View more on these topics

Quilter Cheviot and Rathbones create discretionary pricing comparison model

Guide to Equity Release

Quilter Cheviot and Rathbone Investment Management have come together to create a transparent pricing comparison model to calculate the total account costs of using a discretionary investment management service.

The move to create the model is said to come as financial advisers increasingly want to understand total account costs beyond the annual management charge as part of their due diligence.

A survey of potential private clients commissioned by Rathbones revealed a high proportion of uncertainty concerning the exact cost of using a discretionary investment management service.

The price comparison model will seek to express total account costs as an annual percentage, not unlike the ongoing charges figure for funds.

It is hoped this model will encourage the creation of an industry standard for discretionary managed portfolios.

The calculation of a single figure in particular should ensure costs are transparent and the effects of deductions can be easily understood.

Quilter Cheviot executive director Pamela Reid says: “We feel there is a need to ensure that advisers and clients can compare apples with apples. For too long discretionary investment managers have responded to the same due diligence questions using a variety of assumptions, making it difficult for an adviser or client to see the difference in terms of total costs.

“Capita Financial Solutions are also keen to adopt this method for their new comparison tool, Fusion.”

Rathbones head of investment management Paul Chavasse adds: “We are keen to encourage other discretionary investment managers to adopt this methodology and have had a number of initial discussions with other industry participants.

”We believe that this level of transparency is essential so that the value of a discretionary investment manager is clear for the client.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment