UK-based wealth manager and private bank Coutts is changing its advice fee model.
This is part of the firm’s strategy to reduce costs for its clients.
Clients will now be charged a “one-off” flat fee, according to what they require from the bank.
Customers looking for financial planning will need to pay £5,000 ($6,532, €5,537) + VAT, whereas those seeking investment advice will be charged £2,000 +VAT.
Additionally, Coutts has removed implementation fees for its wealth and private banking clients.
Make advice accessible
The flat fees will not be tied to the complexity of the advice or planning required by single individuals and be the same for everyone, as this is the only payment they will face, the firm said.
An advice charge will only be considered if “their circumstances have changed to the extent that the original plan needs to change to meet their needs”, Coutts added.
Camilla Stowell, head of wealth management, said: “This is the next stage of our strategy of driving down costs for clients. We have been moving in this direction for some time.
“In 2016, we removed ongoing advice fees as, having reviewed what our clients need, we felt they should only be charged if advice plans need to change to meet their needs.
“We are always looking for ways to simplify many of the processes and requirements to delivering advice and so are now in a position to remove any implementation fee; meaning clients will only pay the one-off fee for our industry-leading advice.
“Our ambition is to make advice accessible for as many clients as possible. If simply topping up existing plans, for example, clients shouldn’t be charged – it doesn’t add any value for them and has an unnecessary impact on the outcomes they are seeking to achieve,” she added.
In competition with robos
Coutts said that the newly introduced fee structure positions the private bank as having the “lowest charge other than robo-only advisers” operating in the high net worth space.
Stowell continued: “When robo-advisers first entered the market, there was commentary that the technology will replace the human adviser.
“We didn’t agree at the time, and we still don’t; however, we strongly believe that technology can enable the adviser and provide better access for clients. We have been working hard behind the scenes on this basis to reduce the cost of delivery to clients.
“By reducing that cost, we think it fair and right to pass that benefit on to clients. Put simply, we do not want cost to be a barrier to accessing good quality advice.
“It is our responsibility that advice is at a fair price and our ongoing ambition is to make it accessible to as many private banking clients and wider customers across the Natwest Group as possible.
“This also chimes with our purpose to help address the UK savings gap.”
The move follows Natwest Group’s decision to bring all its wealth divisions, including Coutts, under one umbrella led by Peter Flavel, chief executive of private banking.
