Towry Law

razzle321

I have a £100,000 to invest and have not used an IFA before.

I have had a meeting with a chap from Towry Law who has said that they can manage my funds for a 1% plus start-up fee plus 1% plus VAT pa to manage the funds and that I should expect other pa charges such as fund charges to take the total costs each year to 2%.

He seemed a nice chap and reaasured me that Towry Law don't take commissions etc.

My concern is this: His report on my finances (which I must pay for as Towry Law are timecost fee based) essentially just says that he recommends their 'Growth' profile, which is a 'off the shelf' invest in a broad set of funds. There was only a choice of four profiles and he admitted that most people choose profile 2 or 3. So i chose 3.

My point is that surely I am justing buying a product from Towry Law ie. their growth profile, and that the yearly 1% plus VAT for managing my money is a nonsense because the choice of investment is decided from the outset. And the report I have paid him for is just so that he can recommend his product.

Can any give me any feedback because I am very unsure as to whether this is normal, good value and whether I should proceed.

Thanks

R

dunstonh

Towry Law are not popular within the industry. Professional but not personal is often a good way of looking at them and perhaps this is reflected in their off the shelf investment options rather than custom built to your exact needs. i.e. they only have 4 profiles (yet many of us have 10 and even then you tweak depending on what sort of strategy would be best).

Whilst they harp on about fees, they are actually a hybrid commission as its percentage based rather than fixed amount. I have no issues with that as I work on a similar basis to that and it is an increasingly common method but 1% plus 1% is higher than many IFAs (typical maximum is 3% plus 0.5% p.a.(VAT not applicable) and FSA published average is 1.8% plus 0.5% p.a. (again no VAT applicable).

My point is that surely I am justing buying a product from Towry Law ie. their growth profile, and that the yearly 1% plus VAT for managing my money is a nonsense because the choice of investment is decided from the outset. And the report I have paid him for is just so that he can recommend his product.

Its collective costing. The fee for managing the defined portfolio is spread over the investors. The more you have, the more you pay.

I am sure you would have no issues with them at all but dont buy into their fees not commission bit as that is a red herring and not necessarily cheaper as shown. And do note that like many larger firms, they are likely to suffer higher staff turnover and that means a less personal service.

SiuLoong

Just to add another point of view, I've ended up with Towry Law after they took over the UK arm of the German finance company MLP, who my IFA worked for. They claimed to be 'profession specific', i.e my IFA only dealt with people from a couple of specific professions and hence had a bit more insight into their needs. From this point of view I'm talking about pensions, income protection, critical illness etc.. rather than investments (I understand pensions are an investment.. but anyway..). My IFA is very friendly and helpful, and guided me through an area that at the time I knew nothing about. Two years on I'm much more aware and informed, and still believe what I have are most suited to my needs. My fiance has recently also started a pension though him. However, its the IFA we are happy with not the company specifically, and if he were to leave for another company we would follow.

barak

Towry Law? Erm.....well...... perhaps better not to comment! Things may have changed in the last ten years.

pushkin7

TL have now increased their charges (or are about to) for their "wealth management" services which they claim is similar to that offered by private banks. For approx 400k the fees which used to be 1% p.a. are now going to equate to approx 1.5% p.a. ( there is now a tiered structure so that if you have 1.3million invested you start to pay less than before with the flat 1% fee structure). For me this is a 50% rise in fees (from 4000 to 6000 pounds!) at a time when I would expect no fee rises or even a drop - like our investments, which have dropped by about 15%. They also claim because of their expertise this is less of a drop than we could have encountered on the open market - I think this is why I paid 1%p.a to them and didn't put my money into the open market for free!
Is this fee rise reasonable and is TL comparable to others in the industry - either in expertise or fees! I don't know any other companies offering this sort of managed portfolio service apart from private banks which often want more than a million invested.

dunstonh

The service you have is called discretionary investment management. A lot of IFAs have the ability to introduce to that service. The banks are typically useless. I have taken loads of them over the years because they typically charge 1% on top and then use a load of unit trusts/OEICs which they also keep the natural trail commission on as well. Lloyds in particular are often heavy in Scottish Widows which is a mockery of the independent position DIMs are meant to have.

I dont know what the outcome will be but look up discretionary investment managers on google and see if there is any listed. (problem with that is that many are not going to have internet coverage as they work on introductions from IFAs).

Reaper

If your investments only dropped 15% then that is very good (if your are talking from their peak).

However they should not be invested so defensively that you miss out on any upturn.

If you feel their expertise justifies the fees then stay with them. If they get it right they can more than make up for it. Unfortunately many firms charge high fees even when their performance is rubbish.

djstash

When it comes to investments it is important to focus on performance and not get too bogged down with charges. Many funds that are available on the open market will charge you between 1-2% per year for as a management cost. If you compare this to Towry Law whos maximum charge is 2% per annum for investors with under £100k then this is a very reasonable charge. Towry Law are offering you a discretionary managed service which invests in more than 15 asset classes with many funds within each. so you are paying a similar price but getting a hell of a lot more for you money.. speaking to friends invested with TL you also get a meeting once a year with your adviser to discuss your position and also the performance.. because they dont take commission from products their is no pressure on making a 'sale' and churning your money around to generate income.

How many people have experienced that with IFAs?... everytime you meet there is a new and better product that your money should be moved to!! Was recently reading in FT that commission of up to 7% is still common when advisers 'sell' bonds... who pays for that??? we the customer do! Pushkin7 the open market option will never be free if you go through a non fee based adviser as they will take commission... you may not be made aware of it but I promise you it will happen and you are being charged!

foogirl1983

I have a CFP friend who has worked for two firms taken over by Towry Law. She has left Towry Law twice. That says it all really

I'd choose a local FP who might be more interested in a whole market approach tailored to the individual rather than an off the shelf "product".

Ian_W

djstash wrote: »

Pushkin7 the open market option will never be free if you go through a non fee based adviser as they will take commission... you may not be made aware of it but I promise you it will happen and you are being charged!

Hmm, Towry Law they've been in the news a bit lately, haven't they?

HERE - ooops, do they take commisssion, that'll be a YES then!

whiteflag_3

djstash wrote: »

When it comes to investments it is important to focus on performance and not get too bogged down with charges.

an excellent point well made -how do Towry Law's fund stack up against other similar funds - it would be really helpful if you can supply some stats.

Many funds that are available on the open market will charge you between 1-2% per year for as a management cost.

I dont know for certain, but there are 30,000 in the pan european universe, so i dont know is that enough?

If you compare this to Towry Law whos maximum charge is 2% per annum for investors with under £100k then this is a very reasonable charge.

Your Mrs Fisher arent you? Has Andrew told you to write this, as hes the only other person that I have seen that has said that?

Towry Law are offering you a discretionary managed service which invests in more than 15 asset classes with many funds within each. so you are paying a similar price but getting a hell of a lot more for you money..

Really most Multi-managers with alot more resources than TL can do that for 1.5-1.8% per annum. oh and they pay 0.5% per annum trail to the adviser out of that. What do TL do with their 0.5% because they charge a fee on top for advice?

speaking to friends invested with TL you also get a meeting once a year with your adviser to discuss your position and also the performance.. because they dont take commission from products their is no pressure on making a 'sale' and churning your money around to generate income

you must have the same friends as mine ? with all the things going on in the world we always find time to have a good chat about how TL gives them an annual meeting.

Once theyve churned into their funds they dont need to do anything else.

How many people have experienced that with IFAs?...

and how lucky they are!!!

Was recently reading in FT that commission of up to 7% is still common when advisers 'sell' bonds... who pays for that???

yes your correct - its was an article supplied by Towry Law

we the customer do! Pushkin7 the open market option will never be free if you go through a non fee based adviser as they will take commission... you may not be made aware of it but I promise you it will happen and you are being charged

But Pushkin7 Towry Law wont deal with if you havent got more than £100 K to invest. Dont know why that makes a difference if they are a fee based advisor but then ive not been brainwashed by Andrew Fisher.