to you in writing before you sign anything. If they are vague, that is your answer.
The number that should focus your mind
An annual fee of 1% on your portfolio does not mean you lose 1%. It means you lose 1% and everything that 1% would have earned in every remaining year. Over an investing lifetime, a percentage point of ongoing fees can consume a meaningful share of your final outcome.
This is not an argument that advisers are not worth it. It is an argument that they need to add more value than that, and that you should know what you are comparing against. See how compounding works - it works on costs too.
What a good adviser genuinely adds
Dismissing advisers entirely is as lazy as assuming you need one. The real value tends to sit in four places:
- Stopping you doing something catastrophic. The biggest destroyer of returns is not fund selection - it is selling everything in a crash. An adviser who talks you out of that once has likely paid for years of fees.
- Tax and structural efficiency. Knowing which assets belong in a retirement annuity versus a TFSA versus a taxable account, how to sequence retirement withdrawals, how to use exclusions properly. This is technical, and errors here are expensive.
- Handling genuine complexity. A business, offshore assets and allowances, a blended family, an inheritance, emigration, retirement in the next few years. Real complexity is where DIY starts to get dangerous.
- Making you actually do it. Plenty of people know what they should be doing and have not done it for six years. An adviser is, among other things, an accountability mechanism.
Where DIY makes more sense
Doing it yourself is a legitimate, mainstream choice - not a budget compromise. It suits you if:
- Your situation is simple. A salary, an emergency fund, a TFSA, a retirement fund and an index fund. Advice on this is largely advice you can read for free.
- You are in the accumulation phase. Building up is much simpler than drawing down. The complexity arrives later.
- You are willing to automate and leave it alone. The DIY approach that works is dull and consistent: a debit order into a broad fund, reviewed twice a year. See how to automate your investing.
- You have proved you will not panic. If you held through a market drop without selling, you have demonstrated the main skill DIY requires.
The honest test is not whether you can manage it yourself. It is whether you will - consistently, for decades, including in the years when it is unpleasant.
The middle options people forget
This is not a binary choice, and the middle ground is where a lot of people should be.
- One-off, fee-based planning. Pay an adviser hourly or for a fixed project to build a plan, then implement and maintain it yourself. You get the professional structure without an annual percentage compounding for thirty years. Revisit every few years or when something significant changes.
- Advice on the hard part only. Manage the investing yourself and pay for specialist help on tax, estate planning or retirement drawdown specifically.
- Robo-advisers and automated platforms. Algorithm-driven allocation, typically at a lower fee than a human. Good at portfolio construction and rebalancing, and no use at all for a complicated life event or for talking you off a ledge at 2am.
Questions to ask before you sign
If you do engage an adviser, these six questions will tell you most of what you need to know:
- "What is your FSP number?" Then verify it on the FSCA's public register. Any legitimate adviser gives you this immediately.
- "How exactly are you paid, including anything from product providers?" Ask for it in writing, as a rand figure for your specific situation - not a percentage.
- "Are you a fee-only adviser?" If not, ask which products pay them commission, and how they manage that conflict.
- "What will my total annual cost be, including underlying fund fees?" Advice fee plus platform fee plus fund TER. People routinely discover the total is triple the advice fee alone.
- "What happens if I want to leave?" Ask about penalties, notice periods and how long a transfer takes. Some legacy products have early termination charges that are genuinely punishing.
- "What would you recommend I do that I could not do myself?" The most revealing question of the six. A good adviser has a specific answer.
Red flags
- Reluctance to state fees plainly, or fees quoted only as percentages
- Pressure to decide today, or a product that is "only available now"
- Guaranteed or unusually specific returns - a guarantee and a high return do not appear together honestly
- Everything they recommend happens to be issued by one company
- Long lock-in periods with heavy early exit penalties
- Dismissing your questions rather than answering them
A rough decision guide
| Your situation | Usually points toward |
|---|---|
| First salary, simple finances, long horizon | DIY - a TFSA and a broad index fund |
| Growing income, RA plus TFSA plus some discretionary investing | DIY, with a one-off paid plan if you want a check |
| Business owner, offshore assets, complex tax | Adviser, ideally fee-based |
| Within five years of retirement | Adviser - drawdown and structure decisions are hard to reverse |
| Large inheritance or severance package | Adviser, at least once, before doing anything |
| You know what to do but have not done it for years | Adviser, for the accountability alone |
Whichever you choose, stay informed
The worst outcome is not picking wrong - it is handing everything over and never looking again. Clients who understand their own portfolios get better service, ask better questions, and notice when something is off.
EZvest is an educational tool, not an adviser: the Learning Hub teaches the concepts in short lessons, the portfolio view shows what you actually own, and FinBot will explain any product, fee or term in plain language - including the ones in a document someone has asked you to sign. It explains; you decide.
Frequently asked questions
How much does a financial adviser cost in South Africa?
Most commonly a percentage of assets under advice charged annually, often around 0.5% to 1%, sometimes with an initial fee on money you invest. Some advisers charge a flat hourly or project fee instead, and some earn commission on insurance and certain products. All fees must be disclosed to you in writing before you sign.
At what point is a financial adviser worth it?
Complexity matters more than portfolio size. Someone with a straightforward salary, a TFSA and an index fund may get little value at any balance, while someone with a business, offshore assets, a blended family or an imminent retirement can benefit at a much smaller balance. Ask what specific problem the adviser will solve.
What is the difference between a fee-only and a commission-based adviser?
A fee-only adviser is paid solely by you, which removes any incentive to steer you toward particular products. A commission-based adviser is paid by product providers when you buy, which creates a conflict of interest that may be managed well or badly. Neither is automatically disqualifying, but you should always know which you are dealing with.
How do I check if a financial adviser is legitimate in South Africa?
Confirm they are an authorised Financial Services Provider or a registered representative of one with the Financial Sector Conduct Authority. The FSCA maintains a public register you can search, and any legitimate adviser will give you their FSP number without hesitation.
Can I use an adviser for a one-off plan and manage the money myself?
Yes, and it is an underused option. Some advisers work on an hourly or flat-fee basis to produce a plan you then implement and maintain yourself. This can give you professional structure without an ongoing annual percentage compounding against your balance for decades.
Understand your money either way
Whether you use an adviser or go it alone, knowing what you own beats trusting blindly. Lessons, portfolio tracking and FinBot in one place.
Launch EZvest - it's free to start ->Educational content only. This article is general information, not financial advice, and EZvest is not a financial adviser and does not provide advice. Fee structures described are general market conventions and vary by provider. Always verify that any adviser is registered with the FSCA before engaging them. Consult a licensed financial professional before making decisions. How we research and review these guides.