SCM Direct has tweaked the fees on its digital offering in response to the upcoming Mifid II rules as it launches a new Sipp account.
The company, headed by prominent anti-Brexit campaigner Gina Miller and her husband Alan, claims the changes to the platform will make it one of the cheapest digital wealth managers in the market.
Total cost for clients will be 0.98 per cent, compared with a “typical” wealth manager who would charge a total of 2.71 per cent, SCM says.
The pricing changes mean that for a £10,000 SCM Direct portfolio clients will pay less than rivals Nutmeg or MoneyFarm, setting the price at 0.60 per cent a year, excluding underlying charges and transaction costs.
The firm has also lowered the investment entry level to £10,000 from £15,000 for general and Isa accounts and added monthly contribution of £50. In addition, the firm’s portfolios can be added in a Sipp starting from a contribution of £18 a year and maximum charges of £60 including VAT.
To comply with MifidII rules which require the disclosure of all costs of investing, SCM Direct has partnered with technology provider Hubwise to host clients documentation and show details on costs, performance and portfolio notifications.
The new service will be live from today.
SCM Direct co-founder Gina Miller says: “Mifid II ushers in a new dawn of consumer protection and transparency. This regulation is no surprise, yet firms have been bleating and foot dragging about the expense and complexity of doing the right thing and letting people know how much they are truly paying.
“If a boutique firm like ours can today launch a fully complaint service, there are no excuses.”
The news of the re-launch of SCM Direct comes as the Millers recently exposed the challenges of keeping a wealth managers profitable and competitive, citing the recent increased losses of of rival Nutmeg at £9.4m for 2016.
In a blog post, the firm expressed concern that robo-advice models are also too heavily reliant on small accounts.
The Lang Cat consulting director Mike Barrett says becoming 10 to 15 basis points cheaper is a positive step for SCM Direct, but on a £10,000 investment that discount equates to just £10 or £15 a year.
Barrett says: “No one is going to change the investment landscape by saving people a few pounds per month.
“The Mifid points are interesting, but are not really a differentiator. As they point out, everyone will have to comply, and not many clients are saying ‘if only my robo was Mifid II compliant'”.
Deutsche Bank’s exchange traded fund platform db X-trackers and investment manager SCM Private have linked up to launch a fund of ETFs. The db X-trackers SCM multi asset ETF provides exposure to a portfolio of ETFs and exchange traded commodities and aims to use asset allocation to accumulate returns over inflation. Allocation is determined on […]
SCM Private has criticised inconsistent portfolio disclosure across different regions by US fund managers with UK retail funds and warned that absolute return funds could be the next misselling scandal. Last month, SCM Private launched a new code of conduct to tackle fund fee transparency after suggesting investors are being hit with over £18bn of […]
Former New Star chief investment officer Alan Miller has set up an advisory offshoot of wealth management business SCM Private. SCM Financial Planning will follow the low-cost, index fund-based approach to investing used by the wealth management business. It will be headed by chartered financial planner Susan Hill, with investment management advice provided by Miller […]
A High Court judge says the FCA can submit evidence in a case that could shape how Sipp misselling claims are handled in the future. In the case, which started today, lorry driver Russell Adams alleges Carey Pensions missold him a self-invested personal pension. Carey Pensions is accused of using unregulated introducers to invest Adams’s […]
Studies have found funds can be too big or too small to outperform, suggesting size does matter The assessment of whether to invest in a certain fund is a tricky business. Bearing in mind roughly 90 per cent of active funds do not beat their benchmarks over periods longer than 10 years, the odds are […]
The following sorry verse embodies procrastination on a whole new level: “Hello there, my name’s Phil; I rap like a small bear writing a will [diligently]; Estate-planning, ninja-whooping IHT; Shame I’m not as bizzie [urban affectation] with the RLP.” These words were penned in response to my father’s short verse sent to me, after the […]