West Riding Personal Financial Solutions managing director Neil Liversidge has called on fee-only advocate Towry Law to justify how the firm’s fund charges differ from initial or trail commission.
In an open letter to Towry Law chief executive Andrew Fisher, Liversidge says Fisher has set himself up as “an arbiter of what constitutes professionalism” and must validate his credibility.
He said: “My understanding is that whereas you invoice your hourly rate charges, the charges you take from your funds of funds are taken direct by Towry Law, so the payments are made in the same way as is commonly the case with initial or trail commission from investment houses and insurance companies.”
Liversidge, whose business operates on a fees-via-offset basis, also asked why Towry Law’s fees are relatively high.
Fisher says his firm charges time-based fees for independent advice and a “percentage of asset-based fees” for discretionary investment management.
“Both are fees paid by Towry Law clients to Towry Law. The idea that they are a commission paid by Towry Law to Towry Law makes no sense. Towry Law will never be the cheapest. Cheap rarely means the best, or even good. We focus on value for money,” he says.
Highclere Financial Services partner Alan Lakey says :”Charging a set-up fee which mirrors funds under management is the same as taking initial commission. Charging an annual fee that mirrors the fund’s value is identical to taking trail commission.”