Brooks Macdonald has dropped fees on its nearly £1bn ($1.29bn, $1.16bn) platform managed portfolio service.
The wealth manager will now target an ongoing charges figure (OCF) of 1% for active portfolios and 0.5% for passive.
The total OCF in its High Risk Portfolio Growth was 1.52%, according to its latest factsheet, while at the other end of the risk spectrum, its Low Risk Portfolio Defensive Income had an OCF of 1.39%.
Test the impact
Altus director Simon Bussy said any price cuts are welcome but once platform and advice fees are added the total cost to the client is still likely to be north of 1.5% or even 2% depending on the adviser fee model.
A press release announcing the changes described it as among the most competitive management and total fees for platform portfolios. Management fees have dropped from 0.3% to 0.25% for active and 0.2% for passive.
But Bussy said: “In uncertain times, and particularly for an investor with a more conservative attitude to investment risk, it would be important to test the impact these fees would have on their potential investment returns, and to validate Brooks’ performance against other passive and active propositions available in the market, not just their MPS peers.”
Competitors
In terms of rival MPS ranges, AJ Bell capped its OCF at 0.35% on six passive portfolios at the start of the year, while its “pactive” range, unveiled in February, has total fees ranging from 0.75% to 0.96%.
Brewin Dolphin used segregated mandates to slice fees between 17% and 27% in January 2018 with the global equity mandate OCF enjoying the largest reduction falling from 0.69% to 0.51%. Its cautious mandate became its cheapest portfolio on offer with an OCF of 0.50%.
Brooks Macdonald co-head of UK investment management Robin Eggar said: “Advisers are faced with the dilemma of providing a high-quality investment solution to their full range of clients whilst being mindful of the impact fees can have on client returns.
“By targeting a lower OCF for our Platform Managed Portfolio Service, we are providing an offering to advisers to deliver for their clients in a way that aims to ensure the total cost to the end client remains competitive.”
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