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IFA drops initial fee and sees client assets return to the fold

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IFA drops initial fee and sees client assets return to the fold

Newbury-based Meridan Park Associates has removed its initial fee for clients with more than £150,000 to invest in a bid to capture more assets.

Meridan director Bruce Foskett said he was not seeking to attract new clients, but to engender more loyalty from his existing client base.

‘We are experimenting on not making any advice charges on new investments at all,’ he said.

‘We used to work on 1% [initial] plus 0.5% [ongoing]. Now we’re not taking the 1%, which seems to be working quite well. People seem to be keen to invest. One or two clients who have stuff elsewhere are looking to bring it back into the fold.’

‘We have offices at home and we know how much it costs to run the business on a percentage basis. Ongoing 0.5% seems quite profitable. We’re looking for long-term relationships with clients,’ he said.

Former New Model Adviser® cover star firm Meridan started charging a 3% initial advice fee in 1996, moving to 1% in 2000, before cutting the initial charge in the beginning of this year.

The firm will still levy an initial charge of 3% for clients with under £50,000 and 1% for clients with a portfolio between £50,000 and £150,000.

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