£4,500 per household, per year.
First of all, we know what you’re thinking…..wow a financial planning company prepared to list their pricing! Well, pricing is really important to us as we believe excessive costs can seriously damage your wealth. You will find that a lot of financial planning companies will charge you a percentage of the investment/pension money you transfer to them. There are three problems with this:
- There is more likelihood of bias in their recommendations. After all, if you don’t invest/transfer they don’t get paid.
- The people investing larger sums of money are paying more for the same level of service as those investing smaller sums. Is that really fair?
- Ongoing percentage fees grow significantly over time for no extra work.
We know from experience that it does not cost a firm more to manage a portfolio of £5,000,000 than a portfolio of £1,000,000. So why should clients pay more for the same services?
Our fee (£4,500 per year) is based on our costs and a reasonable level of compensation for a professional service provider.
The fee is payable in monthly instalments (£375 per month) and can be deducted from the investments/pensions that we manage on your behalf.
More details can be found in our Client Agreement which can be downloaded here.
The Value Of Advice
Research from the International Longevity Centre – UK found that those who received financial advice in the 2001-2007 period had accumulated significantly more financial assets and pension wealth by 2012-2014 than people who did not get advice.
In fact, the group classed as ‘affluent’ in the survey and who had taken advice had 16% more in pension wealth at the end of this period.
Major investment firm Vanguard have produced a white paper called ‘Adviser’s Alpha’ which outlines the difference between the return that investors might achieve with an adviser and the return they might have achieved on their own.
There are 7 key areas where advisers add value and Vanguard’s research shows that over time this all adds up to around an extra 3% per year net returns for clients on top of what they might have achieved on their own.
In reality, this does not mean a straightforward 3% every year as some years the value added through advice will be larger and some years the value added will be less depending on what stage of life you are at.
How Our Fee Compares
According to the Financial Conduct Authority the typical ongoing fee charged* by most Financial Advice firms is 1% of the pensions/investments they manage.
The difference between a 1% fee and fixed fee can be huge, especially over time.
The example below shows the cumulative charges on a portfolio of £1,000,000 growing at 6% per annum for 25 years, being charged a 1% fee as opposed to a charge of £4,500 per annum increasing by 2% inflation each year.
The extra charges paid by the percentage fee approach are staggering. The client loses an extra £357,606 in charges over the 25 year period!
This example doesn’t take into account that most firms will charge upfront percentage fees for implementation work. These can range from 1%-5% of the money you invest.
We do not charge any initial advice fees. Just the one ongoing charge of £4,500 per year.
- There is no tie in period.
- No penalties to cancel the service.
- VAT not chargeable.
*Typical charging structures of other advisers as confirmed in the Financial Conduct Authority (FCA) Data Bulletin.