You'll bear three types of cost on the arrangement on an ongoing basis. Advice charges, Platform costs and fund charges.
All charges are based on the value of funds under management
- 0.5% p.a. for arrangements worth up to £500k
- 0.4% p.a. for arrangements valued between £500k to £1m
- 0.3% for arrangements valued in excess of £1m
Advice charges are levied on the whole balance at the applicable rate, not in tiers
Platform costs are approximately 0.3% up to £250k and then reduce – at £1m they are about 0.1% - this is on the whole balance, not in tiers
Fund charges vary, but as a start point you should consider inexpensive in-house mixed funds ( with an excellent track record) at 0.1%
- So at £250k your total costs will be approximately 0.9% per annum
- At £750k it will be approximately 0.68% per annum
- At £1.25m it will be approximately 0.50%
This is a total cost, for an advised approach, no VAT – and includes all you need ... income, reviews, rebalancing, all year round support as required.
Costs are so important, high costs act as a drag on performance.