The way your financial advisor is paid shapes the advice you receive. This isn’t a cynical observation — it’s a structural reality that applies across most professional services, and financial advice is no exception. When an advisor earns more by recommending one product over another, or earns more simply because your portfolio has grown, the incentive structure is not neutral. It tilts advice in directions that may have nothing to do with what’s actually best for you.
Flat-fee financial advice is a different model. You pay a transparent, agreed fee for advice and service. The advisor earns nothing from the products they recommend, and their income doesn’t grow automatically as your portfolio does. The result is a structurally simpler relationship: the only thing your advisor is paid to do is give you good advice.
This article explains how flat-fee advice works at Henceforward, how it compares to the alternatives, and what it means in practice for the clients we work with. For a broader treatment of how advice models compare and why the fee structure matters, our fee-only advice guide covers that ground in detail.
Key Definitions
Flat-fee advice
A financial advice model where the client pays a fixed annual or monthly fee, agreed upfront, regardless of portfolio size or which products are recommended. The fee reflects the scope and complexity of the advice relationship — not the value of assets under management.
AUM-based advice (assets under management)
A model where the advisor charges a percentage of the client’s invested assets each year — typically 0.58% to 1.15% (incl. VAT). The fee grows automatically as the portfolio grows, regardless of whether the scope of advice or service changes. A client with R40 million often pays double what a client with R20 million pays, often for an identical service.
Commission-based advice
A model where the advisor is compensated by the product provider — through upfront or ongoing commissions — when a client purchases or invests into a product. The commission is typically embedded in the product cost, making it invisible to the client as a separate charge.
Fee-only advice
A broader category encompassing any advice model where the advisor is compensated exclusively by client fees — no commissions or product-linked remuneration of any kind. Flat-fee advice is one form of fee-only advice.
CFP® (Certified Financial Planner)
The internationally recognised professional designation for financial planners, awarded in South Africa by the Financial Planning Institute (FPI). Requires completion of approved education, a board examination, ongoing continuing education, and adherence to ethical standards. Both advisors at Henceforward hold the CFP® designation.
How Financial Advisors Are Paid — and Why It Matters
There are three main ways financial advisors in South Africa are compensated. Understanding the differences — and their structural consequences — is the starting point for evaluating whether any advice relationship is genuinely working in your interest.
Commission-Based Advice
In a commission-based arrangement, the advisor receives payment from the product provider when a client purchases or invests into a product. This might be an upfront commission on a life policy, an ongoing trail fee on invested assets, or both. From the client’s perspective it can look like free advice — but the commission is embedded in the product cost. You pay for it through higher fees or lower net returns; it’s simply structured to be invisible.
The conflict is direct: the products that generate the most commission are not always the ones that best serve the client. Even an advisor with good intentions is operating within a structure that creates consistent pressure in a particular direction.
AUM-Based Advice
An assets-under-management fee charges the client a percentage of their portfolio each year — typically 0.58% to 1.15% for the advice component alone, before underlying investment costs. This is more transparent than commission, but it has its own structural problem: the fee grows automatically as the portfolio grows, whether or not the advice has become more complex or time-intensive.
A client with R40 million pays double what a client with R20 million pays — frequently for the same meetings, the same financial plan, and the same service. The portfolio grew; the advice didn’t. In practice, larger clients quietly subsidise a fee model that rewards asset accumulation rather than advice quality.
There are also subtler conflicts. An AUM advisor has a structural disincentive to recommend actions that reduce the advised asset base — paying down debt, transferring assets into a trust, or funding a specific goal from the portfolio — even when those actions are clearly in the client’s interest.
Flat-Fee Advice
A flat fee removes both dynamics. The advisor charges the client an agreed annual amount — calculated on the complexity and scope of the advice relationship — and receives no other remuneration. There are no commissions, no trail fees, and no percentage charge that grows with the portfolio. The advisor’s income is entirely decoupled from what products are recommended or how the market performs.
This means the advice is structurally freer. There is no financial benefit from recommending one product over another, no disincentive to recommend reducing the portfolio, and no automatic pay rise when markets go up. The only thing the advisor is paid to do is give you good advice.
| Feature | Commission-Based | AUM-Based | Flat Fee |
|---|---|---|---|
| Cost transparency | Low — embedded in products | Medium — disclosed but auto-escalating | High — fixed rand amount agreed upfront |
| Conflict of interest | High | Moderate | Low |
| Fee grows with portfolio? | Yes | Yes — automatically | No |
| Incentive on holistic advice | Low | Low | High — all planning within scope |
| Fair to larger clients? | No | No — larger portfolios overpay | Yes — fee reflects complexity |
How Flat-Fee Advice Works at Henceforward
At Henceforward, our fees are calculated on the complexity and time a client relationship genuinely requires — not on the size of the portfolio. A straightforward financial planning engagement requires less work than one involving offshore structures, a discretionary trust, a business interest, and cross-border tax considerations. The fee reflects that difference honestly.
This approach means two clients with identical balance sheets can pay different fees — because their situations are genuinely different. It also means a client with a larger but straightforward portfolio does not automatically pay more than one with a smaller but complex one. Portfolio size and advice complexity are not the same thing, and our fee structure reflects that.
All fees are agreed in writing before any engagement begins. There are no hidden charges, no product commissions, and no percentage fees that grow quietly in the background as your investments perform. What you see is what you pay.
Both advisors at Henceforward hold the CFP® designation and have been in the financial services industry since 2003. The advice you receive is delivered by the people whose names are on the firm — not passed down to junior staff.
Who We Work With
Henceforward works with three broad client types, each with a minimum annual fee that reflects the baseline scope of advice involved. These are starting points — actual fees depend on the complexity of individual circumstances.
Retirees
Starting from R36,000 per year
Designed for individuals who have built a substantial retirement nest egg — typically R15 million or more — and need expert, ongoing guidance to ensure their wealth supports a secure and sustainable retirement. The advice scope typically includes:
- Investment management aligned to long-term income needs and drawdown sustainability
- Cash-flow modelling to stress-test income against longevity, inflation, and market scenarios
- Estate planning — will reviews, beneficiary nominations, trust structures, and liquidity planning
- Tax optimisation across income sources to maximise after-tax outcomes
How we work with retiree clients →
Professionals and Entrepreneurs
Starting from R30,000 per year
For high-earning professionals, business owners, and entrepreneurs focused on building wealth efficiently and transitioning toward financial independence. The advice scope typically includes:
- Investment strategy and portfolio construction tailored to accumulation goals
- Tax-efficient structuring — retirement fund contributions, offshore allowances, trust considerations
- Protection planning — life cover, income protection, business assurance
- Financial independence modelling — projecting the path from where you are to where you want to be
How we work with professionals and entrepreneurs →
Family Office and High-Net-Worth Clients
Starting from R120,000 per year
For individuals and families managing complex balance sheets — typically R50 million and above — where financial planning extends across multiple structures, jurisdictions, and generations. The advice scope typically includes:
- Comprehensive oversight across local and offshore portfolios, trusts, and entities
- Intergenerational wealth structuring — estate duty planning, donations strategy, succession
- Cross-border tax and exchange control coordination
- Bespoke investment strategy across multiple asset classes and currencies
How we work with family office clients →
Why Fees Are Based on Complexity, Not Portfolio Size
One of the clearest illustrations of why flat-fee pricing is fairer than AUM pricing is what happens when two clients have identical balance sheets but very different financial lives.
Consider two retirees, each with a R30 million estate. The first has a living annuity as their primary income source and a straightforward local investment portfolio. The second has a living annuity, a discretionary local portfolio, an offshore investment account with international reporting requirements, and a direct share portfolio requiring active oversight and ongoing tax management.
Under an AUM model charging 0.58% per year, both clients pay about R175,000 annually — the same fee, despite very different levels of work involved. The simpler client overpays; the complex one may actually be getting reasonable value. The fee reflects asset size, not the advice being delivered.
Under Henceforward’s flat-fee model, the first client — straightforward structure, income and oversight focus — starts at R36,000 per year. The second — offshore assets, direct equity, cross-border reporting, active tax management — would be priced higher to reflect the genuine complexity involved. Both pay for what they actually receive. Neither subsidises the other.
| Client A — Simpler Structure | Client B — Complex Structure | |
|---|---|---|
| Balance sheet | R30 million | R30 million |
| Investment structure | Living annuity + local discretionary portfolio | Living annuity + local portfolio + offshore account + direct share portfolio |
| Cross-border considerations | None | International reporting, foreign tax, exchange control |
| AUM fee at 0.58% p.a. | ~R175,000 p.a. | ~R175,000 p.a. |
| Henceforward flat fee | From R36,000 p.a. | Higher — reflects genuine complexity |
The same logic applies across all client types. A professional with a straightforward accumulation plan pays less than one with a business interest, a discretionary trust, and an offshore portfolio — not because we value them differently, but because their situation genuinely requires more work. The fee is a reflection of that work, not of their wealth.
Frequently Asked Questions
What does a flat fee financial advisor actually charge in South Africa?
At Henceforward, annual fees start from R30,000 for professionals and entrepreneurs, R36,000 for retirees, and R120,000 for family office and high-net-worth clients. These are minimum starting fees — actual fees depend on the complexity of your financial situation, not the size of your portfolio. All fees are agreed in writing before any engagement begins.
Is flat-fee advice better than AUM-based advice?
For most clients with meaningful portfolios, flat-fee advice produces a better outcome on two dimensions: cost and alignment. The fee doesn't grow automatically as your portfolio grows, and the advisor has no financial incentive to recommend one product over another. For a client with R10 million or more invested, the cumulative saving versus a 0.5% - 1% AUM fee can be substantial over a 10 to 20 year period.
Does a flat fee include investment management?
At Henceforward, the flat fee covers financial planning, advice, and ongoing investment management — it is a comprehensive annual engagement, not a one-off plan. Underlying investment costs (fund manager fees and platform costs) are separate and disclosed transparently. The total cost picture — advice fee plus investment costs — is always presented before any investment decision is made.
How do I know if flat-fee advice is right for me?
Flat-fee advice makes most sense for clients with investable assets above approximately R5 million (professionals) and R15 million (retirees), where the advice scope justifies the annual fee and where the saving versus AUM pricing becomes meaningful. Below that threshold, the minimum fee may represent a disproportionate cost relative to the portfolio. If you're unsure, we're happy to have a straightforward conversation about whether we're the right fit.
Do you charge separately for financial planning and investment management?
No. At Henceforward, financial planning and investment management are integrated within a single flat fee. We don't separate them because we believe they shouldn't be separated — an investment strategy that isn't grounded in a financial plan is just portfolio management, and a financial plan without investment implementation is just a document. The two work together, and our fee reflects that.
Final Thoughts: What You’re Really Paying For
The fee you pay for financial advice is not just a cost — it’s a signal about what your advisor is actually being paid to do. In a commission model, they’re paid to sell products. In an AUM model, they’re paid to grow and retain assets. In a flat-fee model, they’re paid to give you good advice. The incentive structure shapes the behaviour, whether anyone acknowledges it or not.
At Henceforward, the flat-fee model isn’t a marketing position — it’s the way we’ve chosen to structure the firm because we think it’s the right way to do this work. It means we can recommend paying down debt when that’s the right answer, suggest transferring assets into a trust even if it reduces the portfolio we manage, and tell you when your current structure is working well and doesn’t need to change — without any of those recommendations costing us anything.
If you’re evaluating your current advice relationship, or looking for a different approach, the What Makes Us Different page sets out how we work in more detail. We’re also happy to have a direct conversation about whether we’re a good fit for your situation — no obligation, and no sales process.
If you’re currently paying an AUM-based fee and want to understand what that’s actually
costing you — or you’re looking for advice that’s genuinely structured around your interests
— we’re happy to talk through it. It’s a straightforward conversation, not a pitch.
This article is for informational purposes only and does not constitute financial advice.
Henceforward (Pty) Limited is an authorised representative of Graviton Wealth Management
(FSP 8772). Tax figures referenced are indicative — verify current rates and thresholds at
sars.gov.za before making any decisions. Exchange control allowances are subject to SARB
policy. Consult a qualified financial or tax advisor for advice specific to your circumstances.
