Chartwell Investment Management is seeking to poach new clients by promising to charge only half the...
Chartwell Investment Management is seeking to poach new clients by promising to charge only half the annual renewal commissions which other IFAs pocket.
In addition, Chartwell is setting out to justify the charge in the first place by giving customers an on-going service. "There are many investors out there who get no ongoing service at all," says Pat Connolly, director at Chartwell.
Chartwell has established a Cashback Service, inviting customers to re-register or transfer their existing funds from their current adviser to Chartwell. "It's a straightforward process for investors. They just need to re-register the funds with us, and we'll put their fund details on our system".
Renewal commissions are intended to reward advisers for ongoing attention to the funds, says Connolly. However, he says in many cases, clients are having renewal fees deducted from their investments and getting no ongoing service.
He estimates that based on a typical annual renewal fee of 0.5%, up to £400 million is going into advisers pockets as renewal fees, much of which is not justified. "We guess well over half is taken without providing on-going service," says Connolly.
He says clients who join the cash back service will be charged 0.25% annual renewal fees, and Chartwell will endeavour to offer clients ongoing services, such as keeping clients informed on changes within the fund, and advising on what they should be doing with their investments. "We have the resources to know about all the funds in the market," Connolly notes.
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected