What We Do and What It Costs.

We believe in being completely transparent regarding the cost of being a client of Bloomsbury. For many years (well before it became a regulatory requirement at the beginning of 2019) we have provided our clients with full details of the costs involved. These encompass not just our own fees but also the costs for custody and the underlying charges, including an estimate of the turnover costs, of the funds we use in our investment portfolios.

Transparency

Our fees cover a wide range of services, all of which centre around your financial plan. Financial planners don’t just advise you on your investments:

Financial planners

While we will happily provide financial planning services without managing investment assets, we will not manage your investment assets unless we have created a financial plan for you.  Financial planning provides the context for all the investment decisions you make.

The planning process starts with a discussion about your money values.  If you’ve never gone through this process before, you might find this video helpful:

Money values

Without knowing your money values and the financial goals you wish to achieve, it is difficult to create a financial plan.  It’s like trying to land on an aircraft carrier that is constantly changing course with no navigation aids to help you find it.  The plan provides that navigation system to help you arrive safely even if the destination sometimes changes.

Our new client process

We always start with a phone call to find out a little bit more about what you are looking for. Assuming that we both feel that we may be able to help you, this is followed by an initial meeting.  This first meeting is primarily designed to be all about YOU.  During this meeting we will explore what is important to you about money, your values and principles, your hopes and aspirations.  We may ask you some challenging questions at this meeting, almost none of which will be about your wealth.

Path to True Wealth

If, after this meeting, we both agree that it is worth moving forward, we will collect some high-level data from you.  This will include some questions designed to ascertain how you feel about investment risk and the results will contribute to the discussion at the next meeting, our Path to True Wealth (PTW) meeting, at which we will also present you with an initial indication of how well your resources match your plans.  This is illustrated in the form of a long term cashflow, which shows the anticipated inflows and outflows in each year of your life.

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This will give you an idea, based on what you have told us and various forward-looking assumptions, whether or not you can currently afford the life you want to live.  The process is an interactive one, so during this meeting we can make changes to the assumptions (how long you might work, how much you expect to earn/spend, timing of downsizing of house, gifting to relatives etc.) to see the effect on your cashflow.

At the end of this meeting you should leave with a clearer idea of what your financial future might look like and what steps you could take to improve your financial position to increase the chances of you achieving your goals.  Such steps might include, for example, tax savings, where you hold your assets, reducing your investment costs etc..

The initial call and the first two meetings are carried out at our expense.  At the PTW meeting we will provide you with an engagement letter which will set out the fees that we would charge should we all agree that we should work together.  However, if by this point we have identified that we cannot add sufficient value for the cost of our fees, we will do our best to help you find another financial planner who might be more suitable for you.

 

By this point we will have dug deep into your motivations and passions.  We can then use our understanding and collective expertise to support the decisions that will take you to where you want to be by removing the stresses and strains of looking after your wealth.  This allows you to do what you do best… love the life you have created and live it to the full.

Our fees

Once you sign our engagement letter and become a client of Bloomsbury, an initial fee is payable to cover the cost of preparing and implementing your financial plan.  This process can take up to six months as it is important to ensure that all aspects are addressed so that the plan has a solid foundation.  The fee is detailed in the engagement letter and is calculated based on the amount of work involved but is generally in the region of £3,000.

 

The fees on the underlying investments will vary according to the make up of the model portfolio we recommend and are therefore outlined in our engagement letter and provided via a ‘Costs & charges’ statement when we make our formal recommendations to you.

 

Our ongoing fees are as follows:

1. Wealth Planning Service

We offer two fee options under our Wealth Planning Service.  The choice of fee structure is entirely up to you.

Basis A is an asset-based fee, calculated with reference to the value of the portfolio we will manage on your behalf.  This is an ‘all-in’ fee which includes comprehensive financial planning, our discretionary portfolio management service, all dealing charges, quarterly valuation reports and annual tax packages.

Basis B splits out the costs of the financial planning and investment management services into:

– A fixed annual fee (paid monthly, quarterly, half-yearly or annually in advance) for the comprehensive financial planning service.  The level of the fee is based on a number of factors including the complexity of your current situation.  It is reviewed annually. 

– A flat 0.4% is charged for the discretionary portfolio management service (if applicable). Again, this fee includes all dealing charges, quarterly valuation reports and annual tax packages.

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2. Financial Planning Service

This is our more basic service for those clients who have not yet accumulated significant wealth and/or whose situation is relatively straightforward and who therefore do not require the high level of service and interaction of our Wealth Planning Service.  Face to face review meetings are every two years, with an annual review by phone/video conference in alternate years.  Our discretionary portfolio management service is not available under this service and instead we employ a range of low cost diversified funds whose approach is consistent with our investment philosophy.

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Our value

As mentioned above, we will only take on clients for whom we feel we can add value in excess of the fees they are paying us.  This might take the form of aspects which are obviously quantifiable – for example tax savings, reducing existing portfolio costs or eliminating unnecessary insurances – but will also include services on which it is harder to put a firm monetary value.

These would include:

  • Regular rebalancing of your portfolio to control risk exposure;
  • Ensuring that you are invested in line with your need to take risk to meet the cost of your goals, your emotional tolerance to and your capacity for risk, thereby reducing the chance that you will engage in wealth-destroying behaviour in the event of a market downturn;
  • Acting as a sounding board and critical friend when you wish to discuss something with an impartial third party;
  • Advising on the most appropriate ways to hold your assets;
  • Co-ordinating the services provided by other professional advisers (e.g. lawyers and accountants) in line with your financial plan;
  • Providing you with the peace of mind that you are working towards your goals by following an agreed and reviewed strategy.

Investing in being the best

As a relatively small firm, we allocate significant resources each year to ensuring that we are demonstrating global best practices in terms of our service offering. This includes being members of a study group of leading UK wealth management firms and also part of the Global Association of Independent Advisers (GAIA). The work we do with GAIA is explained in this video.

As part of our GAIA membership, we hold CEFEX accreditation (see below), which entails an annual audit. There are currently fewer than six CEFEX accredited firms in the UK. 

GAIA member firms act in a fiduciary capacity when working with clients, which enables us to refer clients to planners in other jurisdictions where necessary in the knowledge that they meet the same high standards.

What do the experts say?

There have been various studies on the value added by working with a good financial planning firm.

Morningstar estimated adviser ‘gamma’ to be worth in the region of 2%:

 

“We found that through prudent advice, advisors have the ability to add value that can be equivalent to a boost in investment returns of approximately 2% for an average investor. However, that figure will vary significantly by client and advisor.”

 

Vanguard estimated it to be worth up to 3% a year:

 

“We have also sought to place a value on the alpha that you can add and found that it’s likely to be in the region of 3% per annum, albeit not delivered at a constant annual rate.”

 

Trust

We ask our clients to take part in a global ‘Investor Feedback’ survey carried out by Dimensional Fund Advisors every two years.  In total, over 20,000 clients from across the world participate.  Our own clients consistently tell us in those surveys that the primary value they receive from their relationship with us isn’t defined by investment returns (which accounted for only 4% in the survey).  Over 80% of our clients (more than 50% of whom have been clients for in excess of 10 years) tell us that the primary value they receive from us is the sense of security and peace of mind they feel, along with the knowledge that we understand their personal financial situation and deal with people like them.

Trust in the people you choose to advise you on your financial future is crucial and the value of being able to trust someone is hard to put a figure on in pounds and pence:

Understanding the value of working with a good financial planning firm is often only achieved through experiencing it, or by talking to the existing clients of a firm. We are always happy to put you in touch with an existing client if you have been through our Path to True Wealth process

Additional resources which you may find helpful:

And finally. Should you have any queries about our services or charges please feel free to contact us for more information.

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