Investors with Towry are urged to review their investments in light of high charges announced in May this year. The firm has overhauled its charging structure to an eye-watering 2 per cent on investments worth less than £200,000; pushing total first year charges close to 4.60 per cent.
Towry, which manages £4.5 billion on behalf of clients claims the new charging structure is designed to offer “greater simplicity and improve transparency”. However, the adjustment is applied by deducting notional unit holdings, meaning charges are not explicit. Clients are not given clear information, making it difficult for them to compare charges with other wealth managers.
Towry’s investment management is also questionable. Andrew Fisher, the chief executive of Towry has invested in a tax scheme, which is under investigation by HM Revenue & Customs. Mr Fisher said he regrets investing in the scheme and went on to say, “If I had known that the legitimacy of this scheme was going to be questioned, I would not have entered into it”. The big question is what kind of decisions is he making for his clients?
At Whitehall Partnership, we offer a service that is designed to uncover how investments are performing. We call it ‘Valueplus’ which helps clients understand the true extent of charges, including transactional fees on underlying investments.
Larger portfolios with Towry worth over £1 million are still too expensive despite discounts applied. Portfolio maintenance fees are 1.2 per cent; 20% higher than many wealth managers and 30% higher than Whitehall Partnership. Investors may overlook high charges if outweighed by superior performance, but sadly, investors remain disappointed. Underlying fund charges and administration costs are paid in addition to these fees, adding a further 0.8 per cent. Overall, clients with a portfolio worth £1 million could expect to pay annual fees in the region of £20,000.
Initial fees for opening an investment account with Towry are more in-line with other wealth managers, but overall is still expensive. Initial charges are subject to VAT at 20% pushing their standard charge from 1.5% to 1.8%. Clearly, there is very little investors can do to recover this cost if they decide to move their investments to another wealth manager, so ongoing charges should be of primary concern.
Ironically, the best time to consider changing wealth managers may be during market depressions. Transferred funds will bear lower initial charges and less is paid for portfolio maintenance fees during recovery. Towry clients will no doubt wish to consider their options in light of the recent hike in charges and now is the optimal time to consider change. When confidence returns to the market, the smart money will be held by people who planned ahead. If you would like more information about our ‘Valueplus’ service or wealth management proposition, please visit or website.