Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. 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 Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter