Fees for liquidating a managed portfolio on death

howticklediam wrote: »

My relative's mental capacity was excellent until the end, but I would expect as a client's age advances that a highly-paid portfolio manager looking after 'long term strategic investments' might have raised the subject of what you want to happen after death. Although not strictly in their remit, I'm not sure where the boundary lies between IFA and full-blown wealth management, it would seem the ethical and at least thoughtful thing to do.

Right, and you haven't any evidence that they didn't communicate with your relative about what he/she wanted to do after their death or what their goals and objectives for the portfolio were.

For example, the portfolio might have low returns precisely because it was deliberately in low risk assets to avoid falls in value before it was given away to / inherited by the next generation. Or it might have a higher risk profile because the deceased was not bothered about being to spend the money and wanted to maximise potential growth to set the heirs off on a good path. There's no suggestion from what you've told us that the wealth manager / advisor didn't have those conversations.

And as part of that conversation, your relative might well have said "so, in practice,, if I die which I'm not planning on doing just yet, what will happen to the investments?".

And the advisor / relationship person may well have said, "well, the investments will still exist and remain invested in accordance with your existing strategy with all the future benefits, rights and obligations of those assets accruing to your estate, and the existing charging structure will continue. If your personal representatives decide they'd like to change the strategy, we can work with them to adjust the portfolio and manage the funds in a different direction. Of course, the executors or beneficiaries might not want to continue the relationship and if they want to take the assets elsewhere we'll let them do that, charging £x00 per line of stock to facilitate a transfer".

And to that, your relative probably thought, fine - if I'm dead I don't need it and what has been proposed doesn't seem unreasonable.

I don't think the management company are doing anything wrong

No, me neither. But your complaint seems to imply that they are not being ethical, and they should have considered the person's age when coming up with a portfolio and a charging structure, and they are probably ripping off their other clients who are also old. Whereas you don't have any reason to believe that they did not fully discuss with their clients what happens, or that the clients are unhappy that the default position on the event of death is that the assets remain invested until transferred out.

You mention your relative had "excellent mental capacity until the end". So, I have reason to doubt that they would have been unaware what the firm was doing. The relative may not have inquired whether at some unspecified point in future their heirs could take over the management of the assets and trade on specific dates and times on an execution-only basis via their service. But probably neither your relative nor the asset management firm thought that option needed discussing, if the options of keeping the investment as is, or signing up to advised services with a new strategy, or transferring it elsewhere, all exist. They probably didn't brainstorm every "what if" scenario because they can't predict what you are going to want to do.

At the end of the day it's up to them how they are perceived by their clients.

True. But if you are not their target market as you have your own ideas on what you want to do, and don't like their advice, service offering or pricing, it's no skin off their nose if they don't bend over backwards to please you.

If you come onto a DIY investment site and tell others that you don't like them because they didn't sell you an execution only service and didn't offer you a transfer until they'd ascertained you wouldn't be convinced to stay, again that is no major loss to them. Some (like me) won't perceive them badly for it ; others might, but weren't going to appoint them anyway...

I realise that bereavements are not pleasant so apologies if this doesn't come over as overly sympathetic. Similarly, don't shoot the messenger if we're just trying to give you some feedback on how this stuff might legitimately work. We're not employees of the firm concerned.