Fowler Drew fees

We charge flat fees for financial planning and ad hoc advice. We charge asset-based fees for portfolio management, at a very competitive level in our target market.  We show the schedule here. Other pages under Fees will allow you to estimate your own all-in costs if moving to Fowler Drew and to assess the value for money we offer. 

 

Our objectives

  • The virtue of simplicity and clarity
  • Minimising cross subsidies between clients
  • Minimising conflicts of interest arising from different charging methods
  • For equity and transparency: a consistent fee basis between ALL clients

We believe these are best met by varying the basis of charges by service element:

  • Flat fees for initial planning, independent of size
  • Asset-based fees for continuous portfolio maintenance
  • Flat fees for other planning or advice needs

 

Information about fees, charges and value

We show below our schedule of Fowler Drew charges for each element of our integrated service. These fees apply to all private clients. We have made a commitment to applying a consistent basis for all, as being fairest for each. The steeply regressive fee schedule ensures that the distribution of absolute fees between all clients is much flatter than is typical in the industry.

These fees do not apply to institutional accounts (charities and endowments), where the scale is both lower and flatter but with the same commitment to consistency between all accounts.

The intermediary service format for private clients means we do not need to apply VAT. The fully discretionary service for institutional accounts means we must apply VAT.

Continuous management of goal-based portfolios also entails third-party charges for custody, transactions and the products used as portfolio building blocks. Third-party costs and the resulting all-in costs, as well as an explanation of the variables that explain differences between clients are set out here. Fees are collected under ‘adviser remuneration’ arrangements: clients mandate the platform to pay our fee on their behalf from their assets on the platform.

Both our fees and third-party costs are taken into account in the model outcome probabilities for each client goal, as reductions in projected market returns. These net returns reflect the modelled changes in asset allocation over the life of the goal plan. Costs are not expressed as part of the spending budget, or required outcomes, for spending goals. Investment costs belong with the capital, not the uses of capital.

New private clients can typically expect all-in costs to be between 0.7% and 1.1% pa, compared with typical competitor costs between 1.0% and 2.5% pa. Costs may further be differentiated relative to conventional discretionary management business models that have to apply VAT to management fees. We believe our institutional fee scale also has a cost advantage relative to competitors, even when they also adopt a passive approach to market exposure.

Read about how to assess value for a portfolio service here.

Fowler Drew fees by service element

Initial planning:

  • Fixed (in £) as a function of scope and complexity
    • Typically between £2,500 and £5,000
  • Independent of asset values
  • Once only
  • VAT exempt where integral to setting up goal-based portfolios

Continuous portfolio maintenance:

  • Regressive fee scale as percentage of assets assigned to all goal-based portfolios:
    • First £3m   :   0.80%
    • Next £4m   :   0.60%
    • Excess       :   0.15%
  • Normally VAT exempt
  • Includes regular replanning of goals throughout the plan

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New financial planning:

  • New goals or radical changes to planning: flat fees, as for initial planning (VAT exempt)
  • Collaborating with third-party specialist advisers: time based (+ VAT)

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Arranging life insurance policies:

  • Percentage, with £ caps (paid as commission by insurers, part rebated)
  • VAT exempt

I like the fact they’re not trying to be clever – although the whole point is that that is what’s clever! Their explanation of mean reversion in markets is appealing as a way of thinking about investing. I’ve bought into their philosophy of low-cost ETFs instead of picking stocks. The focus on outcomes, as projected spend, is unusual and helpful. These all contribute to why I see them as a cut above the typical adviser.