Is it time to change from a wealth Manager aka True Potential to IFA or go DIY?

Albermarle

I can confirm that you fees you pay to True Potential are as follows:
- 0.5% annual service fee
- 0.4% platform fee
- 0.8% portfolio fee

For a fund of £185 K, the 'service fee' ( by which I assume they mean their advisor fee) of 0.5% is good

0.4% platform fee is a bit higher than you would expect

I presume the 0.8% portfolio fee is an average over different investments. For actively managed funds, it looks about right, but if your were invested in passive funds then it would be less than half of that.

So not excessive for an actively managed portfolio, using an advisor. However another advisor using a cheaper platform and passive investments would be a bit cheaper ( although the service fee could be higher)

A  DIY cost could be between 0.2% and 1.5%, but typically would be around 0.4% to 0.7%

cloud_dog

TallGirl said:

Thank you I have now got some sort of answer  

I can confirm that you fees you pay to True Potential are as follows:
- 0.5% annual service fee
- 0.4% platform fee
- 0.8% portfolio fee

Do we know if TP would be quoting the AMC for the 'portfolio fees' / growth funds @TallyGirl is invested in, or the OCF?

@Dunstonh do you know?

dunstonh

cloud_dog said:

TallGirl said:

Thank you I have now got some sort of answer  

I can confirm that you fees you pay to True Potential are as follows:
- 0.5% annual service fee
- 0.4% platform fee
- 0.8% portfolio fee

Do we know if TP would be quoting the AMC for the 'portfolio fees' / growth funds @TallyGirl is invested in, or the OCF?

@Dunstonh do you know?

To be honest, I don't know.

You would expect to see the MiFIDII layout of Platform/provider, Adviser, OCF, TC & IC and then total.  i.e. 5 sets of fees plus total.   However, if they use own-brand funds then they may hide some of those within fewer categories

TallGirl

Thanks both of you I have spoken to them today and they are sending me a break down. Sounds like the Investment fee is the Portfolio fee but I will get that confirmed. He did say that one varies depending on what it is invested in so that makes sense. I will update when I hear anything.  

Bobajobbob

I am also considering the transition you describe above as currently I split my investments and pension funds between a dedicated wealth manager, with discretionary investment powers, and a SIPP and GIA account that I manage myself in a small number of passive tracker funds.

The wealth manager has built a complex portfolio that I would struggle to manage myself and the management and execution fees are high. Trackers funds are obviously simple and relatively cheap to buy and hold.

If my portfolio managed by the wealth manager had outperformed the tracker funds by a noticeable margin over a number of years then it would be a no brainer to continue to pay the premium for the premium service however I am struggling to see the value. The bespoke portfolio is effectively constructed to replicate what can be bought off the shelf from the likes of Vanguard, depending on your risk profile and preference for FI vs equities, and accordingly performance has been in line with passive funds but with significantly higher costs.

You obviously need to make up your own mind on this and fees, service and performance may vary enormously between discretionary wealth managers but in my case and as my investments have grown I can simply no longer justify the fees. I could quite literally live off the annual fees myself so compounded the erosion in my total returns is significant.

TallGirl

Thanks for your thought Bobajobbob I still need to look at the performance against others but first I am trying to understand the fees. 

I have now had a reply with a break down of my fees for 2021 which was £519.56 for 1 product. It was also the year my money was transferred over so not the full amount. 

Looking at it it breaks it down as this

• Service Cost includes Advice Charge (0.50%)  and Platform charge (0.40%)

• Product Cost includes ongoing charge (0.65%) and transactional charge (0.02%)

This kind of matches up with the fees I was told:

- 0.5% annual service fee

- 0.4% platform fee

- 0.8% portfolio fee

Looks to me like the Portfolio fee have gone up but I think I shall have to wait until the 22 statement which I received last year at the end of March.

The app shows fees of just over £1900 once I know what is what I can obviously better make my mind up. 

I think this is an excellent time to learn more about finance and products as a starting point. I will return when I have the actual 2022 fees. Thanks to everyone who has commented so far. 

TallGirl

Hello me again hope you do not mind.

So as above I have an GIA and S&S ISA with True Potential. I also hold a Royal London Pension SIPP. It was set up by my previous FA and to be honest I had not idea True Potential was getting a free for that too. The fees are as follows from the annual statement:

Value £254,798 (increased by £6990 so not too shabby in 1 year)

Fees Feb 22 to Feb 23
RL charges £991.33 (equivalent to 0.40%)
Transaction costs £240.09

Adviser Charges £1240.45 I think that is 0.5% which is the same as their ongoing charges for their GIA and S&S ISA.

Obviously it costs to have a pension but it is the TP fee I am obviously looking at. When and if I go alone do I just tell Royal London I am no longer with them or is there some kind of notice period? Thanks

cloud_dog

I'm not sufficiently well versed in this area but some providers won't allow you to hold an account unless there is an associated adviser.  Unsure if RL is one of those providers or not, but I'm sure the more knowledgeable posters on here will be able to help.

Albermarle

cloud_dog said:

I'm not sufficiently well versed in this area but some providers won't allow you to hold an account unless there is an associated adviser.  Unsure if RL is one of those providers or not, but I'm sure the more knowledgeable posters on here will be able to help.

 I think  with RL you can not start a new pension without a financial advisor being involved, but you can manage the pension on your own, if you want ( I think )

mcc100

Albermarle said:

cloud_dog said:

I'm not sufficiently well versed in this area but some providers won't allow you to hold an account unless there is an associated adviser.  Unsure if RL is one of those providers or not, but I'm sure the more knowledgeable posters on here will be able to help.

 I think  with RL you can not start a new pension without a financial advisor being involved, but you can manage the pension on your own, if you want ( I think )

That's correct, once the pension is up and running with RL their services can be stopped at any time.