The structure
The economics follow from the structure. Because the client owns the assets and your firm owns the mandate, the layers that sat between your advice and your client’s money are either removed or come back to your firm.
Where the client fee goes
Administration
Typical platform0.29% to 0.38%
With us: ready made models0.22%
With us: branded models0.22%
Model Portfolios
Typical platform0.60% to 1.12%
With us: ready made models0.22% to 0.33%
With us: branded models0.22% to 0.33%
Not a percentage · not drawn
Portfolio management fee your firm can elect to receive
- Typical platform
- not available
- With us: ready made models
- nil
- With us: branded models
- set by your firm
Total client fee before advice fee
Typical platform0.89% to 1.5%
With us: ready made models0.44% to 0.55%
With us: branded models0.44% to 0.55% plus your model fee
The table behind the figures
| Typical platform | With us: ready made models | With us: branded models | |
|---|---|---|---|
| Administration | 0.29% to 0.38% | 0.22% | 0.22% |
| Model Portfolios | 0.60% to 1.12% | 0.22% to 0.33% | 0.22% to 0.33% |
| Portfolio management fee your firm can elect to receive | not available | nil | set by your firm |
| Total client fee before advice fee | 0.89% to 1.5% | 0.44% to 0.55% | 0.44% to 0.55% plus your model fee |
On a $1 million client, that is a difference of roughly $4,500 to $9,500 a year. Across $50 million of client money, it is between $225,000 and $475,000 a year.
None of that is automatically yours. It is the amount that stops going to third parties, and where it goes next is your decision: pass the saving to the client, keep it, or share it.
Two ways to run it
Ready-made model portfolios
You appoint from an approved panel. No model to construct, no portfolio management fee to your firm.
Branded model portfolios
Your firm is the Model Portfolio Manager. You own the mandate and can elect to receive the portfolio management fee.
Model the estimated impact of structural cash margins on total portfolio cost.