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Barclays lifts lid on post-RDR adviser charges

by Danielle Levy on Nov 16, 2012 at 15:21

Barclays lifts lid on post-RDR adviser charges

Barclays has set out its stall for the post-retail distribution review (RDR) world with a new rate card for advisory clients.

For clients using its advisory investment service, the bank will now charge an annual fee of 0.75% for advice and custody on the first £1 million in assets, which then drops to 0.6% for the next £2 million, 0.5% on the next £4 million and 0.25% over £7 million.

On top of the annual management charge, Barclays is setting an ‘advice execution fee per trade’, which is based on a percentage of the investment.

In comparison, some competitors charge commission per transaction and a flat transaction charge, which can be around £20.

For structured products, Barclays’ execution fee starts at 0.7% on the first £100,000, and is tiered thereafter dropping next to 0.4%. Equities and collectives start at 1% for the first £100,000 dropping to 0.65%, while alternatives start at 1.25%.

The rate card has been driven by the onset of adviser charging as part of the RDR from next year, which introduces increased transparency, and the removal of trail commission on new fund holdings.

It is understood that all clients will be brought onto the new structure in time, although those with existing assets where the fee was built into historic holdings will not be double charged.

The bank is also charging 1.25% on the first £5 million for its advisory portfolio management service, which gives clients access to a dedicated portfolio manager. This then drops to 1% for the next £5 million. The service has a formal £3 million minimum investment requirement for new clients, while the bank said it ‘may charge a minimum annual fee totalling £37,500’.

Barclays has set its one-off financial planning annual charge at 2% on the first £250,000, which moves to 1% thereafter.

A spokesperson for Barclays said: ‘We have been writing to [clients] over the last week with details of pricing to ensure we continue to be fully transparent. We believe, through our “investment philosophy”, incorporating cutting edge behavioural finance and asset allocation techniques alongside global expertise in research and investments, we continue to offer a market leading service to clients, with clear, transparent and competitive pricing.’

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2 comments so far. Why not have your say?

sol trader

Nov 16, 2012 at 16:43

Am not much the wiser.. what is a "one off financial planning annual charge"? sounds like an oxymoron.

Are the percentages quoted "advice" fees to be levied on top of fund management AMCs or will you get fund management plus behavioural and asset allocation "advice" all for 0.75%? (plus no stock lending or borrowed against and all "real" assets in my portfolio please) - would be a good deal.

Have just had an email from a major provider offering help completing business under pre rdr rules in case it might be more tax beneficial for clients - surely they are not suggesting RDR could be detrimental to clients????

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alan nedas

Nov 17, 2012 at 10:38

Thank you Danielle.

How long before we have a full Report disclosing the charging structures of all the major Bank & so-called Wealth Management propositions?

Will Citywire take this on?

The real concern should be the clear distinction between INVESTMENT in its pure sense & FINANCIAL CONSULTANCY. To the detriment of the wealthy the INVESTMENT role more often than not, is incapable of providing the full caring & professional expertise that the Client deserves& which from my experience can only be provided by the competent IFA who builds long term meaningful relationships with the Client.

The real IFA to survive must demonstrate "Added Value."

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