Fees for liquidating a managed portfolio on death

howticklediam · 6 February 2018 at 5:08PM

A relative of mine has died and I am the beneficiary of the will. Some of the estate is in a portfolio managed by a well known wealth management company.

I don't want to continue with the management firm, so I want to sell the shares and other investments. As selling the shares now is on an execution-only basis, i.e. I am not asking for investment advice, can they charge me the very high commission rate that they charged my relative for an advisory service?

dunstonh · 6 February 2018 at 5:54PM

can they charge me the very high commission rate that they charged my relative for an advisory service?

Commission has been banned since 2013 on advisory services. They can only charge fees.

howticklediam · 6 February 2018 at 6:02PM

That's very interesting because I have seen the last statement and the "dealing commission" on a couple of trades was ~£270. When I questioned it, the manager said that was their discretionary dealing commission. (I will however check that it was for an equity and not some other investment)

When I look at the fund managers website, as you indicate, there is no mention of dealing fees, it's just a straight percentage.

My relative was quite old and had the portfolio for a long time, certainly before 2013, I wonder if they just didn't get round to changing the T&Cs?

dunstonh · 6 February 2018 at 6:27PM

That's very interesting because I have seen the last statement and the "dealing commission" on a couple of trades was ~£270.

That is not advice or advisory services.
That is a transaction charge. Commissions are still possible in non-advised areas.

Thrugelmir · 6 February 2018 at 6:46PM

howticklediam wrote: »

A relative of mine has died and I am the beneficiary of the will.

Who are the executors of the estate?

howticklediam · 6 February 2018 at 10:46PM

The executor is a family member.

The actual wording is "dealing charges" and it is a percentage, round about 0.6%. Both transactions I have in front of me are for exchange traded funds, and are large, so the fee is probably appropriate, but rather high in my opinion. I haven't seen a straight equity transaction yet, but I imagine it will be the same.

But if all I want to do is liquidate on a certain day and there is no other service being provided, shouldn't they do it at cost, or close to, which as we all know is considerably less.

dunstonh · 6 February 2018 at 10:57PM

But if all I want to do is liquidate on a certain day and there is no other service being provided, shouldn't they do it at cost, or close to, which as we all know is considerably less.

But that would mean doing something that takes time, creates costs and future liability as well as reporting for free. Why would any business want to take on all that for free?

howticklediam · 6 February 2018 at 11:18PM

Thanks for the reply. I thought there might be some legal standard practice for fees chargeable under these circumstances. It would seem not.

I understand why they would not want to do it cheaply, but as we beneficiaries didn't sign up for a discretionary service, why should we pay higher charges for what is essentially a disposal, which costs the management company very little indeed.

bowlhead99 · 6 February 2018 at 11:38PM

howticklediam wrote: »

Thanks for the reply. I thought there might be some legal standard practice for fees chargeable under these circumstances. It would seem not.

I understand why they would not want to do it cheaply, but as we beneficiaries didn't sign up for a discretionary service, why should we pay higher charges for what is essentially a disposal, which costs the management company very little indeed.

You havent signed up for any service. The service that the dead person had signed up for may have mentioned what fee schedule they would charge for services to his estate in the event of his or her demise (probate valuation, transfer out, liquidation etc).

If they don't offer an execution-only non-advised service to personal representatives / executors of the estate, they will surely offer re-registration or transfer to someone that does.

howticklediam · 6 February 2018 at 11:54PM

This follows a phone call today with the management company. There was no discussion of what was agreed in the T&Cs upon death, maybe they were errant in not dealing with that considering the age of the client (and presumably the age of many of their other clients).

Anyway, there was, at the end, a brief mention of transferring the assets, but no indication of the cost. Maybe that is the way to go, but they were a bit slow in making the suggestion.

Tom99 · 7 February 2018 at 12:25AM

Transferring to a cheap platform may save money. I did this a few years ago, there was a transfer out charge of £20 per holding but that was a lot less then the original firm would have charged to sell the shares.

Fees for liquidating a managed portfolio on death

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