An advice firm bought by Standard Life’s restricted national 1825 is still charging upfront fees of up to 4 per cent, according to a client service agreement seen by Money Marketing.
For clients on Cheshire-based Jones Sheridan’s standard service level, initial charges are 4 per cent, with a typical ongoing rate of 1 per cent.
Upfront rates drop to 1.5 per cent, with typical ongoing rates of 0.75 per cent for premier wealth management clients, but these must generate at least £2,000 in income for the firm.
Additional fees for services such as pension transfer advice (£500), annuity recommendations (£500) and regular premium business (4.5 per cent) are also levied.
The client service agreement reads: “Certain aspects of our work are subject to a minimum fee which will become chargeable at the point we provide a suitability report. We will offset this charge against any income we receive from the product provider after a policy has been set up.”
According to FCA data, the average advice firm charges between 1 per cent and 3 per cent for initial advice depending on client size, and between 0.5 per cent and 1 per cent for ongoing service.
From Sheridan to Standard Life
1825 completed its acquisition of Jones Sheridan in November, having first announced the deal to purchase the seven adviser, four paraplanner firm in July.
Jones Sheridan said it would move from independent to restricted status and rebrand “in time”.
An 1825 spokeswoman says that firms acquired by 1825 do not “immediately” move onto the 1825 brand and proposition.
She says: “During the transition period Jones Sheridan is still trading as Jones Sheridan and not yet using the 1825 brand, proposition or charging structure.”
Judging by 1825’s charging information, most initial fees will be lower than under the Jones Sheridan brand. Initial fees for 1825 can be as low as 0.14 per cent, but can increase to around 4.45 per cent from comprehensive, in-depth and tax-efficient financial planning on lower-value portfolios.
Ongoing fees may increase, however, as 1825 fees can be as high as 1.19 per cent. Ongoing charges under 1825 lowest cost plan appear to be 0.79 per cent.
According to 1825 chief executive Steve Murray, a client invested in an 1825 portfolio would typically pay a total of 1.84 per cent annually; 0.75 per cent for the investment and discretionary fund management service, 0.3 per cent for the wrap platform and 0.79 per cent for the ongoing advice service.
Jones Sheridan had not responded to a request for comment at the time this article was first published. The firm has since clarified that under a more recent client agreement, the maximum initial fees clients could be charge are 3.8 per cent which applies to investments of £25,000.