James Hay overhauls pricing structure


James Hay has overhauled its pricing structure across a number of product ranges in a move which favours larger investors.

The firm has increased charges for the lowest investment tiers and reduced fees for the higher band by 0.04 percentages points.

For its Modular iPlan, the firm has amended ts tiered structure with platform charges starting at 0.25 per cent on the first £300,000 investment, compared with 0.18 per cent on the first £500,000 currently.

Charges then reduce in stages to 0.01 per cent on investments over £1.5m, reduced from 0.5 per cent.

Changes to James Hay IPS Managed Portfolio Service will start from 28 April, while for the Modular iPlan changes will take effect from 31 May.

Headline charge for Modular iPlan will reduce from £195 to £175 for investments up to £200,000 and waived completely for investments over £200,000.

The existing £50 fee for contributions and the £50 per cash transfer-in fee will be removed.

Taken altogether, James Hay says the new pricing structure will result in an average annual increase of less than 0.1 per cent.

Additional charges will be applied for Sipps in drawdown and will only be applicable to those customers using capped drawdown. These will increase from £100 to £150. A drawdown closure charge has also been added at £100.

On the additional Sipp charges, the firm says: “This new pricing structure remains in line with James Hay’s guiding principle that only those customers using certain product features and services should pay for them. Those who do not, will not cross-subsidise those who do.”

Currently over 250 adviser firms use James Hay on a regular basis while around 740 firms use it in combination with other platforms, and mainly for its Sipps.

James Hay chief executive Alastair Conway says the new pricing structure will result in a “modest” increase for most customers and are a result of “a bit of correction coming in the market”.

Conway says even after the changes, the firm is still five basis points below the market average.

A James Hay £500,000 portfolio will be charged 0.23 per cent, while the industry average has a charge of 0.3 per cent, according to The Lang Cat.

In November IFG Group, James Hay’s parent firm, said the platform was to review its pricing structure for 2017 as low interest rates were expected to hit its second half revenue this year by more than £1m.

Conway says the platform will continue to invest in its technology but will not go through “a massive replatforming” exercise like others in the market.

He says: “We are focused on getting the basics right and have put service top of the list. It’s important to note these changes have very little impact on our competitive pricing position against our peers. We are still well priced – especially for our core market.”

Source: James Hay

Mixed Portfolio

SIPP – Lang Cat standard tables

Source: The Lang Cat