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Charles Stanley raises fees on 'enlarged regulatory burden'
by Elsa Buchanan on Sep 27, 2013 at 08:03
Charles Stanley has upped its charges, including a 50% hike in minimum fees for discretionary clients, in a move the firm says brings it in line with competitors in a more demanding regulatory climate.
Gary Teper (pictured), a director at Charles Stanley who heads the firm’s 32-strong branch network, confirmed the change and told Wealth Manager: ‘It is worth noting that we haven’t reviewed charges for over five years so we felt that now was the appropriate juncture to look at things, especially after many of our competitors reviewed charges more aggressively.
‘We didn’t want to front-run market developments. That is why we are at the back end of the queue for repricing and we still think we are good value.’
Charles Stanley will continue to offer both fee-only and a combination of fee and dealing commission options, and Teper is confident the increase in management fees will not ‘massively’ impact most clients.
The changes come in at the lower end of its discretionary offering, where the private client firm has upped its minimum management fee from £400 to £600, along with an increase in transaction charges from £10 to £15.
‘The increases come on the back of an enlarged regulatory burden in the sphere, but while we want to be accommodative, we still want to be rewarded for the services we provide. That is why we have looked at the lower end of our [discretionary] client base because we felt that the £400 minimum fee was too low a figure.’
For the fee-only option, rates remain unchanged at 1% on the first £1 million, 0.5% on the next million, and 0.25% thereafter.
There will be a change in the banding for the fee plus commission option, with the fee component at 0.5% applicable to the first £1 million, whereas previously it was tiered from £250,000.
Advisory dealing will still be offered, Teper confirmed, adding that Charles Stanley had ‘no desire’ to exit that market. However, clients will now face an annual charge of £400 in addition to the transactional fees.
On the financial planning side, Charles Stanley will continue offering Customer Agreed Remuneration (CAR) charges to intermediary clients; while for some direct financial planning clients, the most common 1.25% charge will remain unchanged.
Clients have been informed, he said, with a ‘majority’ of fee increases on the managed side set to come through gradually over 12 months, starting on 1 October.
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