Raymond James Investment Services has laid out a new bundled pricing model for its administration platform.
It now has four tiers, with rates starting at 0.30 per cent and falling to 0.10 per cent for higher balances, replacing the 0.33 per cent flat rate option previously available.
With this new option, the custody charge decreases for the portion of balances in each tier.
The model allows wealth managers to link clients’ household accounts, so that the tiers are based on the total relationship balance.
Custody charges do not apply to balances in the Raymond James Cash Account.
Example: Linked household accounts with a total value of £5,500,000 – fee calculated on the following amounts
£0 - £500,000
£500,001 – £1,000,000
£1,000,001 – £5,000,000
*Minimum annual custody charge - £300 per linked relationship.
This new pricing will run alongside Raymond James’ existing semi-bundled and unbundled charging models and will include up to 20 Crest and fund trades per year, averaged for all accounts operating under this pricing structure.
David Hazelton, head of business development for Raymond James, said the new option offers tangible benefits to those who are in a wealth accumulation phase of their lives and therefore currently have less available for investment.
He said: “In addition, by rolling trade charges into the custody charge, we are providing a simpler pricing structure and the tiering means this pricing model may be attractive to high net worth clients as well.
“We recognise that some high net worth clients may be better served by our unbundled or semi-bundled pricing structures,” he stated, adding: “This new tiered, bundled model is designed to provide wealth managers with another alternative and, as always, they can use multiple pricing models across different client segments, providing them with optimal choice in responding to their clients’ requirements.”
Abraham Okusanya, principal at FinalytiQ, said the new low pricing structure could be good news for some clients, particular those with basic requirements.
“However, having to pay additional fee for functionality like the CGT report, which are free on many other platform, isn’t a particularly great idea. For 30bps, I would have expected that service to be included, so the ‘bundled fee’ isn’t all that bundled then?
“Also, having three different pricing proposition introduces another unnecessarily layer of complexification for advisers, but nothing that can’t be resolved with a decent spreadsheet,” he added.