With the RDR now in full swing nationals and networks should be in a position to reveal the levels of their adviser charging propositions and the maximum limits they set for their advisers.
Perhaps worryingly, a number have declined to disclose this information with some saying they would not make their limits public.
Of those who have disclosed mandated adviser charges, there is a typical initial charge of around 3 per cent with ongoing charges ranging from 0.5 per cent to 3 per cent.
Personal Touch has the highest limit on initial charges in percentage terms at 7 per cent with charges capped at £5,000. Charges above £5,000 and ongoing charges above £3,000 will be reviewed by Personal Touch management before the sale is agreed.
PTFS says initial charges are run on a tiered basis with the 7 per cent maximum applying to lower investment amounts.
Money Marketing was initially told the PTFS hourly charge maximum was £350 although the firm now says the maximum is £300.
Towry only levies percentage fees for its fund charges with advice charged by the hour, with one free annual review.
Close Brothers, Towry and St James’s Place all have mandatory fees charged by all advisers.
Some firms set hourly fee maximums and a number of firms do not offer an hourly fee structure, saying there is little client demand.
Tenet does not set a specific upper limit but monitors charges. Distribution and development director Keith Richards says: “We have provided a reduction in yield guide demonstrating the impact on investment returns for all combinations of initial and trail, irrespective of how remuneration is made. Reduction in yield of over 1.68 per cent would require referral to compliance, although the majority of adviser charging submissions received before the end of last year were well within these levels.”
Sesame does not set any limits for advisers. A spokesman says: “We have guidance for firms to set their own charges but do not set any specific limits or fees as that is for individual firms to determine.” Sesame would not disclose details of the guidance.
AWD Chase de Vere head of communications Patrick Connolly says: “I would expect over the course of time some clients would move to hourly fees but as things stand I would say 90 per cent of our clients are looking for percentage fees.”
Consolidation firm Perspective allows charges of up to 3 per cent initial and up to 1 per cent ongoing. The firm, like many, says any hourly fees are up to individual firms’ discretion.
A Perspective spokesman says: “Perspective does not have an hourly fee per se. Where a client requires an hourly fee it depends on the experience of the adviser involved and as a group Perspective does not dictate that charge.
St James’s Place revealed its adviser charging structure in December which sees clients charged an initial fee of 4.5 per cent for bonds and 5 per cent for unit trusts, for advice and fund management, with an ongoing charge of between 2.1 per cent and 2.3 per cent.
Of that charge, advisers receive 3 per cent from the initial charge and 0.5 per cent ongoing.
SJP adds the bond adviser charge will have to form part of the 5 per cent annual withdrawal limit.
SimplyBiz chairman Ken Davy’s restricted national proposition Sandringham Financial Partners says its typical charge is 3 per cent upfront and 1 per cent ongoing. The firm says its typical hourly fee is £100 but there are no restrictions on hourly fees.
Last September, Foster Denovo launched its new advice structure through which clients are charged between £500 and £1,500 for full reviews and then charged up to 3 per cent initial and up to 1 per cent ongoing.
Foster Denovo also runs a lower level service called Select which has ongoing charges of up to 0.5 per cent subject to a minimum of £500 a year. Foster Denovo advisers can also charge an hourly rate if clients prefer of up to £300.
Intrinsic advisers charge between 3 and 5 per cent initial on investments up to £150,000, up to 3 per cent on the next £100,000 and up to 2 per cent on anything above £250,000. Ongoing charges range between 0.25 and 1 per cent and hourly fees range from £50 for an administrator to £400 for a chartered adviser.
Succession Advisory Services says it does set limits on adviser charging but would not disclose the details.
Lighthouse, Caerus, Bluefin, In Partnership and Positive Solutions also refused to reveal their adviser charging structures.
PMI Independent Financial Advisers director John Stewart says: “I think 3 per cent upfront is about right but if you are going to charge 1 per cent ongoing you need to be doing quite a lot for your money. I am wary of any firms refusing to disclose their adviser charging information.”