Our Fees
Matrix Capital, Chartered Financial Planners, like any professional practice, whether a firm of solicitors or accountants, must charge fees that strike a balance between delivering value to money to its clients and covering all its costs. It is also necessary for the firm to aim to make reasonable profits to build up reserves for investment in new capability and to fairly remunerate the shareholders who provided the capital and resource for the business.
Our overarching principles
Based upon direct feedback from our clients and professional connections, there are several important considerations that have influenced our policy on fees, which are summarised as follows:
Removing conflict of interest: The way in which we charge fees recognises our fiduciary obligations to you our clients, while removing any conflict of interest.
Providing fair value: It is important that any fees that you pay must represent value for money. We will only agree to engage a client for who we can add value, otherwise we are happy to signpost you to another firm.
No cross subsidy and treating clients fairly: Clients receiving the same level of service should pay the same fee, irrespective of the amount of funds they have under advice.
Avoiding fees based on percentages: Many advisers charge a fee based on a fixed percentage of your funds under advice. We consider that this approach fails to meet the factors noted above
Pro bono: We believe that providing professional advice to someone who has a need but simply cannot afford to pay for it, is a hallmark of professionalism. Ultimately, we want to help people and will not turn deserving cases away.
How do we calculate fees?
We calculate our fees based on the following factors:
The amount of money you are requiring us to invest on your behalf is not a factor.
What fees will you be expected to pay and when?
There is a detailed explanation of our fees included within our standard Client Agreement, including worked examples. However, we typically charge fees at three key points:
Financial planning:
The initial information gathering, analysis, reporting and generic advice is included in stages 1-3 of our Financial Empowerment Programme™.
1. Clarity Builder™ - to obtain detailed information on your existing arrangements, including savings, assets, income, expenditure, and pensions. Providing you with an accurate Portfolio Report, identifying any risks and agreeing on detailed objectives.
2. Gap Analysis™ - undertaking detailed calculations and analysis, which will include an accurate inheritance tax computation and cashflow forecast to determine how much capital you need to accumulate to fund your lifestyle during retirement and on into later life. We will also include an income tax computation to identify any planning opportunities that may assist in reducing your liability to tax and to inform any investment recommendations.
3. Strategy Platform™ Report – This is a full personal financial planning report, which we will deliver in person, setting out generic advice and a professional opinion on the options available to you in achieving your objectives. We will take your instructions after this meeting on the specific recommendations to implement as a suitable package of advice. This will include advice on cash savings, ISAs, trusts, pensions, and investments (as appropriate).
So, when you first engage our services, you will be asked to pay a fixed fee of £2,850 to cover the costs of this important phase of financial planning. To meet our cashflow requirements, we ask new clients to make a payment on account of £1,000 from outset, with a balancing payment of £1,850 when we have completed these first three stages.
Financial advice:
This naturally leads into the implementation of your financial plan, which is typically where we are being asked to provide specific regulated advice, which may include advice and implementation work on pensions, investments or protection policies. This is covered in stages 4-5 of our process.
4. Impact Report™ - This report sets out our specific advice for you to consider and sign off on before implementation.
5. Implementation Planner™ - Once formally agreed upon, our recommendations will be implemented by our team. This will include setting up any pensions, trusts, ISAs and investments (as appropriate)
We will typically calculate a fixed fee for any professional work we are required to do at this stage, which is based upon the factors described above. Where we cannot accurately determine the scope of work, we are able to agree a fee cap and charge by the hour.
Sometimes, it is possible, to assess the likely implementation work at the point you first engage our services, but in some cases, it is not possible. We will however provide some indication as to the likely cost from outset.
Once we have determined what work is required, we will usually be able to provide you with a firm fee quotation for you to consider before proceeding.
Ongoing service:
Once the plan has been implemented, your overall financial plan and any pensions, trusts, investments and protection polices, we have provided advice on, need to be regularly reviewed and adjusted.
We will tailor the service to your requirements and then tailor the fee to the service.
Whilst we still offer the choice of a fixed retainer fee of a percentage of funds under advice, we encourage clients to choose the fixed fee option for the reasons stated above. This is stage 6 of our process.
6. Ongoing service and review – we provide a composite financial planning and investment review service.
A typical annual service fee is £2,500 to £5,000.
"The Financial Conduct Authority (FCA) says advisers charge an average of 2.4% of the amount invested for initial advice and 0.8% a year for ongoing advice (1.9% p.a with underlying product and portfolio charges factored in)."
This would mean if a client had £1million to invest, based on these figures, the average initial advice charge of 2.4% would equate to £24k and 0.8% a year for ongoing advice ( or 1.9% p.a with underlying product and portfolio charges factored in) per year which would be between £8k - £19k.
How are fees paid?
For the initial phase of stages 1-3 described above, we will invoice you directly for £2,850 (£1,000 up front followed by £1,850).
For stages 4-5, the one-off fees for implementation can be paid in one of two ways, which are:
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We will handle all investments or pensions without deducting any fees from the invested or transferred amounts. Instead, we will invoice you or your business directly upon completion of the implementation work, and you will be asked to pay us at that time.
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We will manage your investments or pensions, deducting our one-off implementation fees from the invested or transferred amount. This process, known as ‘adviser charging,’ is handled by the chosen product provider(s), so you won’t need to pay a fee from your (or your business’s) bank account.
Adviser charging is a fee structure where financial advisers charge clients directly for their services, rather than receiving commissions from product providers. Here are some key points:
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Fee Deduction: The fees are often deducted from the investment or pension amount, rather than being paid out-of-pocket by the client.
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Transparency: Advisers must clearly disclose their fees upfront, including how much they will charge and how the payment will be made.
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Types of Charges: Fees can be structured in various ways, such as a percentage of the assets managed, a fixed fee, or an hourly rate.
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Regulation: The Financial Conduct Authority (FCA) regulates adviser charging to ensure transparency and fairness. Advisers must provide clients with a clear charging structure and disclose all charges in writing before any advice is given.
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No Commissions: This system was introduced to replace commission-based payments, ensuring that clients pay for the advice they receive rather than the products being recommended.
A word about VAT
Where the work that we are being asked to undertake is intended to lead to ‘intermediation,’ then, based on our understanding of the VAT rules, the work is deemed to be VAT exempt, which typically means that we can legitimately charge fees without applying VAT.
Intermediation, in this context, means where we are engaged to act between you and a product provider to arrange a transaction, which may include setting up investments, pensions or protection policies.
You will appreciate that should we be required by law to charge VAT for any element of our work, we will need to apply VAT to the amount we charge you. However, we will inform you of any changes that impact upon the need for us to charge VAT.
What our clients think
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