Wealth Manager - Essential news for investment professionals

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Barclays sets out post-RDR stall with new advisory rate card

2
Barclays sets out post-RDR stall with new advisory rate card

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.’

Barclays declined to comment on whether its new rate card increased or decreased clients' fees.

Barclays’ wealth and investment division is also considering introducing administration fees for product providers across its advisory, discretionary and execution-only channels, arguing fund groups should bear the costs of administering portfolios rather than clients.

It is understood the fee will come out of the 75 basis points which fund groups typically charge on new RDR-ready share classes.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Play Tesco, Japan and the rise of the central banker

Tesco, Japan and the rise of the central banker

 Libby Ashby and leading wealth managers scrutinise the food retail sector, Japan’s consumption tax hike and political risk in the markets.

Play Colin McLean's mid-cap picks

Colin McLean's mid-cap picks

The SVM director and fund manager on his pick of the UK mid-caps.

Your Business: Cover Star Club

Profile: Psigma's Edinburgh boss on why he is in Scotland long term

Profile: Psigma's Edinburgh boss on why he is in Scotland long term

When Tim Wishart agreed to launch an Edinburgh office for Psigma he was not expecting to  head the company’s first overseas team

Wealth Manager on Twitter