Fees that clients pay have been coming under a lot of scrutiny lately, as they should. The financial services industry is notorious for being vague or complicating discussions about, or disclosures of, fees. Why? Well, obviously, it’s in order to earn a higher margin from clients. A 2017 study by the Financial Conduct Authority in the United Kingdom found many problems with the way in which fees were charged and disclosed and with the value for money investors were receiving from active fund managers.
Over the long-term fees really do matter. A 1% saving on a portfolio which generates a 6% gross return would increase the final value of your investment by approximately 10% over 10 years and by approximately 22% over 20 years. On a £10 million portfolio this would mean saving £1,502,084 over 10 years and £4,666,098 over 20 years. So next time you get invited to a swanky event by your financial advisor, think carefully about who is really paying for the tickets…
Our fee is simple to understand. We charge from 0.3% per annum (+VAT where applicable) on the assets we manage. Importantly we do not charge fees on cash balances which are not yet implemented.
The total costs of the underlying ETFs is about 0.20% to 0.30% per annum.
Where clients have opted to retain their current custodian and broker, the cost of execution and custody fees are not determined by Omba but we assist clients in assessing their current providers for competitive rates and credibility of their platform.
Where our clients choose the Omba/ Multrees platform we charge a competitive Platform Fee which includes all custody and dealing and we remove the conflict of charging separately for dealing where many competitors split custody fees from execution costs and thus the higher the turnover of a portfolio the higher the execution costs paid by the client and earned by the investment manager.