The financial advice industry in South Africa has a structural problem. Most advisors are still paid, at least in part, through commissions, trail fees, or asset-based charges that increase automatically as your wealth grows. The advice might be sound — but the incentives behind it aren’t always pointing in your direction.
Fee-only financial advisors break from this model entirely. They charge you directly for the advice they give, and they don’t earn anything from the products or platforms they recommend. It’s a simple idea with significant implications for the quality and objectivity of advice you receive.
This guide covers what fee-only advice actually means in a South African context, how it differs from other fee structures (including flat fees and AUM fees), what to look for when evaluating an advisor, and why the model is gaining traction among investors who’ve started asking harder questions about what they’re actually paying for. If you’ve recently come across our fee-only financial advice overview or our piece on flat-fee financial planning, this article extends that thinking with a practical focus on how to identify and evaluate top advisors in this space.
- Key Definitions
- What “Fee-Only” Actually Means in South Africa
- Comparing Fee Models: Fee-Only vs Flat Fee vs AUM
- What to Look for in a Top Fee-Only Advisor
- A Practical Example: Why Fee Structure Changes Outcomes
- How Henceforward Approaches Fee-Only Advice
- Frequently Asked Questions
- Making the Right Choice
Key Definitions
Fee-only financial advisor
An advisor who is compensated solely by fees paid directly by the client. They accept no commissions, trail fees, or rebates from product providers, platforms, or investment managers — regardless of what they recommend.
Flat-fee financial advisor
A specific type of fee-only advisor who charges a fixed annual fee based on the complexity of your financial situation, rather than a percentage of your assets. The fee doesn’t change because your portfolio grew.
AUM fee (Assets Under Management)
A fee structure where the advisor charges a percentage of the assets they manage on your behalf — typically 0.50%–1.0% per year (ex. VAT). As your portfolio grows, the fee increases automatically, even if the advisory workload doesn’t change.
Commission-based advisor
An advisor whose remuneration is tied, in whole or in part, to the financial products they recommend. Commissions may be disclosed, but they create an inherent conflict between the advisor’s income and the client’s best interest.
CFP® (Certified Financial Planner)
The globally recognised professional designation for financial planners, governed in South Africa by the Financial Planning Institute (FPI). Requires relevant qualifications, a prescribed exam, supervised experience, and ongoing continuing education. Not all financial advisors hold the CFP® designation.
What “Fee-Only” Actually Means in South Africa
The term “fee-only” is straightforward in principle: the advisor is paid by you, and only by you. There are no commissions from product providers, no trail fees from platforms, no rebates from investment managers. The advice is paid for directly — usually as a fixed annual fee, an hourly rate, or a project fee — and there’s no secondary income stream influencing the recommendations you receive.
In practice, this is rarer than the industry sometimes suggests. “Fee-based” advisors — a meaningfully different category — may charge a client fee but still accept commissions on certain products or trail/AUM fees from platforms. The distinction matters. A fee-based advisor isn’t necessarily conflicted, but the potential for conflict exists in a way that it simply doesn’t for a genuine fee-only advisor.
South African financial services regulation (the FAIS Act and RDR-influenced reforms) has moved the industry toward greater transparency, but commission structures remain legal and widespread, particularly in risk insurance. Fee-only advice in its purest form — where the advisor’s entire remuneration comes from client-paid fees — remains a relatively small part of the market.
This is partly a supply issue: advisors who built their practices on product commission revenue face a difficult transition. It’s also a demand issue: many clients don’t know to ask the right questions, or assume all advisors are broadly the same. They’re not.
Comparing Fee Models: Fee-Only vs Flat Fee vs AUM
Understanding the differences between common fee structures helps you ask better questions — and spot the gaps in what you’re being told.
| Fee Model | How You Pay | Conflict Risk | Cost Predictability |
|---|---|---|---|
| Commission-based | Built into product premiums or investment charges | High — advisor earns more from certain products | Low — costs are opaque and spread across products |
| AUM fee (% of assets) | Annual percentage of portfolio value, typically 0.50–1.0% | Moderate — advisor benefits from keeping assets in managed accounts | Moderate — predictable in structure but scales with wealth |
| Fee-based (hybrid) | Combination of client fee plus product commissions | Moderate to high — depends on product mix | Moderate — fee portion is known, commission portion may not be |
| Fee-only (hourly/project) | Hourly rate or fixed project fee | Low — advisor earns nothing from products | Variable — costs depend on engagement volume |
| Flat fee (complexity-based) | Fixed annual fee set by complexity of your situation | Very low — no product income, fee doesn’t grow with assets | High — known upfront, doesn’t change without agreement |
The AUM model deserves particular scrutiny. On a R10 million portfolio at 1.00% p.a., you’re paying R100,000 per year in advisor fees alone — before investment management costs, platform fees, and fund charges. At R20 million, that’s R200,000 per year. The workload required to advise a R20 million client is rarely double that of a R10 million client, but the fees are. The model scales with your wealth, not with the complexity or volume of advice you need.
Flat-fee models — where the annual fee is set based on your actual situation rather than your portfolio size — tend to produce better alignment. The fee is agreed upfront, changes only when your circumstances change materially, and removes any incentive for the advisor to favour managed solutions over simpler, lower-cost alternatives.
What to Look for in a Top Fee-Only Financial Advisor
Here’s a practical checklist for evaluating any advisor who describes themselves as fee-only or independent.
1. Verify the fee structure — in writing. Ask explicitly: “Do you earn anything from the products or platforms you recommend?” A genuine fee-only advisor will answer no without qualification. If the answer involves commissions on insurance, trail income from a platform, or rebates from an investment manager, the advisor is fee-based, not fee-only. Neither arrangement is illegal — but the distinction matters for your decision.
2. Check for the CFP® designation. The Certified Financial Planner designation is the industry benchmark for financial planning competence. It requires relevant qualifications, a board exam, supervised experience, and ongoing continuing education. Not all financial advisors are CFP® holders, and the designation is meaningfully different from being FAIS-licensed. Look for CFP® after the name and verify at fpi.co.za.
3. Assess the scope of the advice. “Investment advice” and “financial planning” are often conflated, but they’re different services. Top fee-only advisors typically provide integrated planning: investment strategy, retirement income planning, estate structuring, tax optimisation, cash flow modelling, and risk cover — not just portfolio management. Ask what the engagement actually covers, not just what it might include.
4. Ask about independence. “Independent” in South Africa has a specific meaning under the FAIS Act: the advisor must be able to access and recommend products from across the full market, not just a tied provider’s range. This doesn’t guarantee objectivity — but it’s a necessary precondition for it. Ask whether the firm has any distribution agreements, shelf space arrangements, or preferred provider relationships that influence what they recommend.
5. Look at the client base and minimum thresholds. Most fee-only advisors work with clients above a certain threshold of financial complexity or investable assets. This isn’t exclusivity for its own sake — it’s a reflection of the engagement depth these models require. Understanding where you fit in a firm’s client profile helps you assess whether you’ll receive the attention and expertise the fee implies.
6. Evaluate the firm’s communication model. Ongoing financial planning requires regular engagement — not just an annual review. Ask how often you’d interact with the advisor, how decisions are communicated, how the relationship is managed across major life events, and whether you have a named advisor or rotate through a team.
A Practical Example: Why Fee Structure Changes Outcomes
Consider two clients, both with R15 million in investable assets.
Client A is with an AUM-fee advisor at 0.75% p.a. She pays R112,500 per year in advisor fees. Over 20 years, assuming that fee compounds at the same rate as the portfolio (roughly), the total advisor fee drag is material — running well above R3 million in nominal terms before considering the compounding opportunity cost.
Client B has a comparable level of complexity but works with a flat-fee advisor at R60,000 p.a. He pays the same fee whether his portfolio is R15 million or R25 million. His fee reflects the actual complexity of his situation, not his net worth. The cost saving compounds in his favour over time.
The difference isn’t trivial. At scale, fee structure becomes one of the most significant determinants of long-term outcomes — often more impactful than picking between individual funds. This is why the question “how does your advisor charge?” deserves as much attention as “what does your advisor invest in?”
It’s also worth noting what flat-fee clients don’t lose: advice quality, planning depth, or responsiveness. The fee model changes; the service doesn’t.
How Henceforward Approaches Fee-Only Advice
At Henceforward, we’re a fee-only firm in the full sense of the term. We earn nothing from the products, funds, or platforms we recommend. Our income comes entirely from the fees our clients pay us directly — structured as a flat annual fee based on the complexity of each client’s financial situation.
This means the fee doesn’t grow because your portfolio does. If your situation doesn’t change materially, your fee doesn’t either. When the complexity increases — a business sale, a major offshore restructure, a liquidity event — we discuss a revised fee openly. There are no surprises, and no incentive for us to favour complexity over simplicity in the solutions we recommend.
Both founders, Carl-Peter Lehmann and Steven Hall, hold the CFP® designation and have been in the industry since 2003. Henceforward is an authorised representative of Graviton Wealth Management (FSP 8772), which provides regulatory oversight and access to institutional-grade investment infrastructure — without dictating what we recommend to clients.
Our fees start at R30,000 p.a. for Professionals and Entrepreneurs, R36,000 p.a. for Retirees, and R120,000 p.a. for Family Office clients — reflecting starting complexity rather than a ceiling. For clients with substantial offshore assets, trust structures, or complex estate planning needs, the fee is calibrated to the actual engagement required.
We work with a deliberately small number of clients — retirees, professionals, entrepreneurs, and high-net-worth families — because the planning model we run requires genuine ongoing engagement, not a review-once-a-year relationship. If you’d like to understand whether the fit makes sense, a first conversation costs nothing.
For more detail on how the flat-fee structure works in practice, see our dedicated piece: Flat Fee Financial Advice: Transparent, Conflict-Free Wealth Management.
Frequently Asked Questions
What is the difference between a fee-only and a fee-based financial advisor?
A fee-only advisor is compensated solely through fees paid directly by the client ... no commissions, trail fees, or product incentives. A fee-based advisor charges a client fee but may also accept commissions or other income from product providers. Both are legal in South Africa, but only the fee-only model eliminates product-linked incentives entirely.
Are fee-only financial advisors more expensive than commission-based advisors?
The cost is often comparable — or lower — once you account for all the embedded charges in commission-based products. Commission doesn't disappear; it's built into the product premiums, fund charges, or platform fees you're already paying. Fee-only advice makes the cost explicit and separable, which typically gives clients a clearer picture of what they're actually paying.
Do I need a CFP® to get good financial advice?
You don't legally need your advisor to hold a CFP® — but it's the most meaningful professional benchmark available in South Africa. The designation requires relevant qualifications, a board exam, supervised experience, and ongoing continuing education. It's a reasonable filter for identifying advisors who take the planning function seriously, not just the product recommendation function.
What does a fee-only advisor typically charge in South Africa?
Fees vary significantly by model and scope. Hourly rates might range from R1,500 to R3,500 per hour. Flat annual fees typically start from R30,000–R40,000 p.a. for a professional or retiree with moderate complexity, and can reach R120,000–R360,000 p.a. for family office or HNW clients with complex estate, tax, and offshore structures. Most advisors are willing to outline their fee range in an initial conversation.
How do I find a fee-only financial advisor near me in South Africa?
The Financial Planning Institute (FPI) maintains a public directory of CFP® practitioners at fpi.co.za. You can filter by region and specialty. Beyond the directory, look for advisors who publish clear fee information on their website — transparency about costs before the first conversation is usually a reliable signal of how the relationship will be conducted.
Making the Right Choice
The advisory model you choose has consequences that compound over time. A fee structure that adds 0.5–1.0% per year in unnecessary cost, or an advice relationship where product incentives quietly shape the recommendations you receive, can meaningfully change where you end up financially — not through any single bad decision, but through a long series of slightly misaligned ones.
Fee-only advice doesn’t guarantee better outcomes. It removes a specific set of conflicts that make worse outcomes more likely. That’s a worthwhile distinction. The best advisors in any model are skilled, experienced, and genuinely committed to their clients’ interests — but the structure of remuneration makes it easier or harder to act on that commitment consistently.
If you’re evaluating advisors and want a benchmark for the conversation, the questions are straightforward: How do you get paid? From whom? For what? The answers will tell you most of what you need to know. For more on how we think about fees and what our model looks like in practice, see our fee-only advice explainer and our detailed flat-fee guide.
If you’re trying to understand what you’re actually paying for financial advice — and whether it’s the right structure for your situation — we’re happy to have that conversation. No obligation, no 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.