Miller says his new business, Spencer-Churchill Miller Private, which he launched in March, will look to revolutionise the private client wealth management industry.
The first product will be run in the same vein as a managed pension fund. The product will have a long-term bias towards equities with a benchmark exposure of 70 per cent. Bonds and cash will account for 22.5 and 7.5 per cent of the portfolio respectively.
The second offering is set to be an absolute return offering that will be managed on a more aggressive basis, with the aim of beating cash by 5 per cent. Both will make use of a number of large and liquid ETFs and will have a minimum investment of £1m. The two products will have an annual charge of 0.75 per cent with a performance fee of 5 per cent.
All investments will be held in the client’s own name via Pershing Securities Limited, a Bank of New York Mellon Corporation subsidiary.
Research from Spencer-Churchill Miller Private shows that the wealth management sector is growing but Miller says many clients of wealth managers have received a dreadful service which has been highlighted by the recent fall in markets.
He says: “The status quo of the City has been maintained by taking advantage of clients’ loyalty through poor performance often being combined with high management charges and dealing costs.
“We have been astonished why various fund managers should unashamedly charge their clients various mark-ups from third parties rather than just receive a pure investment management fee for offering a pure investment service.”
Values to Vision Financial Planning founder Nick Lincoln says: “I agree that active management charges are too high but I feel a 0.75 per cent annual management charge for a set of ETFs is also pretty steep.”