The Cost of Investment Management – and access to it

Our latest newsletter will be posted soon. If you are not on the hard database, please pop us your address. It covers many areas but most importantly the embarrassingly good recovery and gains in clients’ investments since market lows in March 2020. However, it also looks at those believing that the ‘cost’ of their advice, or their investment management are the primary important things in any relationship regarding the subscription and management of their capital. It uses the expression ‘cutting-off-noses-to-spite-faces’ because when last year’s results are reviewed and what we were able to do for clients – and did, versus what people without that actually could do or did do (most could not), we have made additional returns for our clients which will cover generations’ worth of our whole fees – and more besides.

Our best interests are our clients’ best interests. If, at the end of the day, the client has a bigger and safer pot than they’d have otherwise, then those are our objectives. The client will appreciate that and will stay with us and then, a few pennies of fees, a few pounds, every year for many years are worth a considerable sum to our business model even if we subsidise many attributes of the service and the guidance we provide. Don’t get me wrong – we can do very nicely thank you very much, for looking after our clients’ best interests. Being cynical, if we increase clients’ funds then the management fees increase too – what nicer an incentive for us to share!

The bigger we grow then the better the terms we can negotiate too and we look to pass-on whatever savings we can achieve. It also means we can secure preferential terms for dealing and things like that and which individual investors cannot have otherwise.

We also work darned hard, even when it comes to doing transactions. None of that is reflected in the ‘cost savings’ clients enjoy compared with other advisers and managers. We communicate with clients too and when withdrawals are required, we discuss and do our utmost to manage access to funds on best terms for them, such as selling their holdings to new clients at prices no-one else on the market can secure, benefiting buyer and seller alike. Even when we undertake bigger transactions, we don’t just rush into the market with a big instruction and expect a sensible price – sometimes therefore we have to nibble away over a lengthy period to stop pushing prices against us. It’s all part of our job as we believe it to be – others don’t do that but what is that worth to our client, in percentages and pounds, shillings and pence terms in a year?