Member Article

Raymond James on the need for more transparency

Financial services business Raymond James has reported seeing a 150% spike in enquiries over the past six months from North West based high net worth individuals who have received bad advice from advisers that has resulted in large losses or in some circumstances complete losses of capital. Typically, losses for private clients have varied between £50,000 and £750,000.

Mark Parello - branch principal - said: “The overwhelming majority of clients who are coming to us are business owners, those who have sold businesses and their families, trustees and high earning professionals. Many tend to have large sums of money invested, but are unsure of what they are paying for. Most assume the typical headline management fee of 1% + VAT is all they pay, however the truth is they are normally paying far more than this as there are numerous layers of fees, which we don’t believe are clearly disclosed in most cases. These can include annual management charges, a platform fee, fees for the underlying funds and if there is an IFA or financial planner involved. This can all add up and be closer to 3%, if not more.

Mark added: These fees have a huge impact on the performance of an individual’s portfolio, where a large proportion of the portfolio returns end up disappearing. The majority of our clients will be investing for the next 20 to 30 years and - quite rightly - want to preserve their wealth. This can be achieved if clients opt for an integrated financial planning and investment management service but many are in the dark to the reality and that needs to change as a saving can be made of between 0.5% - 2% per annum.

Mark concluded: This makes a huge difference over time but it’s an issue that can only be addressed if people know the facts. The most transparent way is for firms like ours to reinvest these saved fees back into their clients’ portfolios, the compound effect of which leads to greater returns over time.“

In response to this - and following complaints of general poor management of their investments and a lack of transparency on the fees they are being charged - the firm has launched a free Wealth Check service. The service includes an analysis of any financial planning and investment advice received including fees clients are actually paying along with detailed reporting of asset allocation and implied risk, general performance and a summary of guarantees or guaranteed benefits.

The Raymond James office based on King Street is headed up by founding members Mark Parello and Matthew Singleton. It offers a fully integrated financial planning and discretionary investment management service. It works across various sectors and acts on behalf of businesses & business owners, private individuals & their families, pension funds, charities, partners in professional practice as well as for clients in the sports, media and entertainment industries.

Raymond James was founded in 1962 in the US and has been operating in the UK since 2001. It is the second fastest growing financial services business in the country and the group has £350bn in assets under management and a market cap of £5.9bn.

This was posted in Bdaily's Members' News section by Raymond James King Street .