Adviser blasts Sesame over management charges

Sesame’s 42 per cent fee hike this year was an unnecessary surcharge on members, Cornwall-based financial planner Andrew Dawson has claimed.

He said he disputed Sesame’s claim in 2013 that it needed to raise fees to pay for a £1.2m implementation cost for a new in-house practice management system. At the time, the network wrote to members saying that using Iress’s Xplan system would push fees up.

Sesame figures showed the fixed weekly charge rose by 35 per cent, with 7 per cent in variable charges, taking the weekly payments from £44.20 to £62.60 a week.

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Mr Dawson, who is in the process of leaving Sesame, said he had lost trust in the network’s claims, saying: “At the time, Sesame had 1,254 appointed representatives. The increase in cash terms was £956.80 yearly for each AR, giving Sesame an extra income of £1,199,827.”

He said that even if, for example, Sesame had employed four developers, two designers, a project manager and two administrators to develop Xplan, based on his own assumptions, the staff costs would only amount to £445,000 a year.

Mr Dawson added: “So Sesame’s assertion that £1.2m a year was needed for this is evidence of incompetence.

“The figures did not add up then, and now Sesame has just had to pay a fine to the regulator over ‘pay-to-play’ revelations, they appear to add up even less.”

In November, Sesame paid a £1.6m fine after the FCA found it promoted its own commercial interests over its clients by getting providers to pay to appear on its panel.

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A Sesame spokesman said: “As we explained to members, the cost of operating a robust model that meets regulatory demands continues to rise.

“SBG announced plans to launch Xplan in 2011, which was part of SBG’s multi-million pound investment, and the group continues to commit significant resources to developing and delivering its management system to advisers and their customers.”