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Netwealth launches portfolio cost tool

6 October 2017

Digital wealth manager Netwealth has launched a new online tool to help investors find out how much their wealth manager is charging them, amid a push on transparency.

The Portfolio Cost Calculator aims to help investors understand the different charges involved in having their wealth managed and the questions they should ask their money manager.

Charlotte Ransom, CEO of Netwealth, said: “In its recent report on the asset management industry, the Financial Conduct Authority noted that investors’ awareness and focus on charges is mixed and often poor. Transparency regarding the impact of fees on future investment returns is also highlighted as a priority in the MiFID II proposed regulations. Netwealth’s Portfolio Cost Calculator is designed to help address these important problems.”

Ransom said many traditional wealth managers quote a single management fee, without including other charges such as VAT, trading costs and the underlying fund fees, which makes it difficult for clients to understand what the return is and what they will ultimately receive.

Matt Conradi, senior client adviser at Netwealth, said: “Many clients of traditional wealth managers are sometimes either too trusting or too afraid to ask the important questions about how much they are paying for advice and to have their wealth managed. The headline fee they are quoted can often significantly underplay the overall costs.

“Portfolio Cost Calculator helps highlight all the items for which you might be charged. We encourage clients to ask their current provider to detail what their services cost in total each year.”

The Portfolio Cost Calculator asks five important questions to estimate the overall fee: the value of the current portfolio; whether the portfolio is professionally managed or self invested; whether advice is received from the portfolio manager or an IFA; whether the investor receives ongoing advice and financial planning and whether the portfolio is mainly invested in active or passive funds.

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