The FCA based its report on a survey, carried out in November 2015, of 233 firms active in providing financial advice on retail investment products. This included financial advisers, networks, appointed representatives, banks and life companies, and represents approximately 21% of the total number of advised retail investment product sales transactions within the population of ‘relevant firms’.
In charging for investment advice, the median initial percentage fee was 3% only for investments up to £100,000. The charge declined to 2% for investments between £250,000 and £500,000, and to 1% for investments above £1 million.
In terms of the spread of charges, the FCA’s analysis showed that the ‘middle’ 90% of firms charged between 1% and 5% for advice on investments of up to £10,000, and between 1% and 4.5% for advice on investments of between £30,000 and £50,000.
So the 3% cited in Sector Views refers to the lower net-worth clients who make up the majority of firms’ client banks.