Andrew Day, director, Strategic Wealth Management
Manchester-based Depledge Strategic Wealth Management’s initial fees are fixed and calculated according to the time taken and complexity, based on hourly rates of £210 for Day and £180 for Meech.
Ongoing fees are either fixed or in tiered percentages: 0.5% up to £500,000, 0.4% for up to £1 million, 0.3% for up to £2 million and 0.25% on sums larger than that.
For the annual fee, clients receive at least one face-to-face meeting, proactive financial planning, two investment reviews, newsletters, market updates, and valuation and trading services.
To ensure profitability, director Andrew Day says he analyses figures such as time spent on each client and relies on information from back office system Intelligent Office to obtain that data quickly.
‘For a client with the average investment of £439,000, we typically spend 10 to 15 hours a year to provide that service, half of which is support staff hours. This results is a fee of around £2,200,’ he says.
‘However, a few clients with significantly higher amounts skew that average. We have a larger distribution of around 50 with significantly lower amounts but these are accumulators and require less ongoing work.’
This brings the average recurring income per client down to around £1,465. However, Day says he is happy to have such clients as they will be the £500,000 clients of the future.
Has he ever considered increasing charges? ‘It is a big service and we are competitive,’ says Day. ‘There is a downward pressure on costs in the market, and we want to offer that extra value for reasonable cost.’