When you’re transparent, you invite trust by revealing that you have nothing to hide.John Hall
We believe that transparency is key to any relationship. We work with clients to understand goals and objectives, but much of what we do is not seen and yet this adds immeasurable value to the proposition.
For this reason we are happy to disclose our fees, portfolios, fund research, and market thoughts on our website. There are very few financial planning firms who would be happy to do this.
We want clients to feel confident in the advice and service they receive, and that the fees they pay are fair and justified.
With this in mind, this is what clients can expect from us:
First meeting – this is an informal meeting where we listen to you to understand what your needs are and for you to get to know more about us. We can then both decide whether to go forward to the second stage.
Cost – there is no cost for this
Second meeting and recommendations – we look to understand more about your objectives and goals. We will review your existing policies and create a financial plan.
We will then sit down with you to discuss the recommendations. If you decide to go ahead then we will put these in place. You are not obliged to take up any recommendations.
Cost – if you go ahead the maximum cost is 1% of the value of the money invested/transferred
Maintenance and ongoing support – things change, so financial planning is an evolving process. Therefore we will meet at least once a year to ensure the plan remains on track.
Cost – 1% of funds managed (payable monthly in arrears – at 1/12th of the annual amount)
Mr John Doe invests £250,000 with LWM Consultants.
LWM’s initial fee for the financial planning recommendation is 1% x £250,000 = £2,500
LWM’s ongoing fee for maintenance and support is 1% x 250,000 = £2,500 p.a. (or £208.33pm)
We don’t hide costs. In most cases we use a “platform” to manage the plans and investments. The platform charge varies depending on the amount invested and other factors, including family members.
The table below outlines the current costs:
|Lower Band (£)||Upper Band (£)||SIPP, Bonds (%)||ISA, Personal Portfolio, Cash (%)|
The charge is on each tier so an ISA of £499,999.99 will have the following charge:
|£99,999.99 * 0.350%||£350.00|
|£149,999.99 * 0.310%||£465.00|
For values over £1 million additional discounts reduce the platform charge to 0.15%.
Where married couples have combined total wealth of £500,000, they can link accounts to achieve a reduced charge, and for close family members this can be done where at least one member has a value of £500,000.
Within the portfolios we use external funds. The fund managers will apply a charge which varies from fund to fund. The performance we publish considers these charges but not the platform and our fees.
So if the return in one year is 10%, then this assumes that the fund manager’s charge has been deducted already, but you should consider our fee and the platform charge which are deducted from the asset specifically. We recommend deducting 1.35% giving a net figure of 8.65%.
As an example of fund charges we have shown the latest portfolios. These can change and so are for illustrative purposes only:
Other charges may apply for self-invested pensions, and transactions in certain assets. We will outline any additional charges in our recommendations.
The ongoing service / support is as important as the initial meeting.
At your annual review you can expect:
- We assess your goals, plans and what is important to you
- If anything has changed, we assess your plan and make changes where appropriate to get you back on track
- We consider your tax position in terms of making best use of your allowances – capital gains, ISA, pension contributions, venture capital trusts etc
- We will review your life assurance and protection needs
- We review your risk appetite and whether it is still appropriate for you
- We review income (where paid) to ensure you don’t run out of money in later life
On 1 July we rebalance your portfolio. This involves switching funds where necessary and ensuring you are in the most up to date portfolio. We are completely open and send out full details in early May which outlines the changes and reasons for them. We also outline any additional costs and potential tax in making the changes.
Although we arrange to meet annually we know things change, and you can contact us outside of your review meeting if you wish. We are happy to help.
All of this is included in the 1% annual fee.
Where many advisers outsource their portfolios to third parties, we build our own, which gives us control over the funds used. This process is included in the 1% annual fee.
Full details of the portfolios are available on the website, as well as notes from our fund manager meetings.
Below are the aims of the portfolios:
|Aim||Benchmark||Time frame||Risk / volatility||Exclusions|
|Mainstream Portfolios||To deliver a return of between 6% and 8% gross over the long-term. This should, in a normalised environment, be above the higher rate of cash or inflation.||Basket of strategies that track an index (for example, the FTSE 100)||10-years plus||Dependent on risk profile of the portfolio.||No specific exclusions.|
|Positive Impact Portfolios||To deliver a return of between 6% and 8% gross over the long-term. This should, in a normalised environment, be above the higher rate of cash or inflation.||Royal London UK FTSE4 Good Index Fund||10-years plus||Dependent on risk profile of the portfolio.||Specific exclusions.|
|Aim||Benchmark||Time frame||Risk / volatility||Exclusions|
|Mainstream Income Portfolio||To deliver a yield of 3%+ p.a., with growth being secondary.||AFI Balance Index||10-years plus||Balanced approach.||No specific exclusions.|
|Positive Impact Income Portfolio||To deliver a yield of 2.5%+ p.a., with an element of growth. It can hold up to 20% in non-yielding strategies.||AFI Balance Index||10-years plus||Balanced approach.||Specific exclusions.|