Schroders Personal Wealth charge disclosure 'refreshing'

Schroders Personal Wealth charge disclosure 'refreshing'

Schroders Personal Wealth has been praised for clearly disclosing its fees and charges, which advisers have noted are largely in-line with its vertically integrated competitors. 

The recently-launched advice venture between Lloyds and Schroders published its charges on its website this week, including a 0.65 per cent ongoing advice charge for investments up to £1m. 

Schroders Personal Wealth, which has aspirations of becoming a top three financial planning business within five years, requires its clients to have a minimum investable assets of £100,000. 

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Ongoing advice charges decrease to 0.4 per cent for investments between £1m and £2m, 0.35 per cent for those between £2m and £5m and 0.15 per cent for amounts in excess of £5m. 

This would mean an annual ongoing advice fee of £650 for an investor with the minimum £100,000. 

One-off advice charges vary between 1.75 per cent, 0.75 per cent for amounts below £1m and between £1m and £2m respectively, with additional advice fees waived for investments above £2m. 

David Hearne, director at Satis Asset Management, praised Schroders Personal Wealth for disclosing its charges clearly - with Mifid II requiring advisers to breakdown all costs and charges associated with a client’s investments.

Mr Hearne said: "It is refreshing to see and I hope it will encourage other large vertically integrated firms to do the same.

"While the total price may be higher than a typical IFA charges, they seem in line with other vertically integrated firms."

But Mr Hearne said the company's success and its ambition to be a top three financial planning business would not be achieved as a result of their pricing.

He said: "I think it will come down to how well their advisers can work in conjunction with Lloyds Bank, their staff and their clients. Wealth management is still a relationship business for now."

On its website Schroders Personal Wealth said it was committed to providing "clear and transparent" pricing, giving an example of fees for its Personal Discretionary Portfolio Service which included a fund manager fee or between 0.5 per cent and 0.6 per cent. 

This service also includes an ongoing advice charge of 0.15 per cent and 0.65 per cent, a platform fee or 0.2 per cent and a discretionary fund management fee of 0.35 per cent. 

Alistair Cunningham, financial planning director at Wingate Financial Planning, agreed the ongoing advice charge at Schroders Personal Wealth was not particularly high. 

Mr Cunningham said: "It seems broadly comparable to ours. However, the advice we give is independent and we are also chartered financial planners.

"I believe most people are likely to be served at least as well, if not better by independent advice of the nature we give."

He added that the inclusion of a DFM service made Schroders' offering more expensive than his own firm's fees.

Mr Cunningham added it was "disappointing" the discretionary fee was mentioned further down the Schroders Personal Wealth webpage, which he said detracted from an otherwise clear explanation of the charges.