Online financial adviser OpenMoney has cut its total annual fees to below 0.5 per cent in a bid to pass on a reduction in fund costs to its customers.
OpenMoney’s three portfolios follow a passive investment strategy using a mix of index funds from Vanguard, iShares and Fidelity.
The firm’s investment committee recently adapted the portfolios to enhance the global exposure within its equity holdings, resulting in a reduction in fees which it has now passed on to the end consumer.
| New annual cost | Previous annual cost | |
Portfolio 1 | 0.49% | 0.52% |
Portfolio 2 | 0.47% | 0.51% |
Portfolio 3 | 0.46% | 0.5% |
OpenMoney offers a hybrid of technology and human advisers to deliver regulated advice — for a fee — and unregulated guidance for free.
The fees cover investment management, the product wrapper, fund and transaction costs as well as ongoing financial advice.
Hayley Millhouse, head of adviser services at OpenMoney, said: “Almost three years after launching our service to bring affordable and accessible financial advice to all, we’re pleased to be able to reduce our fees even further.
“We’re committed to ensuring that our investment fees are as low as possible, while still offering a spread of investments across different assets, markets and geographical locations to try and minimise risk for our customers where possible.”
Ms Hillhouse said OpenMoney had worked with Finalytiq to review its portfolios prior to the impact of Covid-19, adding the market turbulence had not changed its investment strategy.
She added: “We understand that with the impact of Covid-19, people will naturally have questions about their investments.
“We offer ongoing advice and appointments with our financial advisers at no extra cost, so people can continue to get the support they need during these unsettling times.”
OpenMoney’s chief executive Anthony Morrow in January told FTAdviser the service attracted about 1,500 new customers every week and now served more than 45,000 clients.
The firm is keen to grow and last year announced it would branch into the mortgage and protection sector to offer advice to first-time buyers.
According to Mr Morrow this was likely to happen in June or July of this year, and the firm had set its sights on mortgage advice after it found most of its client’s goals involved saving up for a house deposit.
imogen.tew@ft.com
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