Are small firms suffering from the cost of low-net worth clients?

Data shows small firms are charging less than large firms

Nicola Brittain
clock • 3 min read

Research released by the Financial Conduct Authority (FCA) has demonstrated that small firms charge less for lower value clients than larger firms. But what are the reasons for this and should it be a cause for concern?

Data released by the FCA last week seemed to indicate that medium and large firms are charging significantly more for ongoing investment advice than small firms for all but the most wealthy clients. For clients with £10,000 or less to invest, large firms charge a percentage of 0.88% for ongoing advice compared with small firms that charge 0.6% and very small firms at 0.5%, the FCA found. Meanwhile, small firms charge a median of 0.5% for advice on sums up to £1m while the charges at large firms varied considerably more: 0.81% up to £50,000; 0.75% for £250,000 and £500,000; and 0.5% fo...

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