Half of all investors are not sure about all the fees they are being charged by their wealth manager, research carried out for Netwealth by YouGov shows. Thirty seven per cent of those surveyed only knew “most” or “some” of the fees and charges they are paying for wealth management services, while 13 per cent are unclear about any of the fees and charges they are paying.
The research also shows that investors no longer tolerate hidden fees, with 72 per cent stating that “transparency around how fees are charged” is now the top important factor when choosing a wealth manager, followed by personal trust (67 per cent) and good investment performance (60 per cent).
According to the report, only 32 per cent of investors surveyed feel they don’t need financial advice, while 56 per cent see hassle-free access to information about their investments, as the top benefit of technology. This would enable them to see how their investments are performing at any time of the day and how much they are paying in fees.
In addition, only 35 per cent of investors have immediate access to information on the fees they are paying, while 44 per cent can only find it out through their annual (25 per cent), quarterly (14 per cent) or monthly statements (5 per cent), while 84 per cent of investors agree that fees matter to them and they don’t like to overpay, but 31 per cent said they are happy with their current provider even though they charge them more than they would expect.
Charlotte Ransom, CEO of Netwealth, says: “Given advances in technology, there is no reason why investors should not be able to access their portfolios in order to see how much they are paying for wealth management services and how their investments are performing.”
In a recent report the FCA recommended: “Consumers should now see the full costs and charges, expressed as a single fee, for most transactions in investment products, and on an ongoing basis.”
Ransom says: “Our research indicates that traditional wealth managers are taking advantage of their clients’ trust. They make it extremely difficult for clients to see how their portfolios are performing and to understand fully both the level and the impact of fees that can have such huge negative consequences on their long term savings.
“Technology is a powerful enhancer of modern wealth management services. It enables clients of firms such as Netwealth to interact with their portfolios at any time, and be fully aware of performance and how much they are paying in fees.”
“However, technology is not a substitute for the trust that comes with experienced people giving personal advice and making investment decisions on our clients’ behalf. At Netwealth, we believe that pairing technology with human advice is the most powerful combination of all.”