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View the article online at http://citywire.co.uk/wealth-manager/article/a636177

Regulation forces Brewin to shut advisory dealing service

by Danielle Levy on Nov 27, 2012 at 07:56

Regulation forces Brewin to shut advisory dealing service

Brewin Dolphin is to withdraw its advisory dealing service in a move it says has been driven by regulation.

The national wealth management firm, led by Jamie Matheson (pictured), is planning to withdraw the service by January in a move that coincides with the onset of the retail distribution review (RDR).

In a client letter seen by Wealth Manager, the firm explained: ‘The regulatory environment in which investment management firms operate has changed significantly in recent years and the responsibilities placed upon us have increased so as to provide investors with greater protection and clarity.’

It has offered clients alternatives in the form of its advisory and discretionary managed services, its new managed portfolio service (MPS) for clients with less than £150,000, alongside execution-only.

Linked to the move, the firm is also offering clients a ‘dealing with advice’ service which has been modified so that it is only available to experienced investors.

Charlotte Black, director of corporate affairs, said the team would decide whether clients were eligible for the service based on ‘know your client’ information.

She said there would be no job losses in relation to the firm’s decision to withdraw the advisory dealing service and added regulation had led to a reclassification of some of Brewin’s services in order to ensure clients have properly considered all of their options and were using the service best suited to their needs and objectives.

In the letter, the firm also reminded clients that besides its new MPS, all other services would be subject to a minimum charge of £1,000 a year plus VAT as of January 2013.

Ahead of the RDR, Brewin Dolphin has introduced a national rate card for clients and has embarked on a programme of shifting existing clients out of trail-paying units.

In comparison, Walker Crips, which offers a range of stockbroking and investment management services, said it has no plans to withdraw from advisory dealing.

3 comments so far. Why not have your say?

Johnny Bravo

Nov 27, 2012 at 08:58

So basically the new regulation that was brought in to get private clients a better and fairer deal has forced a national wealth manager to withdraw services for those at the lower end of the economic scale. You can't fault Brewin for this, i'm just surprised that more companies haven't done this too.

If the object of RDR was to totally screw over every person in the UK with less than £1m then i think we can declare it a roaring success.

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Anonymous 1 needed this 'off the record'

Nov 27, 2012 at 09:10

Advisory dealing is not just for less affluent clients. It is for those that appreciate input but like to retain some control. Brewin just want to control more closely everything they can be held responsible for. The managed portfolio service is very competitive for those at the lower end, as mentioned in the article above. Most know that discretionary management is a managed portfolio, house view with a nice lunch thrown in.

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Knowledgable insider

Nov 27, 2012 at 11:29

This will prove to be the tip of the ice berg when the FSA gets its teeth into what stockbrokers are doing from January 1st. Expect more and more visits to ascertain whether the FSA stringent rules are being adhered to. When this dopey Government finally realises what the FSA has actually managed to do (decimate a sector of the finacial market) maybe, just maybe they might actually do spomething tro reign in the unbelievable powers they hold. Too late for many thousands of practisioners and many businesses who will be have been forced out of the industry. Just remember which Government presided over this unholy mess at the next election.

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