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Fad valorem: Can alternative charging structures work in wealth management?
by Elsa Buchanan on Aug 21, 2013 at 11:54
‘I think non-contingent is very consistent with building a robust and profitable business model as it gives you a guaranteed return for your efforts. It potentially strengthens your business model in that you are recovering the cost of all the time you are spending,’ he said.
Rathbones’ head of investment management Paul Chavasse (pictured), on the other hand, believes the ad valorem structure is still valid, not least because it aligns potential remuneration of investment managers with the objective of growing assets under management.
‘Our current fee scale has a small fixed fee in it as an initial charge to cover everything because we felt it was a fair way of dealing with administrative overheads. If you were to extend an hourly charge for a discretionary service, it gives the client potentially less certainty,’ he said.
He pointed to a client survey that found that a percentage charge was still viewed as the ‘cleanest and easiest’.
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by Danielle Levy on Dec 12, 2013 at 09:03