The provision of wealth management advice has changed quite dramatically over the past 5 to 10 years. Many of the insurance and investment companies with whom clients might have originally invested will have changed, either through merger or by acquisition.
Additionally, there have been significant changes in legislation and most people accept that further changes are yet to come. Take, for example, the area of pensions: the changes have been so substantial that the Chartered Insurance Institute now offers an examination on the changes alone!
After the Retail Distribution Review in 2013, the manner in which advisers charge their clients is now likely to be different for most investors. This has forced wealth management businesses to focus on the services they deliver, both at the start of a relationship and on an on-going basis. Commissions are finally being phased out, which means that client fee arrangements need to demonstrate value for money.
These issues can present a substantial dilemma for clients and it is easy to see how somebody might lose track of their finances. We pride ourselves in the clarity of our advice and how we deliver this to you. Quite frequently, we will be dealing with complex subjects and our intention is always to put clients in an informed position so that they can take decisions.
The delivery of proper, professional wealth management advice can be a time-consuming process. If you are dealing with French Duncan Wealth Management, you will always know how much you are being charged, and from where the charges will be met.
Our engagement process usually involves an initial discovery meeting, which will be at our expense. Once engaged, our advice will always be in writing but we will not lose sight of the fact that more often than not, our clients will wish to meet their adviser to discuss the advice.
We will provide you with an estimate of the likely fee, and frequently this can be agreed as a flat fee. We need to account for VAT on our fees and we will guide you on whether your costs will be accompanied with a VAT charge. We provide a specific information sheet detailing our fees and costs.
Our normal practice is to seek to render a fee for undertaking research on your affairs and for providing recommendations. This fee will be calculated according to the likely time we will need to spend on your affairs. If you then wish us to proceed to implement the recommendations, we may charge you a value-based fee, which will reflect the type, complexity and value of the business being undertaken. Most clients find this to be an extremely fair method of working.
In many cases, we can agree to have our fees settled from within your investments or pensions. This avoids the need to ask you to write a cheque or transfer cash and again most clients prefer this way of working. Depending on the work, it may be more efficient to charge part or all of our fees to different 'vehicles'. For example, it may be preferable to preserve the tax-efficiency of the funds held within an Individual Savings Account (ISA), trust or a pension fund, or perhaps a company may seek to settle fees for advice for an employee, which might allow VAT to be reclaimed.
It is possible that commissions may still be a factor in your affairs, although these are likely to diminish over time. Our view is that commissions belong to the client and can be used to offset any fee charges.
We can of course work on the basis of an hourly charge and our rates for each individual are published annually. In all cases, we will demonstrate to you that the fees and any costs associated with our services will represent value for money. This is fundamental to our principles.