Why a percentage? Because it works

Brian King (FA 26 February) has invited me, and others, to justify advisory fees expressed as a percentage of the value of a client’s investment assets. I have set out below the agenda we use for every client update meeting (once or twice a year depending upon their requirements).

1) An update of your financial situation and any changes to your financial objectives;

2) A strategic review of your portfolio examining the asset allocation mix;

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3) A review of the underlying investment funds and an examination of their on-going suitability;

4) A discussion of the investment recommendations we may make to you;

5) A review of any debt you may have and how that might be managed;

6) A review of your income tax, inheritance tax and capital gains tax position;

7) An update of your pension entitlements;

8) A review of any protection plans you have;

9) A review of your estate planning, wills and power of attorney;

10) Sorting out your paperwork (what to keep and what to get rid of);

11) A wider family view (children, grandchildren and elderly parents or relatives) and their needs;

12) Updating your professional connections (accountants and solicitors)

The agenda merely scratches the service of the intensity of what we do. Why a percentage? Because it works, as it aligns the payments to us with the performance of the investments (just like all fund managers, stockbrokers and discretionary fund managers) but we actually do tons more for our clients than they do.

It is also profitable for us and as a business we need to make profit to pay our shareholders (it is called being in business) and meet the increasing cost demands.

Nick Bamford

Chartered Financial Planner,

Informed Choice,

Cranleigh, Surrey