Are you getting value for money?
You’ve been using an investment manager for some time. But you’re feeling unloved, taken for granted and like you could get a better service elsewhere.
Unfortunately, this is a common complaint among prospective clients that we talk to. Often they are disappointed with the service provided by their current investment manager and annoyed by the amount they’ve had to pay for it.
Both parts of the service / fees equation are important. Poor service may mean your investment manager fails to understand your priorities, while high fees erode your potential investment earnings. When you’ve sought out an investment manager specifically to make your money work harder, being dissatisfied with either is hardly ideal.
Here at 7IM, in our Discretionary Service as an example, we believe every client is unique. We focus on what you want to achieve with your investment and make it work for you. Whether you want to preserve capital by beating inflation, or aim to add to your existing funds in real terms, we’ll work hard to understand your ambitions and how much risk you’re willing to take.
We’ll also give you the level of service that you rightfully expect – whether that’s an email, call or a face-to-face meeting. With the 7IM Discretionary Service you’ll have a relationship with someone whose name you know, and who you can call on at a time that suits you.
What’s more, our Discretionary Service fees are extremely competitive – meaning that they won’t impact your portfolio in the same way that others’ might.
To help illustrate our approach to service, we’re always upfront and transparent about our fees. We want you to understand how our charging structure works and we’re more than happy to answer any questions you may have on it, we would prefer if you asked. Can you really say that of your existing investment manager?
If you choose to invest with us through our Discretionary Service, you’ll be charged a percentage of your total portfolio as a discretionary service charge, for example 0.25% or £625 on £250,000 based on charges as at 21/03/2017*.
There’s also an Ongoing Charge Figure (OCF) for the funds purchased in the portfolio – again a percentage per year of the total invested in those funds. For example, currently our 7IM Balanced active fund charges 1.34% and the 7IM AAP Balanced fund charges 0.67% per year or approximately a total of £3,015 for the two combined on a £250,000 investment*.
Some of our competitors charge some pretty hefty fees by comparison. If you invested £250,000 with one of our unnamed competitors under the discretionary management service for example, you could expect to pay a service fee of 1.2% or around £3,000. Add to this a £20 dealing charge per transaction amounting to £400 annually and an OCF of 0.85% or £531.25, and you could quickly find yourself with a £3,931 bill.
Investing your £250,000 with a second unnamed competitor could make an even bigger dent in your finances. Here the combined fee could set you back around £5,276.25. This includes a discretionary service fee of 1.8% or £4,500, a tiered dealing charge (£245 on this investment) and an OCF of 0.85% or £531.25.
The object here is not to tell you we’re the cheapest – we’re not, but we try to deliver our best service for a reasonable fee. This is a secondary benefit of keeping you – our investors – front of mind. We charge you for a personal, predictable, high quality service. And because we are absolutely confident in our ability to deliver this – we will tell you in clear terms how much it costs.
Justin Urquhart Stewart
Co-founder and Head of Corporate Development
* Please note this sum is indicative and will be charged as a percentage of your assets – therefore these will fluctuate with your portfolio size, rising if your portfolio rises in value.
You should make sure that you understand the risks of investing which include the risk that your investment can fall in value and that you may get back less than you originally invested.
Seven Investment Management LLP is authorised and regulated by the Financial Conduct Authority. Registered office: 55 Bishopsgate, London EC2N 3AS. Registered in England and Wales No. OC378740.
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