Santander UK has unveiled its model portfolio service following what it describes as significant customer demand.
The service is available to its private banking clients with a minimum of £150,000 ($197,000, €177,000) to invest.
Customers are advised on a range of 11 actively-managed model portfolios with varying risk ratings and time horizons.
Personalised face-to-face advice is provided to clients and they are also able to review their investments through regular meetings with their private banker.
Increasing importance
Charlotte Platts, head of wealth at Santander, said: “We are placing increasing importance on this type of service and we look forward to continuing to enhance our offering over the coming years.”
Each of the 11 models combine two dimensions of risk with a choice of investment time horizon; three to five years; five to 10 years; or 10 years plus.
The bank has worked with Santander Asset Management to develop the service.
This launch follows the development of the bank’s investment hub in 2016 and the introduction of its digital investment adviser in 2018.
Fee structure
The service has a maximum average annual ongoing charge figure (OCF) for each portfolio of between 0.55% and 1%.
In addition, alongside the OCF, there are the ongoing costs of providing the service (which include VAT where applicable).
For example, for an investment of £200,000, the annual ongoing servicing costs would be: 0.4% (max £1,500 per investment account) for adviser services; 0.3% for model portfolio services; and 0.25% for platform services; which totals 0.95%.
When combining these two costs, the total cost to the client will be capped at no more than 1.5%-1.95% depending on the model used.
Compare the market
International Adviser approached Brewin Dolphin to compare costs for its MPS.
On a Brewin Dolphin MPS’ balanced portfolio, the total charge is 1.09% (comprising DFM charge (inc VAT), OCF, transactional charges and incidental costs).
The firm also offers a passive plus MPS range, which is charged at 0.48% (comprising DFM charge (inc VAT), ongoing charges figure (OCF), transactional charges and incidental costs).
Both charges do not include any advice fees, as the advice element for Brewin’s MPS sits with the IFA and is subject to the adviser’s additional charges.
Santander’s MPS does comprise an advice fee.
