Deutsche Bank Private Wealth Management is to charge clients a flat fee of £500 for the work it does around suitability across advisory and discretionary mandates as part of its new retail distribution review (RDR) rate card.
The wealth management arm, led by Tom Slocock (pictured), said it had sought to keep charges across its services in line with pre-RDR levels. It will levy the flat £500 ‘strategy advice’ fee plus VAT across its discretionary and advisory services for suitability work, regardless of the size of the mandate.
Miles Robinson, head of intermediaries, said: ‘Regardless of if you are advising someone who has £250,000 or £2.5 million, you should go through a process of meeting them, gathering the facts, interpreting them and making a recommendation, which takes time and incurs cost. It does not take more time if you have a greater amount of funds.’
Deutsche’s discretionary service starts with its unitised Dynamic Strategy Series, for which it charges an administration fee of up to 0.2% of assets alongside a 0.7% annual management charge and the cost of the underlying funds.
It levies 0.85% for the first £1 million in its Dynamic Strategy Portfolio, an actively managed portfolio comprising Deutsche’s multi-asset strategies.
Clients who use the managed portfolio service, which includes a relationship manager, will be charged 0.95% on the first £1 million. Its bespoke proposition starts at 1.1% for the first £1 million.
Alongside the ‘strategy advice’ fee, Deutsche charges 0.7% for investment advice on the first £1 million and a 0.3% administration fee, with 0.25% for equity transactions and 0.15% for bond transactions, both with a £50 minimum. For funds it charges 0.75% with a £100 minimum.
Its wealth advisory service is priced at 0.9% for the first £1 million, plus a 0.45% administration fee at this bracket. It will charge 0.35% of the transaction value for its transactional advisory service, with a 0.3% administration fee for the first £1 million.
Barclays, in contrast, opted to charge an annual fee of 0.75% for advice and custody on the first £1 million in assets as part of its new rate card, alongside an ‘advice execution fee per trade’, which is based on a percentage of the investment.
In comparison, others charge commission per transaction and a flat transaction charge, which can be around £20.
The same charges for equity, bond and fund transactions apply for Deutsche’s execution-only service, alongside a 0.3% administration charge for the first £1 million.
Although the team has sought to ‘keep pricing across the client base where it was prior to the RDR’, Robinson acknowledged that a small portion of the advisory legacy client book would be moved over to a new structure, as they may have formerly been on a commission-only basis. He added the removal of trail would not significantly impact revenues, due to the move into institutional units and passives in recent years.