Saunderson House is coming up with a total cost of ownership fee structure that will include all advisory, platform, fund and investment costs.
The wealth manager and IFA is developing a total cost of ownership rate card which will lay out upfront charges for all investment costs and services.
Chris Sexton, investment director, said he hopes to come up with a range of models which will tell a client upfront how much they will pay, depending on their level of assets and services required.
"We are working on a total cost of services project at the moment which is about how much clients are paying across the board," Sexton said.
"It is about telling clients: ‘You have £x million of funds, what is it for your platform, your investment funds' annual management charge, your advice,'" he explained.
The firm has traditionally distinguished itself from competitors by charging an hourly fee, rather than a percentage of assets under management. However, as with most wealth managers, it has to add costs of funds and platforms on top.
The new structure will be clearer and give a total cost of ownership figure.
"We already do this to some degree, we just want to be frank about it so nothing is hidden," Sexton said, adding some private client stock brokers and wealth managers have charges "hidden under the carpet"
The move comes as fund groups are under increasing pressure to outline a total cost of ownership. The recent implementation of MiFiD II has made it compulsory for groups to disclose all costs to clients.
Sexton also said fees expressed as a percentage of assets under management can sometimes be misleading.
"The idea of hourly rates is interesting. We charge anything from £150-£500 an hour, and that sounds like a big figure compared with a competitor's 1% on assets under management."
"But on £10m assets, 1% is that is £100,000 a year. Now that is a big fee," Sexton explained.
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