Majority of fee-based IFAs target £150-£200 an hour

Three out of five fee-charging IFAs bill clients between £150 and £200 an hour for advice, research by threesixty suggests.

threesixty surveyed 151 advisers across 133 of its client firms between November and December 2011 and found only 18% of respondents charge less than £150 per hour.

A quarter said they offer a fee option charge of £150, with 11% charging £175 and 13% £200 per hour. Another 14% offered rates at other levels between £150 and £200.

About 7% of those asked charge £250 an hour, 3% charge £300 and 1% as much as £350.

Another 5% charged fixed amounts between £210 and £295, with 3% offering a variety of ranges between £120 and £250.

Elsewhere, the research suggests a high degree of optimism about the future, with nearly two out of three of IFAs expecting no negative impact on income post-RDR.

Around 17% expect an increase in revenue, countered by 35% who expect a decrease.

Post-RDR, 68% of firms expect to charge for ongoing services via a percentage of assets, according to the survey. About 10% expect to charge an hourly fee and 14% a fixed fee per project.

Phil Young, commercial director at threesixty, says he expects most IFAs to collect fees via a platform cash account or product provider, rather than from a clients' cheque book.

"This may change in future years if customers demand to pay a pure fee or through a hybrid combination of some initial fixed fee followed by a lower percentage fee on submission of business, but we don't expect to see this change within the next three years.

"Most firms seem to be working towards a 1% of assets fee where possible, and this still seems a relatively safe option for now."

But many firms will experience some short term pain via a drop in income as they transition, he says.