Bancroft Wealth, an IFA and wealth manager, has launched a £500 flat-fee advice service it claims will challenge traditional wealth managers charging a percentage fee.

It says investors will pay the same ‘fair fee’, regardless of the size of their portfolio 

The company, an IFA with 27 years’ experience, says its low cost service will mean an investor will retain an additional £9,000 on an investment of £150,000 over five years. 

Bancroft Wealth, based in Gwent, South Wales, will offer advice online and by phone.

It says it is highlighting, “just how overpriced and damaging to clients’ wealth traditional percentage fees are.”

Bancroft says its £500 fee represents better value than traditional percentage-based fees for any customer with a portfolio of over £39,000.  

Clive Russell, founder of Bancroft Wealth, said: “The options available to clients are either old fashioned wealth management firms who charge high percentage fees for what is effectively a one hour face-to-face meeting once a year, or restricted robo ‘advice’ that isn’t tailored to an individual's unique needs. 

“The percentage-based fees charged by large, established wealth management firms come with guarantees of exponential growth, but only for the firms themselves. It’s been well-documented how these opaque fee structures fund the lavish lifestyles of a privileged few rather than providing attractive returns for clients. 

“This didn’t seem fair, so we set about finding the perfect, completely transparent fee, where we make money without our investors losing out. Quality and qualified advice isn’t free, but nor should it be priced at the expense of investors’ returns. 

“Bancroft offers a personalised, whole of market wealth management service with in-depth analysis and reviews. We’re committed to a flat, £500 per year fee for life. No matter the size of a client’s portfolio.” 

There is no initial fee payable for assessment or to sign up to invest via Bancroft Wealth and the £500 annual fee only becomes payable once a client has signed up and transferred their funds to be managed by Bancroft Wealth. The £500 is paid in monthly instalments either via standing order or, more typically, taken directly from the fund. Clients are not tied in, and there is no charge to leave, says the firm.

Five-year returns example, different investment amounts:

Source: Bancroft Wealth. Assuming 4.5% growth rate, platform management fees of between 0.805% (for £500,000 investment) and 0.93% (for £39,000 investment).