Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Wealth exit fees on FCA radar

5 Comments
Wealth exit fees on FCA radar

The Financial Conduct Authority (FCA) has expressed concern on exit fees levied on wealth services, according to the Sunday Times.

The regulator’s worry, which also extends to fund supermarkets, comes amid concerns of the thousands of pounds investors are being asked to fork out to change the wealth provider.

The newspaper used St James’s Place, which charges a 6% transfer fee based on assets held on moves within a year, as an example of how expensive this can get.

On a £500,000 portfolio this would equate to £30,000. The fee falls to 5% on transfers within two years and is cancelled if a client remains with the firm for six years.

Bestinvest and Brewin Dolphin also impose exit charges and Hargreaves Lansdown charges £25 on each exit, while the likes of Standard Life Wealth do not levy a fee.

The FCA told the Sunday Times: ‘We are keeping an eye on exit fees. We expect them to be proportionate to the cost of actually exiting a client. They should not be barrier to someone choosing to go.’

The news comes amid a range of regulatory pressures on wealth managers.

Earlier this month the FCA’s thematic review into adviser charging found 73% of firms were not being clear about the cost of advice. The watchdog also said it could take enforcement action against two firms based on its findings.

The FCA has also recent launched a probe into wealth managers use of in-house funds.

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 HSBC's Stephen King warns of 'enormous' Brexit deficit danger

HSBC's Stephen King warns of 'enormous' Brexit deficit danger

Brexit will weaken the economy, fail to boost exports and lessen the country's ability to fund its 'enormous' deficit, according to HSBC's senior economic adviser Stephen King.

Play Premier's Smith: electricity and water can be a good mix

Premier's Smith: electricity and water can be a good mix

Exposing your person to electricity and water simultaneously is ill-advised, but what about your portfolio?

Play Citywire 10k: video highlights

Citywire 10k: video highlights

Citywire held its sixth annual charity run last week, which hosted over 200 people and raised £14,000. Here are the video highlights.

Your Business: Cover Star Club

Profile: gearing up for the shift from consolidation to start-ups

Profile: gearing up for the shift from consolidation to start-ups

‘I think the industry is evolving rapidly, but not necessarily as a whole,’ says the head of recently launched Charles Nicholson AM

Wealth Manager on Twitter