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How much are the big advice firms charging?

New research has highlighted the wide variance in fees charged by large wealth managers and adviser firms.

Numis Securities has compiled the study based on an average portfolio of £120,000 consisting of £5,000 in a general investment account, £40,000 in an Isa and £75,000 in a pension wrapper.

Numis looked at charges from 10 firms including Coutts, Towry, St James’s Place, Barclays Wealth and Hargreaves Lansdown and included average fund management costs to give an overall cost of investing. 

Hargreaves Lansdown Portfolio Management service comes out with the cheapest overall charge, at 174 basis points, followed by Raymond James at 191bps.

The research also shows the falling average annual cost of the services of St James’s Place and Barclays Wealth over a 20-year period, due to their high upfront charges. Barclays Wealth and SJP have the highest 12-month charges, of 6.55 per cent and 7.48 per cent respectively, inclusive of all fund management fees, if a client only stays with the firm for one year.

SJP charges fall to an annual average charge of 1.94 per cent if a client remains with the firm for 20 years. 

Towry costs start out at 430bps for one year falling to an average annual charge of 288bps after 20 years. 

PMI Independent Financial Advisers director John Stewart says: “These charges do seem quite high. But when you look at some of the firm names involved maybe investors are paying for the brand. I would also hope these charges go down if people are investing large sums of money.”

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