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Brewin Dolphin to make £3m reduction to managed portfolio fees

Calculating feesBrewin Dolphin, a UK wealth manager, is to restructure its managed portfolio service to make it more efficient and share the resulting cost savings with customers.

The firm said the changes would mean £3 million-a-year (€3.37 million) savings to financial adviser clients.

The new structure will consist of four manager-of-manager funds that will allocate a proportion of each fund across a number of third-party managers.

In future, for the transferring assets, the managed portfolio service will invest directly with chosen third-party managers via segregated mandates rather than via their retail funds. This will reduce the ongoing charges figure (OCF) of the underlying fund holdings.

As an example of the reduced OCF, the indicative underlying cost on a balanced portfolio will fall by about 17%, from 62 basis points (bps) to 52 bps afterwards.

Transaction costs should also decrease due to the lower portfolio turnover, the company said.

Brewin Dolphin will not take a fee from the new manager of manager funds but will continue to be remunerated for the service at the same level, currently 0.30%+VAT.

The changes will take effect as part of a phased transfer between February and May 2018.

The firm has appointed fund administration provider, Maitland, as the authorised corporate director and fund administrator for the funds, which will provide UK equity, UK equity income, North American equity, and global bond strategies. 

Robin Beer, managing director of investment solutions and distribution at Brewin Dolphin, said: “Brewin Dolphin’s MPS [managed portfolio service] has reached a scale where our advisers’ clients can benefit from the reduced fees associated with large mandates rather than pooled retail funds.”

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