'Value is in the eye of the beholder': Sparrows' capped fee MPS approach

For Sparrows, it uses a capped fee model – lower fees up to a point, then a cap. It is 0.10% per annum, capped at £20 per client per month. "This is to blend the best of fixed and ad valorem approaches," Millington told PA. "Even fixed fees can create cross-subsidisation, because the adviser often does far more for a £5m client than for a £500,000 client." "Much of that extra work is driven by risk, retention and referrals - the dynamics of the business itself." Fees ‘should reflect risk' Sparrows has a view that fees should reflect risk. "What you charge is compensation for t...