Chris Taylor, founder and managing director of the Investment Bridge told FTAdviser: “The levels of the fees that Reyker are stating they will impose does seem cause for concern. The average investment may be quite low, including many investors who will have simply made a standard ISA subscription.
“So fixed costs of £500-600 are high and, interestingly, are surely in excess of any level of fees that any third party provider would negotiate with Reyker today, under normal circumstances, for such services.”
Graham Devile, managing director of Meteor Asset Management, told FTAdviser: “We feel that the proposed charges seem on the high side and are currently exploring if we are able to offer advisers and their clients a cheaper alternative.”
Mr Barnwell said: “We are applying charges and they will be taking effect in three months time so giving consumers three months notice that charges will apply.
“We’ve been discussing this with the regulator for some while. In practice we needed to see what’s happening with Merchant and its parent so we will be levying charges only when plans come to an end.
“Obviously if we were dealing with a promoter we would expect to be paid monthly but from a consumer perspective charging tens of thousands of consumers every month isn’t a practical proposition.
“We are well financed so we can afford to lend them the money until then. Some of these plans will last for five or six years so this is a fairly long-term project that we are dealing with here.
“Most investors will have costs below and usually significantly below this intended plan maximum. Long-term investors with large investments should not have more than £500/£600 deducted per plan.”